A campaign to educate credit card issuers & users

Users are not the only ones who should be responsible about credit cards - issuers must be too

A QUESTION OF BUSINESS By P. GUNASEGARAM
p.guna@thestar.com.my

  IT is interesting to note that the National Cards Group – a grouping of Malaysian credit card issuers, mainly banks – has launched a campaign to inculcate responsible credit card usage among consumers.

They have called the campaign Swipe Smart with 6E, 6E being the so-called six enablers – educate yourself, exercise caution, enhance your lifestyle, enjoy the benefits, eliminate debt and engage with your card issuer.

Well and good. One should not pour cold water on such a noble deed by the card issuers to ensure that their customers are educated and know how to use the card responsibly without getting themselves – and in the longer run the issuers – into trouble.

It was good to see too that there were representatives from Bank Negara, the Federation of Malaysian Consumer Associations (Fomca), the Association of Banks and others there.

The only thing that was lacking was a similar campaign for card issuers, yes, you read right, the card issuers. You see, the credit card problem is a double-edged sword – both the behaviour of issuers and users contributes to delinquency. Eventually, if things really get bad, both sides will suffer – the users may become bankrupt and the banks may be saddled by high bad debts.

Both parties have to be responsible and there has to be a balance of profit with responsibility. There is a need to educate the card issuers too to, using the words of the National Cards Group but applied to itself this time, to inculcate responsible credit card issuance among card issuers.

We will even call the campaign by the same name – Swipe Smart with 6E – with its own six enablers. We hope, Fomca, who was present there, will take the cudgels up on behalf of the consumers, call the issuers and launch this campaign.

Here is our proposed 6E campaign directed at card issuers:

1. Eliminate profiteering such as late payment charges. We have written about this before. The effective interest rates on this are extortionate and exorbitant. If you are late by one day on an outstanding balance of RM100 (even if your credit limit is RM100,000!) the charge is RM50. That’s 50% a day or 18,250% a year! Now what entitles the bank or issuer to charge you such an interest rate when your credit limit is RM100,000 and you have an unutilised portion of this of RM99,900? If that is not profiteering, what is?

2. Ease up on your interest rates. Most of us pay 18% a year on balances outstanding when the fixed deposit rate is not even nudging 3%. They take your money at 3% or less, then lend it back to you for 18%! Housing loans are at 6%, why is the credit card interest rate three times that at 18%, a rate that only licensed money lenders charge?

3. Exercise restraint in your marketing. These days, have one credit card and other issuers deluge you with cards and offers. Sometimes they send a card to you that you don’t want and then three months later bill you for service charges! Then I have to call them – it takes ages to get through with a robot asking you whether you want to do this or that before you finally get through – and demand they withdraw their statement. And then they offer credit cards to all manner of people who don’t know how to use them or abuse the credit lines, so long as they have a regular salary – civil servants are great targets. And because they have a salary, the banks can get their money back – with huge penalties to boot.

4. Engage with your customer. Before they send us all that unwanted promotional material, the issuers should ask us if we want them. They should remind us – constantly – that outstanding balances cost us 18% a year, the highest rate of any bank facility, and if I am not mistaken, the highest possible legal lending rate.

5. Educate yourself on social and ethical responsibilities. Yes, we know profits are all important and yes we know there are a lot of ignorant people out there from whom money can be made. But don’t financial institutions have a social and financial responsibility to their customers, especially people, and to inform them fully of how they make money from them? If issuers want to educate the public on the dangers of credit cards, they should educate themselves on immoral behaviour and how the drive to profit stops them from truly educating the general public.

6. Explain all your charges and actions fully. I have not yet found an issuer who advertises that the penalty charge for late payment is as high as nearly 20,000% a year. Perhaps they should print this on the envelopes they mail to customers. And how many people know that many credit cards issuers impose a service charge on overseas spending, have unfavourable exchange rates for transactions, and have service fees for interest-free instalment payments? Can they tell us why they are not pushing debit cards (no interest here, the funds are transferred directly from your bank account) equally hard? The list goes on. It is time, if the issuers wanted to educate the public, for them to take huge full-page advertisements to fully disclose all their charges in the simplest possible language. If they can’t find anybody to write the copy for them in simple language, I volunteer to do it for free.

Well, that’s our 6E Campaign aimed at educating our banks and other card issuers in brief. We hope somewhere out there some consumer organisation will take up this case and that the authorities will sit up and take notice and realise that issuers too contribute to the credit card problem.

■ Managing editor P Gunasegaram notes with some trepidation the following figures for credit card usage in Malaysia: there are 9 million cards and the average transaction through cards is RM211mil a day or RM77bil a year. That’s a lot of potential for some to make a lot of money and a lot of others to lose some.

Other related stories:
Importance of keeping a good credit record
Having a reasonable amount of debt is generally okay

Saturday November 6, 2010

Comments by A wary reader

Of educating credit card issuers and users

P. Gunasegaram’s article entitled “A campaign to educate credit card issuers” is interesting.

But another important interest charge also needs to be highlighted. Do you know that if you do not make full payment on or before the due date, you lose the 20 days credit free period for both the current and new transactions posted on the statement?

In addition to the RM50 late payment charge, the finance charge is even higher.

For example: You receive the September statement on Oct 5 and the outstanding charge is RM1,200 and you need to settle it by Oct 20.

Say for some reason or the other, you overlook the matter and do not settle the outstanding in full by Oct 20. How much is your finance charge?

Let’s assume you settle the full outstanding of RM1,200 on Nov 5. You’d expect the bank to charge a finance charge of 17.5% pa based on daily calculation from Oct 20 to Nov 5, right?

Wrong. The bank will compute the interest outstanding from the transactions posted date till Nov 5.

In addition, all the new transactions will also attract interest charge. In short, the bank is penalising you twice on the old and new transactions.

If you do not settle the outstanding in full before due date, you lose the 20 days interest free period.

As such, the campaign should also educate the public to settle the full outstanding amount by due date. Banks, of course, will not highlight this point to the public. It’s one of their main revenue streams.

Rejuvenating George Town, Penang

Three sound recommendations for Penang to break out of the middle income trap

 THINK ASIAN By ANDREW SHENG

EVERY time I open my window, I see paradise – not heaven, but a neon sign for Paradise hotel in Penang island or more precisely, George Town, Pulau Pinang.

Situated at the entrance to the Malacca Straits, directly opposite Kedah Peak, the city was founded by Sir Francis Light in 1786 as the first English bridgehead to East Asia.

Since then, George Town has been a melting pot for Armenians, Arabs, Malays, Indians, Chinese and European travellers passing through the Far East.

At its height at the end of the 19th century, the city boasted the earliest bank branches in the country with key trading ties to Sumatra, Burma, Southern Thailand and Northern Malaya.

Like people and countries, cities have their ups and downs. When I first set eyes on Penang, my first impression was green rice-fields from the airport to a tree-lined city with a lovely, relaxed colonial feel.

George Town boasted the oldest and arguably best schools in the Far East. After duty-free status was removed and Sumatra and Southern Thailand went through a period of relative decline, the Penang economy had to reinvent itself, initially with the electronics industry.

But by the turn of the 21st century, even the electronics industry felt under threat as Penang talent left for richer shores.

What should Penang do?

A recent joint study by the World Bank and Khazanah Nasional Bhd brings forth a timely and well-researched book, “Cities, People and the Economy – a study on Positioning Penang” to discuss how Penang can escape the middle income trap.

Drawing on empirical studies by a team of internationally-renowned researchers, the book examines how the State of Penang needs to re-invent itself.

Having been successful in becoming industrialised through cheap labour, subsidised infrastructure and available land for low-tech manufacturing, Penang must now focus on developing industries which bring new competitiveness against the growing giants of India and China and other middle-income countries that are eating into Penang’s traditional strengths.

The editors of the book comprise three eminent economists who are clearly concerned about the need for Penang to reinvent itself.

Homi Kharas was formerly the chief economist for East Asia for the World Bank and currently at the Brookings Institution and a member of the National Economic Advisory Council.

Dr Albert Zeufack is a Cameroon national, formerly with the World Bank and currently working for Khazanah. Hamdan Majeed is the energetic head of the Penang office of Khazanah and deeply committed to Penang’s revival.

The central thesis of the book is that the three elements of Penang’s growth – its cities, people and economy – are not developing in tandem and that their cycles of development must be synchronised to turn Penang around.

Fortunately, following George Town’s world heritage designation, the urban cycle is starting to enter a recovery phase. But the challenge is that the people cycle is still in a deficit phase, with new graduates choosing to leave the area, while the economy is caught in a slump.

The authors carefully argue that a new development strategy must be articulated that can guide Penang to better wages, jobs and prospects for the next generation.

Penang must move from the old “sweatshop” assembly model to become a “smartshop” for sustainable products. Restoring lustre to the “Pearl of the Orient” does not have a simple engineering fix.

Instead, Penang must do different things and do them differently. Given its strong track record of economic success, Penang must set a new multidimensional agenda to become the most vibrant economic hub for its economic geographic advantages – the northern Peninsular Malaysia, Sumatra, Southern Thailand and through good air and telecommunications, South, North and Southeast Asia.

Given its strong base of human talent, with affinity for community harmony and creativity, particularly in the culinary and service area, Penang offers the best opportunity to break out through innovation and change.

The book offers three sound recommendations to break out of the middle income trap. The first is to exploit economies of scale through specialisation, focusing on a few products where it is possible to achieve global excellence.

The six focus areas identified are technology-based manufacturing, biotechnology/life sciences, business process outsourcing (BPO), logistics, tourism and agribusiness.

Secondly, Penang must build density on the basis of an integrated land use plan while also ensuring efficient connectivity with the capital city.

Thirdly, Penang needs to increase its “liveability” factor, which is the key factor determining competition for top global talent.

Underlying the strategic concept is the premise on what the Government can do to facilitate sustained development in a middle income region.

Penang’s experience will provide valuable lessons for other states in Malaysia. What makes this book valuable is that it offers a development strategy that can be applied not just for Penang but also Malaysia as a whole.

It recognises that a city (and a nation) has to understand its place in the global economy and in regional supply chains.

Penang, and by extension Malaysia, can become an advanced economy by 2020 if it becomes globally connected, regionally oriented and locally centred.

But it can only do so if all parts of the nation, city and rural areas work together through efficient connectivity. What comes through the book is that Penang’s development is not a stand-alone objective.

Put simply, Malaysia’s targets of the New Economic Model cannot be achieved without successful development in Penang. Greater density of economic activity in the Northern Corridor will benefit all states and accelerate the reduction of poverty in Malaysia.

Thus, if the Northern Corridor can escape the middle income trap, then, so can Malaysia. This is a timely and relevant book as it comes out at the same time as the 10th Malaysia Plan.

The book will be useful for policy makers and those interested in the rejuvenation of cities as engines of economic development. It will also help interested citizens to understand how cities can change. George Town has always been a jewel in the Orient, which is why I live here.

■ Tan Sri Andrew Sheng is adjunct professor at Universiti Malaya, Kuala Lumpur, and Tsinghua University, Beijing. He has served in key positions at Bank Negara, the Hong Kong Monetary Authority and the Hong Kong Securities and Futures Commission, and is currently a member of Malaysia’s National Economic Advisory Council. He is the author of the book “From Asian to Global Financial Crisis”.

Rare earths

China vows not to use rare earths as leverage

A stalk of wild grass grows off soil from an old site of a rare earth metals mine on the outskirts of Longnan county, in Jiangxi Province October 27, 2010.

Credit: Reuters/Jason Lee

A stalk of wild grass grows off soil from an old site of a rare earth metals mine on the outskirts of Longnan county, in Jiangxi Province October 27, 2010.

By Aileen Wang and Lucy Hornby

BEIJING (Reuters) - China said on Thursday it will not use its dominance of supplies of rare earths as a bargaining tool with foreign economies, and the United States said it hoped trade in the high-tech ores would continue as normal.

China has slashed export quotas and reduced shipments to Japan, igniting international concern that it could use rare earth exports as an economic or political lever. Prices have spiked and mining firms are rushing to develop sources of the minerals outside China.

The U.S. and European Union this week said they were pressing for solutions to fears that China was choking supply of the substances used in lasers, computers and superconductors, among other applications, and the issue is expected to figure at next month's G-20 summit.

Chinese Ministry of Industry and Information Technology spokesman Zhu Hongren said Beijing sought international cooperation.

"China will not use rare earths as an instrument for bargaining," he told a news conference on Thursday. "Instead, we hope to cooperate with other countries in the use of rare earths on the basis of win-win outcomes and jointly protecting this unrenewable resource."

The ministry is one of several in China that oversee rare earths.

Zhu was speaking on the same day a newspaper published by China's Ministry of Commerce urged China to resist pressure to allow foreign firms more access to its rare earths.

U.S. Secretary of State Hillary Clinton said she was unaware of China's vow not to use them as a bargaining chip, and, speaking in Hawaii, said she would welcome any clarification of China's stance on the minerals.

"I ... hope that it means trade and commerce around these important materials will continue unabated and without any interference," Clinton told a news conference with Japan's foreign minister.

"At the same time, because of the importance of these rare earth minerals, I think both the minister and I are aware that our countries and others will have to look for additional sources of supply," she said.

One engineering firm, Japan's Nidec, has already said it will start making motors that do not use rare earths to lessen reliance on the minerals.

China supplies about 97 percent of the world's demand for rare earth metals, which possess magnetic, luminescent and other properties used in emerging clean energy technologies, computers and electronics.
Prices of some rare earths on world markets have increased tenfold this year, reversing a long-trend toward lower prices caused largely by greater Chinese production over the past two decades.

In response to higher prices and worries among major consumers such as Japanese hi-tech industries that they will be unable to rely on large scale deliveries from China, mining firms are scrambling to speed up mine development timetables.

Shares in potential producers of the minerals outside China, such as Molycorp and Lynas Corp have rocketed since July, when China said it was reducing exports by 72 percent in the second half of the year.

Australian firm Arafura Resources on Thursday raised A$90 million ($87.5 million) to develop a rare earths project, but some analysts have said the long-term investment case for the minerals may be weak, and the market has the makings of a bubble.

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Energy

Can the U.S. Rare-Earth Industry Rebound?

• Friday, October 29, 2010
• By Katherine Bourzac

The U.S. has plenty of the metals that are critical to many green-energy technologies, but engineering and R&D expertise have moved overseas.

Rare-earth elements were obscure until the past year, when China, their primary producer, tightened export quotas on the materials. Rare-earth elements are used in a multitude of technologies, including magnets for wind turbines, hybrid-car batteries, fluorescent lightbulbs, and hard drives.

China is not the only country with significant reserves of these valuable materials; in fact, the U.S. was their primary producer until the 1990s, when the Chinese began undercutting the Americans on cost. Now companies in the U.S. and Australia are ramping up production at two rich sites for rare earths, but the process will take years. Getting from rocks to the pure metals and alloys required for manufacturing requires several steps that U.S. companies no longer have the infrastructure or the intellectual property to perform.

Contrary to their name, rare-earth metals are abundant in the Earth's crust, and significant reserves are concentrated in the United States, Australia, Brazil, and other countries. According to the U.S. Geological Survey, there are 13 million tons of extractable rare earths in the United States, 5.4 million in Australia, and 19 million in Russia and neighboring countries. In 2009, China had 36 million.

In the 1970s and 1980s, the Mountain Pass mine in California produced over 70 percent of the world's supply. Yet in 2009, none were produced in the United States, and it will be difficult, costly, and time-consuming to ramp up again. "When you stop mining in this country, as investment goes down, expertise on cutting-edge technologies is exported as well," says Carol Raulston, spokeswoman for the National Mining Association. Rare-earth researcher Karl Geschneidner of the Ames National Laboratory in Iowa also sees a lack of what he calls "intellectual infrastructure" for rare-earth technology development in the United States.

The two mines that will be stepping up production soonest are Mountain Pass, being developed by Molycorp, and the Mount Weld mine, which is being developed by Lynas, outside Perth, Australia. Mountain Pass has the edge of already having been established. But the company cannot use the processes used in the mine's heyday: they're both economically and environmentally unsustainable.

Several factors make purification of rare earths complicated. First, the 17 elements all tend to occur together in the same mineral deposits, and because they have similar properties, it's difficult to separate them from one another. They also tend to occur in deposits with radioactive elements, particularly thorium and uranium. Those elements can become a threat if the "tailings," the slushy waste product of the first step in separating rare earths from the rocks they're found in, are not dealt with properly.

Mountain Pass went into decline in the 1990s when Chinese producers began to undercut the mine on price at the same time as it had safety issues with tailings. When the Mountain Pass mine was operating at full capacity, it produced 850 gallons of waste saltwater containing these radioactive elements every hour, every day of the year. The tailings were trucked to evaporation ponds. In 1998, Mountain Pass, which was then owned by a subsidiary of oil company Unocal, had a problem with tailing leaks; four years later, the company's permit for storing the tailings ran out and Unocal did not pursue its renewal.

Meanwhile, throughout the 1990s, Chinese mines exploited their foothold in the rare-earth market. The Chinese began unearthing the elements as a byproduct of an iron-ore mine called Bayan Obo in the northern part of the country; getting both products from the same site helped keep prices low initially. And the country invested in R&D around rare-earth element processing, eventually opening several smaller mines, and then encouraging manufacturers that use these metals to set up facilities in the country.

Meanwhile, worldwide demand for rare-earth elements has been growing. This year demand was 125,000 tons; by 2015, it is expected to grow to 225,000 tons, and Molycorp spokesman Jim Sims notes that this projection does not include the wind-turbine industry, which is expected to be a major market. State-of-the-art wind turbines like those that will be installed at the world's largest wind farm, an 845-megawatt facility in Oregon, use high-efficiency rare-earth magnets. They can be 10 times lighter and smaller than comparable magnets but equally strong. Each of these magnets requires a ton of rare earths, Sims says.

Molycorp renewed the Mountain Pass mining permit and began R&D of its own in 2004. This year, using rock that was mined before a previous permit expired and new separation technologies it has developed, the company will sell 3,000 tons of rare earths. By 2012, Molycorp expects to produce 20,000 tons a year, and under its current mining permits could double capacity to 40,000 tons. Sims also says the company will sell rare-earth products at half the cost of the Chinese in 2012. According to the company, these savings will be made possible by several changes, such as eliminating the production of waste saltwater. Molycorp will use a closed-loop system, converting the waste back into the acids and bases required for separation and eliminating the need to buy such chemicals. The company will also install a natural-gas power cogeneration facility onsite to cut energy costs.

But Ames Lab's Geschneidner notes that one major source of cost in the separation process can't be eliminated--the fact that it simply takes a long time. Milled rock is shaken again and again in a mixture of solvents to separate the elements by weight; depending on the ultimate purity that's required, this must be done 10,000 to 100,000 times. The result is then sold as a concentrate or treated to produce rare-earth metal oxides.

Even if Molycorp does succeed in reducing the costs of separation by half, the next step in production may cause a hiccup. Rare-earth oxides and concentrates do have a market, for example as catalysts for the petroleum industry, but they can't be made into magnets. To make magnets, rare-earth oxides must first be converted into pure metals, a process that produces caustic byproducts, and is done solely in China today. Sims says that Molycorp is investigating pathways that are environmentally friendly and aren't covered under intellectual property owned by foreign companies. These metals must next be made into alloys suitable for the magnets, another capability that's concentrated overseas, mostly in Japan and Germany.

The company's goal is to control every step along the supply chain, through production of alloys and eventually the magnets, too. Here, too, the U.S. lacks infrastructure and intellectual property, so Molycorp hopes to license or buy patents on making alloys, and will make magnets through a joint venture with another company.

By going public in July, Molycorp raised $379 million of the $511 million the company believes is required to put in place its projects by 2012. A bill pending in the House and the Senate would offer loan guarantees for Molycorp and other investors in rare-earth mines. And the company has applied for loan guarantees through the U.S. Department of Energy, which will give a final decision next summer.

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Feng shui man’s hand chopped off

Source: The star.com.my

Vicious attack: Police personnel checking the victim's car for clues after the incident last night. The severed hand is still missing 

 

GEORGE TOWN: A feng shui master had his left hand chopped off in a savage attack outside a restaurant near Jalan Masjid Negeri.

Th’ng Keat Seong, 44, was believed to be walking to his Mercedes-Benz when he was attacked at Jalan Lintang Emas near Jalan Besi at about 8pm last night.

Blood stains were found on the boot of his car which indicated that his assailants could have held his hand there before chopping it off.

Th’ng’s cries attracted the attention of passers-by who rushed him to a private hospital. He managed to call his sister-in-law to seek help after the attack. The number of assailants is not known at press time.

It is learnt that the police are looking for the missing hand. Penang police chief Deputy Comm Datuk Wira Ayub Yaakob said they were investigating the motive for the attack.

It is learnt that police have not ruled out the possibility that someone could have tried to extort money from him.

I never saw it coming, says feng shui master who lost left hand

By ZALINAH NOORDIN
zalinah@thestar.com.my

GEORGE TOWN: Feng shui master Th’ng Keat Seong, whose left hand was chopped off in a vicious attack on Monday, says he really did not see it coming.

Th’ng admitted he did not get any premonition that something bad would happen. “I am a feng shui expert. I don’t predict the future as I’m not a fortune teller,” he said.

Th’ng, 44, offers consultancy services to his clients and has his own shop selling feng shui items in Penang Times Square shopping mall.

He claimed there was someone out there who did not want him in the business due to jealousy.

Th’ng said he was walking to his car after dinner at a restaurant when he was attacked at Jalan Lintang Emas, near Jalan Besi, at about 8pm on Monday night.

Blood stains found on the car boot indicated that his assailants could have held his hand there before chopping it off.

“It all happened so fast and I can’t really recollect what happened, or how the assailants looked like.

“All I can remember is that someone yanked my left arm from behind and I felt a searing pain. The next thing I knew, my left hand was missing and there was a lot of blood,” said Th’ng, who is right handed, when met at the the Gleneagles Medical Centre yesterday.

Feng shui man’s hand still missing

GEORGE TOWN: The left hand of a feng shui master which was chopped off by assailants here on Tuesday is still missing.

Chances are even if the missing hand is found, it would be too late for surgeons to reattach it.

A medical expert, who declined to be named, said under normal circumstances, a severed hand has to be reattached within six hours to have any chance of functioning again.

George Town OCPD Asst Comm Gan Kong Meng believed Th’ng Keat Seong’s assailants had made off with the hand after hacking it off.

“The victim could hardly recall anything as he was in great pain. More than one assailant were involved in the savage attack,” he said yesterday.

ACP Gan said they were investigating the case from all possible angles, including business rivalry as the motive.

“We are appealing to eyewitnesses to furnish us with details of the attack. Those with information can inform the nearest police station,” he said.

Th’ng, 44, offers consultancy services to his clients and has his own shop selling feng shui items at the Penang Times Square shopping mall.

Th’ng, who is reported to be in stable condition, refused to talk to the media yesterday.
He was attacked when he walked to his car after dinner at a restaurant in Jalan Lintang Emas, near Jalan Besi, on Tuesday.

Attackers sever geomancer's hand Click on thumbnail to view

A good fortune teller/fengshui master tell will never read his own life...that is the trick in their trade. Posted by: leechron at Sat Oct 23 10:20:15 SGT 2010 Don't think feng shui master can see his own fortune.....i'd figured he can only see others misfortunes and rectify them before it's too late...:) Posted by: girlgonewild at Sat Oct 23 09:58:44 SGT 2010 MYS style of doing business? Posted by: perceivedtobe at Sat Oct 23 06:52:28 SGT 2010

» View all (5) comments

China claims supercomputer crown, a threat?

China has claimed the top spot on the list of the world's supercomputers.

 

The Tianhe-1A supercomputer is about 50% faster than its closest rival.

 

The title has gone to China's Tianhe-1A supercomputer that is capable of carrying out more than 2.5 thousand trillion calculations a second.

To reach such high speeds the machine draws on more than 7,000 graphics processors and 14,000 Intel chips.

The claim to be the fastest machine on the planet has been ratified by the Top 500 Organisation which maintains a list of the most powerful machines.

High power
 
China's Tianhe-1A (Milky Way) has taken over the top spot from America's XT5 Jaguar at the Oak Ridge National Laboratory (ORNL) in Tennessee that can carry out only 1.75 petaflops per second. One petaflop is the equivalent of 1,000 trillion calculations per second.

The news about the machine broke just before the publication of the biennial Top 500 Supercomputer list which ranks the world's most powerful machines.

Prof Jack Dongarra from the University of Tennessee, one of the computer scientists who helps to compile the list, said China's claim was legitimate.

"This is all true," he told BBC News. "I was in China last week and talked with the designers, saw the system, and verified the results."

He added: "I would say it's 47% faster than the Oak Ridge National Laboratory's machine, 1.7 Pflops (ORNL system) to 2.5 Pflops (Chinese system)."

Tianhe-1A is unusual in that it unites thousands of Intel processors with thousands of graphics cards made by Nvidia.

The chips inside graphics cards are typically made up of small arithmetical units that can carry out simple sums very quickly. By contrast, Intel chips are typically used to carry out more complicated mathematical operations.

The machine houses its processors in more than 100 fridge-sized cabinets and together these weigh more than 155 tonnes.
Based in China's National Center for Supercomputing in the city of Tianjin, the computer has already started to do work for the local weather service and the National Offshore Oil Corporation.

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Is China a supercomputer threat?

Jack Dongarra, a professor at University of Tennessee's department of electrical engineering. China's supercomputer is a 'wake-up call.'

 

With China expected to officially take the supercomputer performance crown next month, I asked an expert about the state of supercomputing in the U.S. and whether China poses a long-term threat to the United States' current preeminence in supercomputing.

Nvidia announced yesterday that its chips are powering the "Tianhe-1A" Chinese supercomputer that achieved 2.507 petaflops, beating a U.S.-based system that is currently ranked No. 1 on the June Top500 list of the fastest supercomputers in the world. The Chinese system is a unique hybrid design that uses approximately 7,000 Nvidia graphics chips along with 14,000 Intel Xeon CPUs. The graphics chips are what give the system the extra oomph to catapult it into the top supercomputer spot.

I spoke with Jack Dongarra, university distinguished professor at University of Tennessee's Department of Electrical Engineering and Computer Science and part of a group from the University of Tennessee, Oak Ridge National Laboratories, and Georgia Tech that recently purchased a hybrid system. It is important to note that Oak Ridge houses the supercomputer, dubbed "Jaguar," cited above that is currently ranked No. 1 in the world based on the Top500 June list: it is not a hybrid system.

Q: Does Oak Ridge have anything analogous to the Chinese hybrid system?
Dongarra: Oak Ridge has a small version of a machine that is hybrid in nature. So, this is an acquisition that just took place...out of a grant from the National Science Foundation. It involved Oak Ridge National Labs, University of Tennessee, and Georgia Tech. But it's much, much smaller than the Chinese system. The machine is in place and testing is being carried out at Oak Ridge. A node has two Intel Westmere chips and three Nvidia Fermi boards. There are 120 nodes in the system.

What makes the Chinese supercomputer so fast?
Dongarra: The Chinese designed their own interconnect. It's not commodity. It's based on chips, based on a router, based on a switch that they produce.

Is that in essence the secret sauce?
Dongarra: It's similar to Cray. Cray's contribution, besides the integration and software, is the interconnect network. They have a very fast interconnect that makes that machine perform very well. Though [the Chinese] project is based on U.S. processors, it uses a Chinese interconnect. That's the interesting part. They've put something together that is roughly twice the bandwidth of an InfiniBand interconnect [which is used widely in the U.S.]

Will the Chinese system in fact take the No. 1 spot on the Top500 list in November?
Dongarra: Yes. I saw the machine. I saw the output. It's the real thing.

Why doesn't Oak Ridge do what the Chinese are doing?
Dongarra: Oak Ridge doesn't have the ability or technology to develop an interconnect or a router. We don't make computers. We buy computers and use them. It's not within our scope or mission to be in the computer design business.

What's your advice?
Dongarra: You have to remember that you have to not only invest in the hardware. It's like a race car. In order to run the race car, you need a driver. You need to effectively use the machine. And we need to invest in various levels within the supercomputer ecology. The ecology is made up of the hardware, the operating system, the compiler, the applications, the numerical libraries, and so on. And you have to maintain an investment across that whole software stack in order to effectively use the hardware. And that's an aspect that sometimes we forget about. It's underfunded. We fund the hardware but we don't fund the other components. The ecosystem tends to get out of balance because the hardware tends to run far ahead of what we can develop in terms of software. We have machines that have a tremendous level of parallelism. We currently have a very crude way of doing programming.

Who would do that?
Dongarra: The research is performed under the auspices of the Department of Energy, the National Science Foundation, and the Department of Defense.

Is this a red flag for the U.S.?
Dongarra: Yes, this is a wake-up call. We need to realize that other countries are capable of doing this. We're losing an advantage.

Brooke Crothers has been an editor at large at CNET News, an analyst at IDC Japan, and an editor at The Asian Wall Street Journal Weekly. He is a member of the CNET Blog Network and is not a current employee of CNET.

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Wall St reform architect Frank fights for survival

By Ros Krasny

BOSTON (Reuters) - Representative Barney Frank, the outspoken, witty Democrat closely tied to the 2008 U.S. bank bailout, faces a tough re-election battle after 15 terms in office at a time when incumbency itself is a liability.

Challenging the Massachusetts liberal is Republican Sean Bielat, an Iraq war veteran, and opinion polls suggest Frank has an uncomfortably narrow lead over a political unknown.

In the run-up to Tuesday's congressional elections, Frank has faced a torrent of negative ads and mailings, much of it from groups outside the state who support candidates from the conservative Tea Party movement.

Last week, Frank borrowed $200,000 from his personal savings to prop up his campaign, saying he needed "to defend against outside attacks."

A recent opinion poll showed Frank with 49 percent of likely voters, Bielat at 37 percent and 12 percent undecided. Frank kept his seat in the House of Representatives with 68 percent of the vote in 2008 and ran unopposed in 2006.

Massachusetts has already been the scene of one of the year's biggest upsets, when Republican Scott Brown won a special election for the U.S. Senate seat held for almost five decades by a Democratic Party pillar, the late Edward Kennedy.

"If Barney Frank loses, it would be as significant as Scott Brown's win. You would really begin to see the depths of this anti-government sentiment," said Marc Landy, professor of political science at Boston College.

WALL STREET TIES THAT BIND

American voters are in a surly mood over the weak economy, unemployment near 10 percent and the state of the housing market as banks face scrutiny over how they handled the paperwork in home foreclosures across the country.

Frank, 70, has been chairman of the powerful House Financial Services Committee for almost four years.
He helped to broker the $700 billion fund to bail out banks at the height of the financial crisis and he promoted legislation to slow foreclosures and keep afloat Fannie Mae and Freddie Mac, the federally controlled companies that own or guarantee more than half of the $11 trillion in U.S. mortgages.

He was a chief architect of the 2010 Dodd-Frank Act, the Obama administration's plan for tighter regulation of the financial industry.

Bielat's campaign has tagged Frank as a "key player in America's financial collapse" who "has promoted much of what caused the worst economic downturn in decades."

Landy said some see Frank as the "personification of the cozy relationship between the government and irresponsible finance."

Frank's congressional district stretches from the affluent Boston suburbs of Brookline and Newton southward to the working-class towns of Fall River and New Bedford.

 The New Bedford Standard-Times newspaper has backed Frank over Bielat, 35, a political novice, former U.S. Marine and project manager at a company that designs and builds robots.

"Recoil from Barney Frank's gruff manner if you will, but his intellect and effectiveness make him invaluable," it said.

Even if Frank is re-elected, some wonder whether he might retire if Republicans gain control of the House, as most polls suggest, and he loses his committee chair
.
"Being in the minority is not as much fun," said Alan Wolfe, director of the Boisi Center for Religion and American Public Life at Boston College.

But Frank has unfinished business -- reform of Fannie Mae and Freddie Mac and defense of the Dodd-Frank Act against a Republican assault.

Some veteran lawmakers who lose powerful committee chairs might be tempted to call it a day, especially given the rancor in Washington, but Frank is probably not among them, said Thomas Whalen, a political historian at Boston University.

"He'll never quit," said Whalen. "He'll be taken out of the Capitol on a slab."

(Reporting by Ros Krasny; Editing by Ellen Wulfhorst and John O'Callaghan)

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Survival-made-easyfor executives

By ANDREW LEE
andrewlee@thestar.com.my

How to Relax without Getting the Axe
Author: Stanley Bing
Publisher: Harper

FEW people working in large businesses seem content with their day-to-day jobs. The initial diligence that any newcomer displays is unsustainable as soon as he finds out that business is a hamster wheel, that he is the hamster running all day long, huffing and puffing to keep things turning.

As soon as it dawns upon the newcomer that there is in fact no future (or a bleak one, at the very least), work becomes a chore, effort is kept to a bare minimum, and quality of the final product is compromised. The newcomer eventually rises to a certain position where he no longer has the opportunity to advance any further, thus becoming the bitter and disgruntled employee who is stuck in a situation where staying on and quitting equate to the same thing – hardship.

Yet, for every obligated rodent who keeps the wheel running, there is a sleek furball happily “working” in the corner office down the hall. These guys seem to contribute less, and are often more unreliable and irresponsible. However, they soon rise to the top on the back of hefty bonuses and “business meetings” to various countries. The rodent, it seems, eventually mutates into the fat cat.

These crafty people have mastered the concept of executive life, what Bing describes as “the middle ground between slavery and unemployment”.

In his book, he goes on to explain the executive life. Citing examples such as the provision of big bucks with bonuses (in spite of screwing up), US$150 lunches, the loss of touch with reality, as well as drinks with “friends” who would like to see you dead. According to Bing, the secret of happiness is to live such a life whether one deserves to or not. The fact is that nobody deserves to. Therefore, to quote Bing: “Why shouldn’t you not deserve to at the same high level as other guys who don’t deserve to?”

The book teaches us a phalanx of ploys, evasions, hoaxes and clever swindles grouped together under a simple name: Executricks. Along the way, Bing guides us through the core skills that no budding office ear picker can afford to do without - delegation (telling people what to do and having them do it), absence (operating from the digital vacuum), abuse of status (it can be done), decisiveness (even when confused) and engagement (but only when necessary).

Bing cites a few examples of respected figures who have mastered executricks. The greatest delegator in history, Ronald Reagan was widely chastised back in the day for sleeping during meetings and allowing his wife to act as the actual chief executive. Yet, he is remembered as one of the greatest American presidents, with nary a word implying that he snoozed through the majority of his second term.

Today, great potentates such as Putin, Jobs, Gates and Kim Jong Il are honoured more in the breach than in the observance most of the time. They have mastered the ability to be the perceived train drivers when they are, in effect, invisible. Can you imagine a Kremlin worker complaining about how lame his boss is for not having been in the Pedestrian Control Department for years? No – the reason being that Putin is totally there, even when he’s not.

It may seem this is the perfect book for those who intend to shirk responsibilities, however Bing makes it clear in one of the final chapters in the book that work is inevitable to the executive. Work is like crisis; there is usually one waiting to happen. The goal therefore is clear – to work with maximum power for the shortest amount of time possible.

But how is one to know what work is, and what isn’t? Thankfully, included in the book are several important definitions of work:

a) Professional expertise, accumulated by you over a period of time, is needed;
b) The need to “get things right the first time” is not imaginary;
c) You get paid for it, and if you don’t do it you don’t get paid at all; and
d) Somebody told you to do it.

The key when the alarm bells sound are to treat every piece of work as a battle. There’s a reason why business types love to read biography and history – it provides them with a useful metaphor! There are numerous conflicts that one could be dealing with during work, and as long as one manages to avoid getting bogged down in long-term unwinnable campaigns (Vietnam, Iraq, Afghanistan), one should be fine. Transform these into short, hard pitched battles, and one can give up work and get back to “work”.

A word of caution. This book is not for budding yuppies looking to rise to the top of their respective businesses or management consultancies. There are various self-help, motivational and Warren Buffett-type books available in the market for such cases (although fetching tea or coffee while staying attentive to the various needs and wants of your boss probably helps as much, if not more). Rather, this book is for the person who realises his or her standing within an organisation, and intends to derive the maximum utility from such a position.

Bing’s ethics might be questionable – but then again, so were Machiavelli’s in the medieval period. And nobody called Sun Tzu a saint either, yet both men are exalted on the same podium as a certain Ronald Reagan. The same fate awaits Putin, Gates, Kim Jong Il and whoever else is able to master the subtle yet effective skills of executricks. Now if you will excuse me, there is a sandwich I need to enjoy.