"Perfect Slice of Summer" tissue boxes

Background information: Los Angeles-based Illustrator Hiroko Sanders created the illustrations for the Kleenex “Perfect Slice of Summer”, new limited edition tissue box series for Target Stores. Since the illustrations are the primary part of each carton, the challenge was to create artwork utilizing a style that embodies the spirit of summer, and that works uniquely with the carton design. The three boxes are images of different fruits rendered with a stylized realism that unifies the design of the package with the brand and product.

Project credits: Hiroko Sanders, Illustrator
Jennifer Brock, Senior Designer/Brand Design – Kimberly Clark Corp.

Before & After: Nutrisoda

Before

After

Hunt Adkins, a Minneapolis-based agency, recently redesigned Minnesota-based Nutrisoda:

"Nutrisoda needed to embrace its identity as a soda. The 8.4 oz can of the old packaging screamed energy drink and led to confusion. Our solution was simple: change to a 12 oz can. Second, the old mark had taken a back seat to more prominent design components. But it was imperative people recognized the brand Nutrisoda while finding a way to highlight we are a soda (albeit a better-for-you version). Therefore, we established a proper brand hierarchy that showcases our name and product, using valuable shelf space as a marketing opportunity. Finally, we used bubbles and colors on each can to display the fun, fizz, and flavor that consumers look for in a soda, while allowing the unpainted aluminum to speak to the clean, modern and healthy beverage Nutrisoda contains. Together, these add up to Nutrisoda: delicious, guilt-free fizzy goodness made real."

Nominated e-mail messages by using the rules in Evolution

Often we get spam messages from the same e-mail address or carry about the same, so most of the e-mail management programs carry a feature called Rules or the Rules, and can take advantage of this property to purify and classify messages or perform different commands in case the applicable conditions that we have selected to the message. And today I will explain how to use this feature in the

Insuring the risk of high inflation

Can people buy insurance against the risk of high inflation?

My answer is "yes". But it cannot be done by commercial insurance companies. It requires a new way of thinking on the role of governments and the free market system.

I shall give my views on this matter within the next few weeks, either in this blog or in www.theonlinecitizen.com

Civil servants and part time jobs

I read a news report that the Malaysian Government now officially allows its civil servants to do part time work to earn a supplemental income to meet the rising cost of living.

There is a risk that the civil servant may abuse their official position for personal advantage. I wonder how they will manage this risk?

But the underlying problem is the need to give higher wages, at a time when the Malaysian Government face a budget constraint.

What is the solution? Can the free market capitalist system find a solution? Financial speculation, which is a key part of this system, appears to be the major source of the problem.

Terminal bonus lead to Equitable Life's failure

Hi Mr Tan,

Guarantees cost more money. Why does terminal bonus (with less guarantees) contributed to the Equitable Life's failure?

1) Penrose report, chapter 14, para 185 and 186 analysed some financial data :

185. In 1983, the investment reserve was approximately 37% of the long-term liabilities. In 1999, it was approximately 17%. Over the period 1986 to 2000 terminal bonus payments increased by more than 14 times. Further from 1983, the mix of reversionary to terminal bonus shifted in favour of terminal bonus.

186. ...the accelerating growth in terminal bonus payments was fairly consistent over time... Had the Society recognised terminal bonus in its statutory accounts and regulatory returns on any basis consistent with PRE, its financial weakness would have been exposed throughout the 1990s.*

This shows that the Equitable was diverting free assets into terminal bonus payments. More importantly, it implies that reversionary bonus that requires prudent reserving (ie setting aside money) for all generations of policyholders is a fairer approach and helps to avoid misappropriation of funds.

2) Lets see what a policyholder had to say (http://www.emag.org.uk/index.htm?documents/assessment_28112003.html~content) :

.... throughout the 1990s Equitable declared bonuses well in excess of the value of assets to improve its marketing appeal. In consequence it was paying out departing policyholders in excess of their asset value with money from new investors. This pyramid selling left a hole of some £3bn which all policyholders who did not leave before July 2001 have paid for in savage reductions in policy values...

3) How did Equitable declare bonus in excess of the value of assets? My understanding is as follows :

- management was driven by growth (ie new business)
- terminal bonus is not guaranteed and is more flexible to increase/decrease
- so management started to shift more to terminal bonus, projecting high terminal bonus (to attract customers)
- these bonuses were not sustainable, but the terminal bonus had become a marketing tool (decreasing it will lose market share)
- so management misused the investment reserve, using it to pay high bonuses to maturing policyholders at the expense of younger generations
- management thought that since terminal bonus is not guaranteed, they can always decrease it
- management thought that when the investment market booms, all problems will be solved but investment did not boom
- effectively, they had a ponzi scheme running which did not hold up in the courts

4) How reversionary/annual bonus could have prevented the collapse?

- imposes more discipline, ie set aside provisions for bonus, ensure unsustainable bonus are cut, control new business growth
- fairer way to share profits with all generations of policyholders and not just the maturing/claiming ones

5) Why do different actuaries have different opinions?

Quoting a friend : "the one who pays the piper calls the tune".

Yew Ming

Principal Guaranteed, Principal Protected

Hi Mr. Tan,
Let me explain what I know about the difference since I have held some of these products before:

Principal Guaranteed – The issuer (not necessary the bank selling you the notes) guarantees it. As long as the issuer does not go bankrupt you should be safe. However the issuer of such notes are usually special vehicle companies set up by reputable banks such as Merril Lynch. So the vehicle goes bankrupt the bank itself is not affected. Not sure if that is their intention but I read it as so. But generally I think it is quite safe.

Principal Protected – Usually the issuer takes your money and go purchase a zero coupon bond and so get a discount upfront. It is protected as long as the bond issuer do not default. As I understand it the bonds invested are usually rated A+ and above (does not really mean much as Lehman Brother bonds are also rated A+). The money they get from the original discount is then used to “invest” in a risky way , i.e. options, currency and whatever. Once they have lost all your money thru these risky stuff and taken their fees, then they tell you now you are sitting on a zero coupon bond and waiting the next 5 years with zero payment.

Basically my point is that these products are TOTALLY NOT TRANSPARENT and USUALLY DO NOT EVEN give return of FD over the 5 years. If the investor wants to get that 1-2% more than FD, I suggest they go buy bond themselves and invest the rest. Sorry just my 2 cents....I do get quite passionate about this as I have seen many people suckered into such deals.

C

REPLY
Thank you for the explanation. I agree with your explanation.