Thomas

Asian banking landscape post-crisis part 2

2010-06-07T19:24:00.000-07:00

One-stop shops
Part 1: http://mondieu666.blogspot.com/2009/07/asian-banking-landscape-after-crisis.html

Commercial banks like to call it Corporate/Wholesale banking, which is essentially investment banking to a lesser extent. Activities such as debt issuance and underwriting are usually overlapped with those carried out by bulge brackt banks. In some emerging markets, commercial banks have demonstraed real strengths competing against their Wall Street conterparts, depsite the fact in tradtional invesment banking businesses such as M&A, Equity raisings, BBs still remain largely unchallenged.

Focus
I’ve chosen to focus on Standard Chartered Bank(STAN LN),one of the best performers throughtout the credit crisis(and possibly the only Anglo-Saxon bank which did not ask for government funding). The British bank generates over 90% of its revenue from the emerging markets and it’s rated A-AA+ by Moody’s and Fitch with a stable outlook. Standard&Poor’s gave its outlook a negative, likley due to the pending financial reform and current global uncertainty affecting the entire banking industry.

Progress in Asia
Contrary to HSBC and CITI, two of the largest foreign commerical banks in Asia, Standard Chartered is pushing heavily towards developing its investment banking division. In areas where Standard Chartered still trails behind, the bank’s management team has displayed some serious talanets in playing catch-ups with the big boys. Notably in 2009, tts investment banking unit has received a significnat boost through the acquisition of Cazenove Securities, A unit of JP Morgan and a star performer in Hongkong's debt capital market.

Compeitors:
·Given the bank’s emergining market focus and China’s growing prominance in the global capital market, Standard Chartered is well potisitoned to take advangtage of furture growth opportunities. The immenent threats to the bank’s growth come from external environment and compeition from the better-known rivals: CITI and HSBC.

·RBS seems to have exited the Asian markets, Barclay’s Asian strengths confine mostly within debt markets, BNP Paribas is universal but lacks reputation. Societe Generale has enough problems at home. Santander might have gone native in Latin America but the same recipe is difficult to follow here. JP Mogran and the likes of American banks need to deal with the financial reform bill first. ANZ is just too small.

External threats
·Dubai debt restructuing may force the bank to take a sizeable haircut, being one of the largest lenders in the region with 7.7billion exposure, it remaines to be seen how Standard Chartered, along with HSBC( also a big lender) deal with future uncertanity
·Revenue derived mostly from emerging markets= increased risk of concerntration.
·Dancing with China’s bubbles, urgently required of a plan-B in the case of emerging market overheating crisis.
·Financial reform bill

Shareholder Holdings:
Tamasek, the Singapore soveraign fund, is STAN’s largest stakeholder with 18.04%
CITI is 20% owned by the U.S governement due to subprime bailtout. 3.87% is held by the Singapore government
HSBC data not disclosed.

League Table
Below is a detailed breakdown of rankings of the three commercial banks(HSBC,CITI,STANDARD CHARTERED) for the first half of 2010, courtesy of Bloomberg

U.S bond market
STAN’s rankings in the international debt market remains within # 40-5. In th U.S and Europe. For example, the 2010 internaionl bond market sees STAN stand at #49, HSBC ranks # 3, CITI #8.

In the U.S bond market, STAN floats within the space of #20-#30, for a market dominated by bulge bracket banks. This is not at all bad eg. STAN’s ranks relatively high at #19 in the U S high yield market, albeit strill trailing HSBC#18 and CITI#4. in the corporate bond market STAN ranks #22.

International bond market
In global high yield market overall, JP Morgan leads by a mile. CITI#4, HSBC#14, STAN# 22, interestingly, in 2007 STAN was #46 and was absent over a two-year period( 2008-2009). Which’s quite a leap for a commerical bank one-third of the size of HSBC. Dubai Electrity& Water Authority being the biggest contributor to STAN’s underwirting revenue in 2010 (USD 250M@8.5%. With a 5-year maturity)

A few highlights in STAN’s primary regional markets
·In HK dollar bond market, Stan ranks # 3, HSB 1, Citi #11

·Singapore dollar-denominated bond, DBS # 1, HSBC#2, STAN#3, CITI not in top 10

·In India, STAN ranks #2-3 on a consistent basis, ahead of HSBC#6,CITI#13

·In Asia-Pacific ex-Japan G3 currency bond market, STAN at #11 leapt from last year #20, HSBC#2 and CITI#4, all three ahead of, RBS, BNP Paribas. STAN in G3 investment grade bond market(Asia ex Japan) also jumped from #22 in 2009 to #12 in 2010.

·An even more stellar performance is seen in corporate high yield market in Asia ex-Japan, where STAN ranks #2, second only to BoA Merill Lynch and ahead of GS,CITI, JP Morgan Credit Suisse,Deutsche Bank. HSBC ranks #14, STAN’s rankings in 2007 was #13 and the bank was abesnt from the league over the last two years.

·In Asia local currency bond market, STAN ranks consistently #2, second only to HSBC.

Equities Underwriting
STAN rankings move between #25-#35, nothing spetacular here, most businesses are shared amongst bulge brackets.
In the Chinese markets, Only Goldman Sachs(Through JV with Gaohua Secruities), UBS(Through JV with Beijing Securities)and Morgan Stanley(in the form of CICC) make it to the IPO league, presumably due to the fact that only local Chinese brokerages and joint ventures can underwrite local currency A-share listings.

M&A
The only spotlight for STAN within M&A advisory business is in India, ranks #4.(over 17% of market share), CITI #4, HSBC #7

Politicians

2010-04-27T19:21:00.000-07:00

If Angela Merkel had a choice, she would either have bailed out Greece much earlier or responded to the bailout plan with a firm "Nein". Her indecisiveness is primarily due to the fact that German voters, most of the time do not understand the significance of rescuing an irresponsible, C-list economy, hence toeing the line between domestic sentiment and that of the EU members is somewhat a necessary political dance. Like what Mr. Obama did with healthcare and what he is doing now with the 1,400 page financial reform bill largely incomprehensible to 99% of the Americans.

Nicolas Sarkozy ,on the other hand, is acting in the interests of the EU as a whole. Granted, His eagerness to help out Greece, if successful, will benefit him a great deal. For starters, It will make him a stronger presidential candidate during the 2012 election against the out-going,soon-to-be-a-contender IMF president Dominic Strauss Kahn; the Greece rescue will also avoid hurting the France's banking industry which stands to lose the most in the event of a Greek default. Mr. Sarkozy can be convincingly good at dealing with finances, he is swift and knows when to act, more importantly, he's unequivocal about a united euro zone and unlike Mrs Merkel, he is determined to see it through. This makes him less popular, but the current state of the EU is desperately in need of someone who's decisive.

In less than two weeks' time, both will have to reach a consensus over the fate of Greece and, by extension, the fate of the euro zone. Everybody else is at their patience's end.

As for why I am fond of a humorous German
http://www.nytimes.com/2010/04/28/opinion/28iht-edbuhrow.html?ref=global

Fundamentally speaking, long the Aussie

2010-04-04T20:21:00.000-07:00

Commodity currencies enjoyed a spectacular run in 2009 with the Aussie dollar in particular surging over 27%, the biggest rise among major currencies. Granted, the country’s fundamentals are hard to find fault and the Aussie only fell in sympathy with the rest of the world amid the financial crisis. With this year’s government stimulus weaning and sovereign default becoming reality, developed currencies and their host economies are likely to wobble. But for the Aussie there appears to be nowhere but up.

The Aussie strength is supported by a variety of factors at home and abroad, courtesy of a hawkish central bank, a relatively trouble-free financial system, anemic growth overseas and, China.

RBA
RBA’s interest rate moves against the backdrop of 2.7% GDP growth are just a beginning. Steady unemployment data and an overheating property sector lay the ground for more rate hikes and rightly justify Governor Glen Stevens’ TV appearance to give warming on speculative mortgage borrowing. February’s disappointing retail sales may prompt the bank to give the status quo a second thought, but it hasn’t dampened market interest rate expectations as the economy powers ahead. At least another 50bp rise by end of September has already been factored in the economy; Complacent or over-confident, to the Australians, the country’s outlook has never been better.

Banks' lending
In hindsight, Australians have reasons to cheer for missing out on the leveraged game that bruised many connected to the U.S subprime; now they will applaud the country’s economic divergence from the U.S and proximity to the growing Asia. The big 4 Aussie banks have minimal exposure to leveraged loans overseas and their balance-sheet repairing initiatives include reducing wholesale financing and shunning commercial lending in favor of retail deposits. The over-prudent pursuit for stable funds and the over-cautious treatment towards SME market is likely to stave off many businesses, but that’s a distant worry. The more palpable effect of selective lending tends to introduce more speculative capital in the property sector and further fuel up the Aussie dollar.

Overseas Growth
Lack of growth elsewhere has also been playing a role in pushing up the Aussie. The euro zone is beset by debt problems and the Euro still hasn’t found a floor; The U.K is still hung up on the possibility of having a hung government; Japan is planning for more QE to hold down rates, carry trade against Yen is back in vogue; the irony of the U.S taking the lead for global recovery in 2010 is intriguing, but commercial real estate is a ticking time bomb and can surprise any day when the Fed still has its hands tied on underwater mortgages in the residential market. Notwithstanding this week’s non-farm payroll, if current gold price and the country’s burgeoning deficit are any guide, confidence in the dollar may have been over-played by several notches.

M&A
An uneven recovery and European sovereign concerns has brought back Asian investors’ appetite for risky assets and the Aussie as an alternative foreign reserve to the dollar. Last year’s 155b worth of deals made Australia the hottest M&A market in Asia. Not surprisingly China got the lion’s share. The communist state has been actively encouraging FDI as a way to channel out hot money and uncover offshore growth opportunities. Already the 1st quarter has seen several multi-billion deals in the Australian resources and energy sector. There’s something else in it for the Chinese government too: troubled by currency risk and driven by a desire to diversify away from the dollar, CIC, the 200b Chinese sovereign fund has made bold moves all over the world since the second half of 2009. Its 421m investment in Goodman Group, an Australian property development group, is only a tip of the iceberg. The fund has become more transparent and strategically-conscious in terms of doling out for foreign assets of national interest. It will not be surprising to witness more deals done on a grander scale in 2010

Iron Ore
Even if future rate hikes by the RBA have been priced in the Aussie, a surprising turnaround on iron ore negotiation has most certainly not. China has managed an unrelenting stance towards the U.S over issues from climate change to trade imbalances, but the same can not be said with Australia. Iron ore is currently trading twice as high as it was priced a year ago and the big 3 miners are on track to gaining client's approval to accept a more market-oriented system. Quarterly pricing is already a default setting with Japanese steel makers, the Chinese and the European are likely to follow suit. Putting too much stock on Chinese steel union’s negotiating power is as naive as hoping the entire steel industry to speak with one voice. CISA ‘s effort to get a 45% discount on iron ore prices was undermined by a 33% acceptance from neighboring Japan and South Korea but more importantly, by the lack of coherence from the Chinese steel suppliers. The government’s relentless attempt for price cuts will prove to be futile in the face of an outdated benchmark system and the country’s own resources dependency.

Underlying Strength
The Aussie is currently trading below the 98c high in July 2008 and it’s simply retreading the same path that it has trodden before. The currency has been holding up well against market gyrations since March 2009. Even worries over Dubai and a shaky Greece have been proved too far removed to have any material impact on its run-up to parity. Market sentiment over the past year has also been overwhelmingly positive with commercial and large traders taking consistently long positions in the commodity futures market.

Australia is enshrined in emerging markets demand. In the absence of another Lehman-esque type of market seizure, the Aussie is likely to reach parity by the end of 2010.

My Easter revelation

2010-04-02T07:07:00.000-07:00

When Ben Bernanke succeeded Alan Greenspan as Chairman of the Federal Reserve, I could tell my professor was elated: he spent half of his introductory macroeconomics lecture talking about how he sent his buddy a congratulatory note upon receiving the news and how strongly he believed Mr. Bernanke was the best guy for the post. His elation was infectious. I leafed through my newly-purchased textbook which my professor and Mr. Bernanke co-authored, followed by a great sense of relevance which made me feel instantly privileged.

It was indeed a well-written textbook. but my lack of interest saw me almost flunk the final exam. The only thing I took away from a semester-long learning expereince was supply-demand equilibrium, which, according to my Engineering friend, translates into " stating the obvious."

Two years later, the sub-prime crisis broke out. No sooner had the market liquidity dried up than a deluge of rarely-heard/newly-invented terminologies began to inundate the press: TARP, mortgage buy-back, counter-party risk, liquidity trap, zombie banks, hyperinflation, too big to fail.... I felt like I sleep-walked through all my economic classes.

Last night, I picked up a local newspaper on my way home and came upon an inspiring tale: a Swedish homeless guy who wandered about the street collecting trash cans and consuming scraps died of a heart attack at age 60. Shortly after his death, his relatives discovered that he had a stock portfolio worth 1.1 million dollars. They also found in his "home" 150 bars of gold worth $450,000. A close friend of the homeless man told the reporter " He had lived a frugal life but he knew the stock market inside-out. He spent his days in the public library studying financial markets, he didn't buy newspapers because he could learn for free."

The moral of the two stories? University economics is, at best, misleading; at worst, a waste of time. If you are passionate, you will learn it yourself.

Health care

2010-03-31T04:02:00.000-07:00

I am not intimately familiar with the newly-elected health care reform but it seems to me the U.S is moving closer towards socialism, which the country used to sneeze at prior to the economic crisis.

As an outsider, I am more concerned about the potential costs of the bill adding to the country's swelling deficit. Mr. Obama said the reform would not blow up the national coffers. Doubtful. The health care industry accounts for 16% of the country's GDP, even the slightest change could cause a material effect . Not to mention money spent on lobbying, debating, filibustering only to unconvincingly secure a marginal win over Republicans.

I don't like the argument of "long-term savings come later" from the beginning. For one, potential savings derived from the reform are built on the assumption that the economy is recovering as planned; Not likely and you know it. For the other, taking out future loans to pay for today's expenses? No thanks, not after the bust of the credit bubble.

Granted, it's Obama's biggest victory yet. But outside the states, not everyone is happy. Take China, for instance, which currently holds American debts roughly equivalent of the costs of the health care bill, or somewhere to the tune of $900biilions, That's on top of trillions of debts the U.S has amassed over the years,. Can the country's creditors, and I don't just mean China but also Japan, Germany and France expect their loans to be repaid in the foreseeable future?

Of course I am happy for the 32m Americans now that they are covered. In fact, I listened to BBC the other day and a black woman with pre-existing medical conditions was denied of insurance, she had to struggle through the past decade since she lost her job in 2001, now the passage of the health care bill had renewed her outlook on life and she was confident to find work again. That sounds great. But who will eventually pick up the bill? Probably not this woman.

Now that Mr. Obama has scored big time and that's not even half-way into his presidency. His next move is likely to be another reform. This time in the financial industry. Then what next? trade imbalances reform? Global warming reform? whatever his next move, Mr Obama is highly skilled at pushing ahead populist policies. But I think what he now needs to pay more attention to is the country's astronomical levels of debts. Otherwise he might very well run out of money for the next reform.

Currencies

2010-03-19T00:37:00.000-07:00

One way or another, either EU or IMF will bail out Greece. Germany will be reluctant but pressure on the country's responsibility to save its brethren is high and things will get worse if they don't. German exports primarily flow within the eurozone, when looking outside the continent, nothing has significantly improved in the broader market since January.How can Germany stay calm when its own survival depends on the survival of other consumption-oriented economies like Greece? Kicking a profligate member out of the zone is just populist talk, a break-up of the euro is worse. For starters, devaluation of new sovereign currencies in response to export competitiveness will have Germany cry foul for decades to come. EUR should stabilize any day now when a concrete rescue package(or a concrete promise to rescue) is on the table, but euro-wide sovereign crises will likely to make the currency go for another dive before coming back to 1.5-1.6 at the end of 2010.

AUD/JPY, carry trade back in vogue? Japanese households are not earning enough in their own economy and have been looking at outside opportunities. Evidently There has been strong trends of yen-denominated managed funds making their way into the high-yielding overseas markets such as Australia, where cash rate stands at 4% and will likely to rise another 50bp within the next 6 months. AUD/USD will probably challenge parity once again. It was very close to reaching its goal pre-crisis. Meanwhile the Fed is still stubbornly cautious about rate hikes so there will probably be another 6-9 months of doing nothing other than refraining the "extended period" cliche, further flaming the Aussie.

One caveat is what looks about to happen in China. the Chinese steel industry is secretly suffering from overcapacity but everybody does seem happy about buying commodities non-stop. Rio Tinto reconciliation with Chinalco paves way to another promising JV so presumably everything is fine again? Another sticking point is China's unrelenting attitude towards iron-ore pricing. Should that persist and China decides to slow down or finds ways to diversify its resource dependency, AUD can kiss dollar-parity goodbye.

Taken the country's internal problems into account, the currency trade will be even more risky. NAB, the big 4 Aussie bank, has recently revealed debt losses totaling more than 1,6billion, the other three have skeletons hidden in their closets too. Moreover, Australian households are incredibly leveraged and banks heavily rely on foreign financing. Let's see if the debt bubble will prick this year.

Political bubble bust more likely

2010-03-13T02:13:00.000-08:00

Last year, house prices in the big Chinese cities noticeably rocketed. A friend of mine sold an investment property located in an affluent neighborhood in Shanghai and pocketed twice as much the price offered a year ago. According to her, that’s a modest gain. But housing euphoria was certainly not confined to coastal areas. I lived in a 2-tier capital city of 1.7m population. A week ago the local government auctioned off a CBD land-use right, registering the highest land sale price in the province's history.

Few can argue a housing bubble is dangerously growing on the back of the 585billion stimulus. Yet at the annual National People Congress, government officials talked as if they did not live in china for the most part of last year. Confidently citing a rather comical figure released by the National Bureau of Statistics: the officials spoke loud and clear that, on average, house prices rose by a mere 1.5% in 2009.

Equally comical is the reaction from the representatives of real estate developers, who claimed they weren't any better last year and took the chance to educate the public that on average,real estate industry only yielded a very modest 12% profit on each house sold. But unlike the no-nonsense government, they probably have to explain the 65 real estate developers who have made it into the Forbes China's Richest 100 last year.

However bubbly it might seem, doomsayers may disappoint themselves hanging on the belief that China’s property market is due for a free-fall. Crucially different from the then U.S sub-prime and now housing collapse in Spain is that China’s residential real estate ranks easily among the least leveraged marketplaces in the world: at least one-thirds of a property value is willingly paid for and timely settled in cash; half the homeowner population is mortgage-free. This prudent practice reflects the self-reliant Chinese psyche and prepares a cushion against an imminent interest rate shock.

The central government has also stepped up efforts to alleviate the pain: Chinese banks have been told twice this year to shore up their books and restrict lending; a promise to allocate more land for affordable housing topped this year’s directive. The government now requires a down payment of 50% for land purchases and bans construction of villas. In short, there is a bubble, but it’s manageable.

Property crash aside, social turbulence abounds. There's no denying that almost every newly converted urbanite can ill-afford a house. This again has sparked waves of citizens’ protests following last year’s controversial nationalization of mines in Shanxi province. The refrain “Guojingmintui” (The state advances, citizens recede) has since joined the most-discussed list of topics, second only to the housing mania. Meanwhile, local governments continue to profit from land sales, developers still favor grandiose homes instead of flats, and speculators continue to hoard and flip vacant properties. It’s no secret that the average Chinese now stomachs a pent-up resentment the size of the property sector towards the state.

Unlike in the past, the government is finding no support everywhere it looks. Heavily criticized by outsiders for its currency policy, social unrest is also brewing fast at home. What to do? Appreciating the Yuan discharges only some hot air at the expense of the country’s fragile exports; taking an unyielding stance towards the currency only stokes inflation, interest rate hikes only bring more pain to the real estate market.

What China needs, in the long term, is the creation of more retail avenues through which hot money can be channeled abroad. It’s high time Chinese detached themselves from the mindset that a house is a bar of gold and be given more accessible opportunities to invest. For now, the government needs more resolve to curb property stockpiling through imposing a much more severe holding tax. That will bleed local governments and developers, but those gamblers should have seen that coming a decade ago.

Greece

2010-02-01T04:09:00.000-08:00

Greece looks set to get a bailout, others in the EU look ready to give it one. At least that's the underlying tone expressed by the European leaders at this year's Davos.

First, Greek Prime Minister George Papandreou has rolled out a seemingly unrealistic austerity plan to bring the nation’s burgeoning deficit down to 3%( currently 12%-13%) by 2012. Yet Jean-Claude Trichet, the hawkish-sounding president of ECB, remains convinced of its feasibility, much more than his own exit strategy.

Second, talk of kicking Greece out of the EU has been unequivocally dismissed; primarily for fear of a break-down in the euro zone. French Finance Minister Christine Lagarde has made it clear that EU members are jointly accountable to each other and echoed Jean-Claude’s view that Greece stays no matter what.

Third, EU leaders worry more about the collective debt status of the region than a single indebted member. With most countries' deficits hovering around 7% in the euro zone; at 12.7%%, Greece may not seem so wild. Although Germany has announced there won’t be any bailout for EU members, when push comes to shove, rules can always be bent. Furthermore, the resultant drop in confidence for the euro is not all bad in the eye of the European's biggest economy, whose exports are given a needed breather as the home currency continues to lose ground.

Fourth, the delay of an aid brings back memories of the Dubai World crisis. So it hardly seems cynical to view it as the EU leaders’ way of telling the rascal(s) that fiscal disciplines are needed and profligacy will not go unpunished. Greece’s perennial fudging with public finances culminated last year when it shocked the EU with a drastically upward revision of its deficit. Now comes the time for the wider community to rescue a repeat offender, taxpayers must be convinced that a lesson has been learned. Increased transparency is a pre-requisite for the aid to be implemented and monitored effectively.

Perhaps most importantly, and perhaps why George Papandreou was quick to distance Greece from rumors about China’s funding, is that the EU does not want its garden grow more of Asian herbs. If two weeks of doing nothing with its 2.4 trillion foreign reserves can generate sufficient interest to cover a €25-billion obligation, then a national deficit this magnitude is really just paltry by China’s standards. But €25 billions of debt is enough to invite a Greek tragedy. The downside of having China as your creditor is that political strings are often part of the deal, especially when a rescue comes from a sovereign fund.

At a time when the euro region is being tested for its monetary strength, losing Greece to China will be strategically unthinkable. Members in the euro zone entered the crisis together and they will have to show solidarity and fight their way out together. Not least to prove to the U.S that the more humane version of European capitalism is better, but to face up to the emerging giant that’s wielding too much power around the globe.

Yet bailout brings unwanted consequences, the universal ones being moral hazard and public anger, but some are more specific to the euro zone.

Saving Greece will mean a violation of its no-bailout policy and butterfly effect on peripheral countries with ballooning debts. The former obstacle can be circumvented via a more implicit rescue package not in the same vain of Abu Dhabi's; but spooky investors scurrying away from the weaker economies will cause collateral damage within the region. Worse if it ripples throughout the rest of the world. If European leaders don’t clear the air soon enough by assuring the market what the EU’s next move will be, we could very well lose a recovery before we could even save the Greeks.

French National Identity VS Burqa Ban

2010-01-29T18:16:00.000-08:00

Unlimited religious freedom is a beautiful concept but, in reality, it always has to be subordinate to the interests of the ruler. France is a secular state so it's no surprise to learn that advocating one's religion in public is generally regarded as unwelcome. Cultural integration, while it should not be forced upon, it should be respected. Just like the old saying: when in Rome, do as the Romans do." Foreigners in Saudi Arabia must obey the local customs, or they get stoned. In France, the most severe penalty you get from wearing a burqa is a fine of a few thousand dollars. Therefore some people's argument of intolerance must be established on a more convincing ground.

But is it a different matter when a civilized nation has sunken to the level of an autocrat? I think not. Democracy is never about complete freedom, rather than a system which is more willing to let different voices be heard. Once again, anything has a limit: sensitive issues which pose a threat to national security, which intimidate the majority of citizens' state of being, which violate the country's long-held principles that have been firmly entrenched since the Bastille Revolution, should not be obfuscated by political correctness. Boundary-less democracy is anarchy. No country can survive without a implicit set of rules.

Opponents of the ban fervently defend their right of wearing certain garments where in their own land they do not wear them at all. Proponents who view burqa as a submissive symbol for Muslim women could also run the risk of forcefully imposing western values on a ethnic minority. The controversy intensifies as people keep on guessing on both camps' motives and, as soon as they find a single fault of one another, they label it with either "terrorism" or "racism". In my opinion, we argue too much on a moot point. For those who wear burqa in France, I am afraid you have to give that up; for populists who enjoy arguing no end, you can now climb down your moral high-horse and for once, let the common logic be part of your response: if the values of a country appear conflicting with yours, you are welcome to go elsewhere.

The french deserve kudos for having raised a startling tone, which stands in contrast to the condescending attitude held by most Anglo-Saxons countries, where religious beliefs are now wielding too much influence that people will go to any lengths to show their tolerance for fear of being labeled as a bigot. Little wonder even a woman who, famously mixed secular matters with religious meaning on national TV could still be considered a worthy presidential candidate.
Would I want my message from God delivered to me by a politician? Duh!

Copenhagen

2009-12-17T02:46:00.000-08:00

Copenhagen is less than 24 hours from ending. For those who have not been following the progress closely, rest assured, you didn’t miss much except for a few attention-seeking remonstrations and over-dramatic display of tantrum from some negotiators.

Presumably, in keeping with the tone of the summit, the majority of people at the conference have decided to put “Climate-Gate” on the back burner and instead, focus on accomplishing the one and only mission: produce a legally binding successor to Kyoto Protocol. In layman’s terms it means accurately measure and effectively control your carbon emissions. Unsurprisingly, the path is obstructed by conflicts of interest between two camps.

The impact of the man-made global warming, so we have chosen to believe, is disastrous: island nations may sink underwater; citizens in African countries may die from food shortage. But there are less obvious victims even in the developed world. Most scientists will agree that Climate Change is literally an Armageddon that spares no one on the planet; most world leaders, however, pay too little attention to one of the most-affected groups whose members are torn between living in green and living to survive. - The average Chinese citizen.

In a likely scenario where climate talk in Copenhagen eventually breaks down, The Chinese government will earn the luxury of monitoring its own carbon emission without international pressure. In return, Western economies will get more ammunition for the next wave of China bash and more power to rally stone-throwers. The average Chinese, in addition to getting rising energy prices and lower standard of living, will continue to live through life as the biggest earth-polluter; an ugly image no even Tiger Woods can bear.

If, the last minute of the conference was kissed by an angel and China became officially rule-bound,(the possibility of The U.S agreeing to provide sufficient financial assistance to developing world required multiple angels’ blessings), The Chinese officials would have no choice but scramble to meet the pre-set targets. And the result of which would be another government-led spectacle put up at the expense of Joe Public.

The first spectacle stunned every Wall Street analyst and temporarily defied economic theory: China put off the magical 8% GDP growth, an arbitrary number built on looming asset bubbles, doubtful statistics and the gloomy moods of the disgruntled citizens who ardently stand by the claim “GuoJinMingTui”. Yet Dis-accords all swiftly swept under the rug, the Chinese way.

So why be surprised by what they can do now? Sure, meeting international emission targets may require efforts to merge a few hundred more mines, nationalize a few thousand private enterprises or even shed a few more million jobs, but the tricks in the bag are more than plenty to put on another act. Bottom line: a target is met and outsiders will never have to know how they achieve it.

Chinese Racism Towards Westerners

2009-11-29T23:45:00.000-08:00

FT Chinese just posted an interesting article on Chinese racism towards westerners. This is an interesting cultural perception that seems commonplace in China. See article http://www.ftchinese.com/story/001029993

This prompts me to think, do foreigners who make no effort to learn a local language deserve the same respect as those who took the pain?

The question seems particularly pertinent in today's world where China's economic clout has become anything but insignificant. When we come to a foreign shore, we are to be expected and we expect ourselves to adapt to the way of living of a local, the length of time spent on assimilating, however varied, often ranges from simply learning to communicate with basic linguistic knowledge to immersing oneself in the nuances of a foreign culture. I believe, the majority of people overseas, have at least made some effort in that regard with the aim to make our communication more effective and our lives more enjoyable. Some of us have been less successful and eventually reverted back to our own group of ethnicity. But overall, Chinese, along with other nationalities who were not inherently advantaged by the almighty lingua-franca, have shown tremendous respect towards our adopted country by taking to learn English.

Now I won't deny a large part of our motivation is still due to the fact of English global status. Realistically speaking, people have to learn the language if they are to compete on a global stage. Little wonder English will continue to strengthen its position in the world of commerce because the rest of the world will continue to put the effort to learn it.

What I can't stand are native speakers who make absolute no effort in communicating and expect everyone to converse with them in English. It's simply not acceptable when one does not adapt to a foreign environment and instead expects the other way around. I am always extremely tolerant towards people who can't hold themselves in Chinese fluently enough in a business setting with locals, but you should know that, every one of us has the right to not give you the satisfaction of superiority by choosing not to speak English with you in our everyday activity.

It really saddens me to learn that there are still many who carry with themselves the mindset that English is the only acceptable lingua-franca of the world and therefore those who speak it have no need to learn other languages. The notion, albeit statistically correct, is very culturally ignorant. When it comes to business, people might find the excuse to limit their communicative conducts in English for convenience and simplicity purposes. I will give you that, but if at a casual gathering, where the emphasis is focused on relation-building and fun-producing, and you waltz into the room, still expecting to be accommodated in your mother tongue when you come up to chat with me? Isn’t that a bit of a….ehh,,buzzkill for both of us?

The argument about Chinese being the hardest language to learn is vastly exaggerated. True, it can not be more different to the Germanic language system from which English originated. But do you really think learning thousands of irregularities embedded in English is a piece of cake for an Asian? I’ll tell you that, as a constantly evolving language of Germanic and Latin descent, it doesn’t make it any easier for us to learn than you do Chinese. And I don’t even expect you to reach a level of fluency in Chinese, the basic conversational ability of any language only requires some 6,000 words to make possible, with all the university qualifications you obtained and all the time you agonized over a racist taxi driver, you don’t even care to learn to speak a little?

So is this an act of racism? Maybe, racial prejudice manifests itself in many forms, but racism arises from ignorance about one’s culture is something you can easily avoid by simply not restricting to living in that little bubble of yours. Why did the taxi driver choose to do business with a local person over you? I can think of many plausible explanations that do not involve racial profiling. But let’s travel a more extreme route for the sake of the argument:

If you have gotten on the taxi, what would you have said to the driver with zero knowledge of English, if you could mutter out a few Chinese words here and there clear enough to instruct him where you wanted to go, my kudos to you, but what if the driver misunderstood and you two started to argue for an hour, all this time he could have made several trips for more money, right?

Of course any kind of racial stereotyping should not be encouraged, in your case, it could be that I risk generalizing westerners as strictly monolingual and ignoring those who are more linguistically competent, but hey, communication is a two-way street, would you expect a taxi driver to learn English just to broaden his foreign client base or you as an educated expat to learn some Chinese to make your life easier?

Based on your description, I think it’s a reasonable guess your friend in question can hardly speak Chinese: she could very well yell in the local language to draw attention of the taxi driver, if he heard it and still ignored your friend, he’s a fucking racist, but obviously your friend did not even attempt to make herself noticed in a way he could understand, because she couldn’t.

I have come to notice close-minded people often tend to shy away from efforts to get to know more about foreign culture. And the fear of difference results in too many cultural misunderstandings. I like to clarify that I don’t hate English speakers, I like them in so many ways; I like to applaud westerners who can speak Chinese even with an abysmal vocabulary and broken grammar, I applaud them because I have been in that painful shoes of learning their language, because I think they are brave enough to engage in self-deprecating which makes them more likable and, most importantly, I applaud them because their willingness to learn about me through my cultural identity, helps break down the arrogant impression the rest of the world imposes upon English speakers.

Now I understand a little more why Paris is also infamous for being hostile towards people who don’t speak French, parce que ceux qui ne font pas l'effort de comprendre, ne méritent pas notre respect.

Emerging VS Developed

2009-10-12T19:28:00.000-07:00

An interesting article written by Marko Dimitrijevic, founder and chief investment officer of Everest Capital.

WHY THE PHRASE EMERGING MARKETS NO LONGER APPLIES

The term emerging markets is obsolete. They represent half of the world's economy; their financial markets are large and liquid, with volatility, corporate governance and government policies very similar to those of developed markets. The traditional distinctions between emerging and developed markets, once pronounced, have disappeared.

Because of their high growth rates, emerging markets are now too large to be ignored. On a purchasing power parity basis, China's gross domestic product is larger than Japan's, India's is larger than Germany's and Russia's is larger than the UK's. The BRICs (Brazil, Russia, India and China) are as large as developed Europe. Surprisingly, the rest of the emerging markets (ex-BRICs) collectively command a greater share of the global economy than the US.

Even though emerging markets have very large economies, the common misconception is that they have fairly small, illiquid and volatile financial markets. This is definitely not the case. Because of faster economic growth, the out- performance of their financial markets in the past decade and the fact that many private and government-owned companies have recently been publicly listed, the market capitalisation of emerging markets has grown considerably and in total now represents 30 per cent of world market capitalisation, as much as the US. China now has a larger market cap than Japan. South Korea and Taiwan, two emerging industrial powerhouses, together have a larger market cap than Germany, and Brazil has a larger market than Australia.

Liquidity in these markets has also increased dramatically in recent years. So far in 2009, Chinese exchanges have traded more than the NYSE, South Korea more than France and India more than Canada.

Another argument against emerging markets is that they are too volatile and have unstable, unpredictable governments that leave them susceptible to coups or revolutions. In reality, however, volatility levels in emerging markets now nearly match those in developed markets. Even in the extreme market environment of 2008, emerging markets and developed market volatilities were very similar. So in terms of size, liquidity and volatility, emerging markets are on a par with developed markets and should not be discriminated against because of antiquated notions around these criteria.

Another popular knock against emerging markets is their reputation for poor corporate governance and less market-friendly government policies.

These criticisms are no longer warranted. Not only have emerging markets risen to higher corporate governance standards, but developed markets' aura of quality in this area has also diminished considerably. Enron, Parmalat, WorldCom and Countrywide represent only a handful of examples in this regard.

Further, while the west lectured Asia and Latin America in the 1990s on government policy best practices, the reverse is occurring now as the US and Europe create a striking display of inconsistent and erratic policies often favouring special interests. The handling of, and policies surrounding, Lehman Brothers, Railtrack, GM, Fannie Mae, Northern Rock and Opel are just some recent case studies to ponder.

There is, however, one measure that highlights a clear and continuing distinction between emerging and developed markets: growth.

In the period 2003-2009, sales for “Emerging Markets, Inc” (an aggregation of publicly traded companies in emerging markets) grew 11 per cent annually versus 5 per cent for “World, Inc”.

We believe that this differential in growth will continue for three main reasons: the differentials in GDP and population growth will be maintained for the foreseeable future; many emerging markets' basic needs have not yet been met, so starting from a lower base, consumption and investments will continue to grow faster; and from a risk standpoint their companies were and continue to be less leveraged, with higher interest coverage ratios than those in developed markets.

In fact their coverage ratios have improved significantly as interest rates in emerging markets have come down dramatically.

Emerging markets should matter a great deal for all investors, now and for the rest of our investing lives. Yet today they still represent only 12 per cent of the MSCI All Country World Index, while representing 30 per cent of the world's market capitalisation, 50 per cent of the world's economy and the world's best growth prospects. Investors focusing on benchmarks will miss this opportunity.

The end of emerging markets is here. Investors who don't catch on to this reality risk being left behind.

My electircty bill is a staggering AUD1,180

2009-10-06T19:12:00.000-07:00

Expecting imminent foreclosure........

A sustainable recovery is hard to come by

2009-09-20T16:53:00.000-07:00

1. Growth in a couple of European economies can not fill the gap for global demand. A closer look at the data will tell you that most recovery in the manufacturing sector is due to inventory depletion which's highly cyclical and as a result, does not provide support for a sustainable global recovery. Further more, Countries in the East and in the South, notably Spain, whose banks are still facing enormous balance sheet problems due to continuing writedowns in real-estate loans, will be a big drag in years to come.

2. UK central bank's QE appears extremely unsustainable. Quantitative easing floods the economy with abundant liquidity, it provides temporary relief but to the extent the majority of banks are still reluctant to lend, private consumption has not been getting the anticipated boost,this is the opposite of BOE's intent. The bigger question is: How confident are you of any central governement's ability to come up with and execute "exit strategies"? ie. When is appropriate to phase out stimulus and how?

3. The US economy is on a rebound, indeed. But what we have witnessed the last two months, the growth in auto sales, a larger proportion is attributed to the govt's "Cash for Clunkers" program. Car industry is crucial to the US economy,unfortunately it's faced with many challenges: diminishing profit margin due to consumer switching to smaller cars, industry regulation on carbon emissions and the more pressing issue: OVERCAPACITY. It sure didn't help when none of the struggling auto makers have been let die thanks to the unlimited supply of taxpayer's money.

4. China can only do so much to power its economy, as long as global demand has not come back, it's unlikely it will maintain growth over a sustainable period of time. China's efforts to adjust global trade imbalances and its focus on domestic consumption will have an impact, but the impact is likely to be short-lived if the rest of the world can not keep up with it.

Sovereign fund's stock picking

2009-07-21T05:58:00.000-07:00

Not that CIC, China’s foreign investment vehicle, needs further capital injection, but it’s reassuring to know the 200-billion fund is guaranteed unlimited ammunition should things get bigger in the next 3-5 years. Given the dampening demand in exports and China’s increasing exposure to currency risk, sovereign investment will give the central government more scope for maneuvering the flow of its foreign reserves. This will not only mitigate Yuan’s upward pressure, but also help to adjust global trade imbalances.

CIC’s recent recruitment of 30 market experts is part of the plan to move away from external management and towards a more active investment style. Apparently CIC still has a thing for Private Equity, but the expensive lesson with Blackstone is probably what prompted the corporation from the backseat to the driver’s spot: as the newly established Private Equity department within CIC will tell you that it now prefers to be proactive than stay a passive investor. Consequently, CIC investment portfolio will likely have a heavy weighting on industries that are more sustainable and forward-looking.

Renewable energy, among others, will be of the greatest interest to the fuel-guzzling nation. While it may be surprising to some, China’s environmental efforts in the past 3 years will put many developed economies to shame. Indeed, China can not sustain rapid growth without paying more for the environmental costs, which is why a lot of green initiatives are now being orchestrated by the government’s stimulus program, as well as by investors who have a long –term perspective on the country’s energy needs.

The bright outlook presents many opportunities to invest in green technologies; both domestic and overseas start-ups are ideal candidates and most are desperately in need of funding. In addition to offering high returns, green stocks also have the advantage of being less politically controversial, thus allowing relatively easy sources of capital inflow.

Sovereign fund investments in sensitive industries are not so promising, however. The fallout of Chinalco deal suggests that China’s overseas ventures will continue to be under great scrutiny. In 2009, the issue surrounding sovereign fund transparency has been addressed by many through portfolio and internal structure disclosure, but a government-controlled investment still resembles a Private Equity investment: much unknown and little regulation. Rather than try to convince, perhaps a more feasible way would be investing in small doses to avoid conflicts of interest.

As the reserve currency’s concern continues to dominate the central government’s agenda; CIC will, over time, prove to be the most effective tool to help China diversify away from the dollar.

Asian banking landscape post-crisis part 1

2009-07-18T05:12:00.000-07:00

Take a moment and picture what the post-crisis Asian banking landscape will look like: A massive exodus of global giants will undoubtedly accelerate a shift of power from multinationals to regional players. But who can fill the vacuum?

Take Royal Bank of Scotland, for example, after an embarrassing near-death experience, the bank has no other options but to bail out on its Asian adventure by selling most of the emerging markets assets.

Banks like UBS, heavily bruised by staggering write-downs and layoffs, has undergone restructuring and refocused on its core wealth management business in Switzerland, this one is probably not fit to come back anytime soon;

Credit Suisse, the other more resilient Swiss-made, is also getting calls from home, requesting it to scale down on international activity. Given the uncertainty surrounding EU’s imminent financial overhaul, it’s perhaps safe to assume, both in the short-term, have got enough problems to worry about on the home front.

The relatively well-off Deutsche Bank will probably be still standing firmly thanks to a substantially less exposure to subprime; in fact, it’s doing pretty well in comparison to its peers.

Goldman, Morgan Stanley and JP Morgan, rising from the dead, will still be allowed to play, but their radical conduct of business is no longer welcome. Macquarie Bank, ditto.

In short, the investment banking industry will be left out cold for a long while; the traditional banking will enjoy a rock star status in the coming years, as China will be under more pressure to convert its export-driven model to one that’s driven by consumption. This will be done by opening up more avenues to facilitate efficient cross-boarder transactions and encourage Chinese companies to foray into the international market as a way to channel out the “hot money”. The successful implementation calls for a more orderly financial environment and the support of liquidity through bank lending.

The reckless-borrowing and living-on-credit way of life does not warm to the Chinese; much less the fancy, complex securitization mumbo-jumbo, the vast majority of citizens, the growing Chinese entrepreneurs and the highly educated middle-class will be the driving force of consumption. As they become more and more financially savvy, they will turn to banks for financing advice, business loans, and overseas investments. The domestic banking sector so far has been largely uninspiring.

Black horses will emerge from Australia, having enjoyed the close proximity to the world’s engine over the past decade, now the time is ripe for the Aussies to venture beyond natural resources and transform itself into a services-oriented growth model. Comparing with developing economies, the banking industry in Australia is highly sophisticated, industry regulations are light years ahead of that in the U.S.

Among the four largest banks in Australia, ANZ will be the first to grab those low-hanging fruits, it has put in place an articulate Asian expansion strategy and vowed for becoming a super regional bank by the year 2012.

The bank appears relatively healthy despite a growing amount of bad loans; in fact, all of the Aussie banks have come into the crisis much better prepared than their international counterparts. This lucky nation is armed with one of the best financial regulatory bodies and banks that are more prudent in terms of lending policies.

ANZ has recently raised AUD$2.2 billion from shareholders as it seeks to bid for Royal Bank of Scotland’s Asian business units. The bank’s Tier 1 ratio, a measure of financial strength has risen as a result of capital injection, given ANZ more space and flexibility in pursuing strategic growth.

While the other Aussie banks either become too averse to overseas investments or lack the capacities to venture out of their homeland, ANZ has been proactive in negotiating the opening of 20 branches in China to further establish itself as one of the leading Asian banks.

However, the road ahead is not without obstacles, aside from economic uncertainty; ANZ will be spending much of its time keeping a close eye on the more prominent regional players, such as Standard Chartered Bank and HSBC, while holding domestic competition at bay.

Then again competing with those super rich Chinese banks is not a piece of cake.

When in China, do as the Chinese do

2009-07-16T04:45:00.001-07:00

The latest commotion with regards to Rio Tinto’s espionage allegation has put more strain on the already rocky relationship with Australia as well as on the fragile state of the global economy.

However, I am a bit surprised by the overwhelming amount of criticism directed at the secretive way in which China is dealing with the matter, yet so little has been given to Rio Tinto’s increasingly monopolist tendency and the possibility that the accusation might be true.

A retrospective review on the past six month suggests the scenario might have an intriguing twist:

Rio started what has turned out to be the longest iron ore negotiation in the history with China, the talks later came to a stalemate as neither of the parties agreed to budge.

In February, Rio then officially announced the US$19.5 billion deal with Chinalco in an attempt to pay down its debt obligations.

In June, Rio succeeded in pressuring Korean and Japanese steelmakers into accepting a 33% discount on iron ore. Meanwhile, China was still taking a firm stance on the 45% price cut.

Rio walked away from the deal and paid US$200million to Chinalco in compensation. Rio chose to raise funds through equity market and went on to form a joint venture with rival BHP Billiton.

Rio took advantage of the strong iron ore demand from Chinese steel industry through negotiating directly with domestic steelmakers, which has undermined the country central authority’s negotiating power on metal prices.

In July, Rio requested china’s suppliers to pay a penalty of 9billion for not honoring their pre-arranged contracts.

China authorities detained 4 of Rio’s employees on grounds of trading proprietary information on Chinese steel companies.

Rio gave itself a lot of wiggle room in the run-up to its final break-off with Chinalco. From the moment when it’s handed a life jacket to when it was rescued and threw the jacket back into water. The acquisition was intentionally dragged on for so long which allowed Rio to observe the public reaction and wait for a possible rally in the market. The boost stimulated by the possible white knight helped install confidence and increase market value of the company. Then, under the guise of national interest and concern for the state owned enterprise independence, Rio advanced its scheme by breaking off the deal and joining forces with rival BHP to form a monopoly.

Rio had never wanted to be held in the hands of Chinese. It didn’t even have to have anything to do with the Chinese investors should it not happen to run tight on cash. But China can not hide its resource dependency. Rio managed to hold up everyone’s appetite for a while and worked it to its advantage. It seems all of a sudden the company’s survival has made everything else irrelevant, the break-off penalty, the damaged relationship and the broken trust.

When a foreign affairs expert suggested that China still has a lot to learn about doing business with the West, because the government can’t seem to draw the line between national interest and commercial confidence; on the other side of the fence, Chinese think the West has a lot to learn about understanding the Asian mentality, because their companies can’t seem to grasp a simple concept: when in China, do as the Chinese do.

Furthermore, Rio’s accusation is not entirely unfounded; Stern Hu had traveled in the Chinese steel industry circle for quite some time. For someone who’s a native Mandarin speaker, it’s not only easier when rubbing shoulders with the Chinese, it’s also a big plus in terms of finding hidden opportunities in areas where foreign expatriates wouldn’t dare to look into, such as areas where corruption runs rampant and bribery being norm of the game.

By now if you are good at analyzing the Chinese psyche, you should have some confidence in those words coming out of the central government and realize this is more than a just retaliation. The guys up there hardly ever give out proclaims with no substance (8% GDP growth anyone?), and more or less they will be backed with hardcore evidence.

If a country’s president has endorsed a probe into your business dealings, you can guarantee you are a dead meat.

A brief note on China's economic outlook

2009-07-14T01:24:00.001-07:00

China should not go overboard in playing everyone’s hero in the recovery battle; instead it needs to think strategically in order to ensure a more sustainable economic recovery.

Ever since China’s announcement of its ambitious 8% target of GDP growth, analysts have pretty much preoccupied themselves with revising the country’s economic outlook and doubts on whether the annual target is realistically achievable or largely symbolic have been hanging over every economist’s head. As the story unfolds in the broader context, the later assumption seems to be gaining more and more popularity on evidence of a high level of economic activity taking place on the domestic front. Even the naysayers who remain unconvinced of the eventual outcome have started to produce cautiously optimistic forecast, among them is the World Bank, who has recently boosted its economic forecast for the Chinese economy to 7.2% from the previous 6.5%. The Shanghai composite index has risen more than 80% since the end of last year; All in all, China looks well on its way to achieve its 8% target against the backdrop of the great financial crisis.

China has demonstrated to the world it’s got what it takes to lead us through tough times. The $585 billion stimulus program seems to be working, at least from an outsider’s standpoint. But the scene behind closed doors is not half as encouraging as it repeatedly makes out to be.

The domestic lending activity has been largely driven by government fixed-assets spending, banks’ lending activity has surged to a record high but much of the funds have been redirected to stock speculation instead of spending on consumer products to stimulate demand. Some of them have gone into the so-called zombie projects, and the rest of the green initiatives will probably take years to produce notable results. The problem is, there is still very little consumption in the domestic domain. As the current economic conditions continue to deteriorate, exports will count less and less and more and more of China’s growth potential will have to come from household consumption. So unless there’s some miraculous demand for Chinese goods from elsewhere, the investment-led growth model will soon start to take its toll.

Over the past decade, China has been spending a great deal on buying commodities in order to fuel demand for industrial consumption. Now a great proportion of it seems to go into building strategic reserves rather than putting into production. This is expected when the global downturn has resulted in much idle capacity due to less demand. The buying spree stimulated by the government has the effect of inducing construction and resources industries to bet on a rise in commodity prices, which is highly unlikely when the global economy is stuck in the middle of nowhere. The recent debacle with Australia and China’s latest agreement on a 30% iron ore cut suggest that the world’s biggest commodity consumer has probably reached a tipping point where the action of piling-up for supplies will slow dramatically in the next year, if not the 2nd half of this year.

News coming out this week with regard to china 2nd Quarter GDP and a few more earning reports from the major investment banks might feed the uptight market with a moderate amount of complacency. As a result, we will probably have a short-term rally in the market, but that’s it, the excitement will abate quickly and, very soon people will realize that China and the banks can only do so much to reassure the world. What happens in the U.S in the later half of this year will be crucial to the global recovery.

Until then, try to resist the temptation of jumping on the market recovery wagon and instead wait for more clarity from the C and U.

Out of the frying pan into the fire

2009-07-12T04:57:00.000-07:00

The UN officials are starting to sound like a broken record as they, for the millionth time, repeat the same old" current crisis bears the best opportunity to address climate change" cliché. Oh Yes everyone got the message a long time ago but please reiterate that to the powers that be, because it now seems all good intentions have been trapped in the game of politics.

Granted, the U.S climate change bill passed last week will go a long way towards contributing to the success of setting out unambiguous new goals for carbon reductions at the upcoming Copenhagen conference. The revised emission targets put forth by the Obama administration, albeit extremely un-challenging, sends a strong signal to the world’s biggest polluters the U.S has officially committed to the long-term objective of building a low-carbon economy.

We should expect something like this will inject a greater sense of urgency into the environmental agenda of developed nations such as Canada and Australia, who already have tools in place to revamp their current systems but who have been reluctant to commit due to the lack of clear signs of leadership from the world biggest economy.

Here’s where things turn political. One of the clauses included in the bill stipulates that the U.S should impose tariffs on goods imported from countries that do not have control or have not made the effort in reducing their carbon emissions by 2020.

Which begs the question: what exactly constitutes making the effort? If by making an effort they mean setting half-hearted targets which barely have any material impact over a greater period of time, then almost every government could easily stitch up objectives and vowed for reducing emissions of 20% by 2050, and only to get away with it when whatever binding protocol in use expires. The argument becomes even thinner as the advocator itself has taken on less responsibility than it should have when it owes the world more than what it has contributed in the past 100 years.

I feel that the notion of “common but differentiated responsibility” in tackling climate change, when put in a recessionary context, has somewhat turned against the developed nations as a result of carbon investment costs adding to their ever increasing budget deficits.

In the face of the already happening climate change, a concerted effort is required between developed and developing economies, the latter of which can not magically transform themselves overnight into carbon-free mode without transfer of technologies and financial assistance offered by the advanced economies. It’s sad to see the U.S is not only doing the exact opposite of helping, it is also letting its protectionist tendency seep into the already fragile relationships with its little brothers.

I also feel that most parts of the world are holding Cap and Trade system as the Holy Grail and are not giving enough attention to adapting to the what –has-been-and-done. I am not smart enough to question the effectiveness of Cap and Trade, but then again I never bothered questioning the validly of the scientific modeling which has never failed to give warnings of such and such about climate change that make every day sound like a doomsday. My doubts aside, if the majority is willing to stick with the Armageddon theory and believe Cap and Trade is currently the best way to go, then an average Joe like me better be able to go along with it.

But even from an outsider point of view, the shortcomings of such a sophisticated trading system are still patently obvious.

One of the worries for the implementation of such a scheme is the assumption that a lack of coordination on a global scale causes carbon leakage, a term used to describe the outflow of workforce/resources from a country with more stringent emissions standards to one with lax regulations. The issue touches on a sore point especially in times like this.

The allocation of permits to pollute is extremely complex and thus a lot of compromises have to be made and strings to be pulled. Industries with the best teams of lobbyists and the deepest pockets usually get preferential treatment regardless of what rationale the government may come up with for justifying its biased stance afterwards.

The establishment of a Cap and Trade system is equivalent of building a stock market, except the commodity in question is CO2. If a scheme resembles a market, inevitably there will be arbitrage and traders whose actions have no bearings on reducing greenhouse emissions.

To regulate such a market is also a challenge: given that we have not long ago just witnessed a spectacular burst of the economic bubble, I may be justified in worrying our government’s ability to maintain a healthy trading environment. I bet hedge funds are already contemplating on taking a trip to the newly established field of wealth.

Talk about out of the financial crisis into another.

Yuan, The beginning of a new era.

2009-07-09T20:16:00.000-07:00

The rebuild of a post-crisis world calls for a new leader, and China is likely to be the best candidate. Now, our incoming king has an imminent task: diffuse the 2 trillion ticking time bombs that are the legacies of the former king.

China came onto the diversification scene a little too late. Perhaps it is the inherent prudence that’s coded into the strand of our DNA; the average Chinese never feels comfortable truly indulging himself and will always set aside enough money for a rainy day.

Whilst a consortium of advanced economies went on an extravagant shopping spree for cheap deals when the economy was booming, China was too busy amassing its wealth through exports and manufacturing. The get-rich-quick scheme obviously worked: but at what cost?

Just when the world’s richest nation suddenly found itself on the verge of bankruptcy and reacted by issuing more debts to sustain the ailing economy, the world’s biggest holder of Treasury bond suddenly found itself staring at a mountain of rapidly depreciating assets denominated in the U.S dollar.

China, along with other creditors, has every right to question every move taken by the U.S government. The percentage of U.S dollar denominated assets are now accounting for about 50% of the annual GDP that even a single drop in basis point will result in a loss of millions.

Thus the reaction from China to a massive influx of cash flooded into the economy is highly predictable.

Ever since the roll-out of the first stimulus package by the Obama administration, there have been strings of bilateral talks between China and the U.S regarding dollar’s stability, each time has brought a profound impact on the currency market.

In May, China shocked the world by proposing a new global reserve currency, its concern on dollar losing stability was echoed unanimously by BRIC nations(the four major emerging economies: Brazil, Russia, India, China) and most of the developed economies. The market reacted by sending the dollar to a record low.

China changed its tune in June by announcing its unambiguous support for the U.S dollar; BRIC continued to stresses the importance of a stable U.S currency.

In July, China quietly launched a pilot program allowing Yuan to be traded as regional currency. The program was welcomed by Brazil, Russia, and the East-South Asian economies, which have all recently completed deals in local currency with China.

Just ahead of the G8 meeting, China brought up again the debate on new global currency and the use of Special Drawing Rights issued by IMF.

China’s seemingly uncoordinated actions have sent mixed signals to the market. One can’t help but wonder what’s next?

China’s proposition for a new global currency reserve is not only a legitimate enquiry into the U.S government’s ability to maintain dollar’s stability; it can also be viewed as the country’s tentative attempt at testing market reaction to the greenback’s alternative. The proposal of SDRs (Special Drawing Rights) as a dollar substitute was rather absurd, for an artificial reserve asset issued by IMF, SDRs is a basket of currencies consisting of Yen, Pound, Euro and the U.S dollar. Given the rapidly deteriorating economic conditions of the currency holders, SDRs have no backbones and perhaps even more vulnerable than the dollar.

Logically speaking, it was never in the best interest of the Treasury bond holder to temper with the reserve currency in which their debts are trade, China has the most at stake and only stands to loss in the face of a deprecating dollar. The market needed reassurance and it had to come from China.

Days later, it did just that by subsequently pledging unquestionable support for the dollar and stating no other alternative in the short –term. On the surface, a lot of actions didn’t make a lot of sense: China single-handedly lit the fire from the beginning and put it out soon afterwards. All this effort seemed to have gone to waste. However, the resulting reaction from the emerging economies provided China with just enough momentum to take the next big step.

BRIC nations reacted most positively to the idea of a new global reserve currency, so did most of the South East Asian economies. The event provides a solid foundation for rolling out a super regional currency and the development is already underway: the loosening of the state control on foreign investments, the launch of the first Yuan-denominated bond, the increasing activity of foreign exchange settlements in Yuan with developing countries, all of this signify China’s push for Yuan as the dollar continues to lose ground in Asia.

Granted, the role of U.S dollar will still be irreplaceable in many years to come, but that doesn’t stop China from promoting Yuan’s status as the region’s currency of trade. It only remains a matter of time before Yuan takes the rein as the new global reserve currency.

A welcome change in Private Equity

2009-07-04T05:29:00.000-07:00

I had a déjà vu when I first heard about the first Yuan-denominated Private Equity fund is to be launched this year in China. It’s been a long time after all.

Can Private Equity make a modest comeback in 2009? I don’t know. But I certainty miss those rich bastards.

There was a time when stocks were rising, banks were generous, investors were audacious and PE firms were everywhere. And that was year 2007.

During the Renaissance era of abundant liquidity, the investment cycle for Private Equity was much shorter. Thanks to the Wall Street forks, who made the term “alternative asset” sound so much sexier than anything else in the world, buyout deals were often initiated and completed in lightening speed. Wealthy individuals who expressed interest had to wait in line in order to get a taste of what’s like to outperform the general market, and names like Kohlberg Kravis, Henry Kravis, Steve Schwartzman simply conjured up a God-like image to the average investors. It became so fashionable even the Chinese government threw in a good 3 billion investing in the King of PE - The Blackstone Group.

That was then and this is now.

Nowadays cheap credit is hard to come by. Just look at Europe for example. Even with the 55billion Euro the Central bank pumped into the market, banks are still on the fence about passing on the savings to the public, let alone finance a billion-dollar buyout deal. But who can blame them? Some of the banks have enough problems in their balance sheets which actually bear a strong resemblance to that of Lehman Brothers.

The concept of Leverage-buyout is easy to grasp, PE firms borrow money to buy underperformed companies and delist them from the stock exchange, give them a management makeover for value realization and float them back on the market for better returns.

However, without strong support from the lenders, it’s unlikely many of big names will still have the means to pull off a multi-billion global deal like before. What’s even more irritating is that they are missing out on an once-in-a-lifetime buying opportunity.

The market is now simply too tempting to let up: the historical low interest rate has somehow brought back cheap debts, the stimulus program might suggest a resurgence of liquidity, and there are also so many undervalued stocks floating around in the market right now.

Are they really running out of cash?

Not really. Although it’s extremely challenging to keep alive their protégés whose structured advantage has been drastically undermined by rising borrowing costs, most of the reputable PE firms are far from getting hammered by margin calls or even finding themselves short of ammunition.

Proof? A survey conducted by Pitcchbook indicates “the decrease in private equity investment is not due to a lack of available capital, which remains at an all time high of $400 billion. PE investors continue to raise capital and currently have enough dry powder to more than support the combined deal activity of 2004, 2005 and 2006 with the use of moderate leverage”

Then why such a low level of buyout activity?

Because market adjusts, so do the players. PE firms nowadays are more interested in building a market portfolio of little amount of debt and large amount of equity, they are now more focused on leveraging their strengths rather than leveraging through debt: PE firms always have a way to turn a company around through efficient management and streamlined operation.

It might take much longer to arrive at returns and profits might be less that what they used to, but at the very least, it’s healthier moving forward this way.

Then again, greed still dictates how we act.

Some banks are good

2009-07-02T22:13:00.000-07:00

How some of the U.S banks managed to regain lost ground in just over a year never ceases to impress me.

The trouble brought out by Lehman Brothers last August signaled the start of the biggest financial crisis in 70 years. Almost at the same time Wall Street bigshots handed down the reputation as the million-dollar factory and instead were quickly pegged as the culprits of all evil, the general public, from whom they had taken loads of money, were needless to say, furious.

No sooner than the Invincible Hand had a chance to take effect, the U.S government had already jumped in with a dazzling array of meddling tools in the hope to chock off the first sign of the economic slowdown.

Bu even ffter all the rate cuts, nationalization, liquidity pump, the U.S economy was still on a downward spiral, as more and more major economies joined the bandwagon for a freefalling, public confidence was shot to pieces, investors from all around the world acted like rabbits in the headlights, and the result of which rendered major financial institutions almost on the verge of bankruptcy.

U.S Government then adopted a more unconventional method: The TARP plan, which allowed banks to borrow funds at exceptional low interest rates and pay them back later, which seemed to be working.

This soon was reinforced by the so-called stress test which assessed the financial strength of the major banks based on tier 1 capital ratio and such. Although anyone can see it was really not so much of a test as most candidates managed to pass it easily, but more of a shot of much-needed assurance for the benefit of the uptight investors. Regardless, things did improve, at least in the short-term.

Now we see some of the more balanced banks like Goldman Sachs, Morgan Stanley and JP Morgan started to pay back some or all of their debts to the government so the CEOs are once again free from the rules imposed especially on their remuneration packages. Remember the luxurious yacht you once had your eye on but which was kept away from you because of certain restrictions? Now go for it.

Joking aside, the reason why some but not all of the banks managed to make it from the top to the bottom and then rise up again is not just luck. Banks certainly had their tough days, Goldman Sachs and Morgan Stanley were at one time so desperate for cash inflows that they had to throw away the crown and convert themselves into deposit-taking institutions just like every other main street banks.

They however learned the lesson well: everyone by then realized they had to detach themselves from toxic assets but not everyone was capable of doing this, some were too deep into the abyss, such as Citigroup, some were too ambitious, such as UBS, and some just plain hopeless, such as Merrill Lynch. The fact the Goldman Sachs was among the fastest financial institution recovering from the crisis was not only due to its relatively small exposure to the leveraged income market, a fundamentally sound management also helped a lot in restoring confidence.

The Fed did not just hand out emergency funds with no strings attached, in order to break free from the onerous rules governing their remuneration packages, all of the banks acted with a greater sense of urgency in the hope to repay the debt as quickly as possible.

The game of leverage already cost them an arm and a leg and the field is now deserted. The good thing is that there has been an obvious trend towards more traditional investment banking services. Indeed, sticking to the well tested and tried is your best bet and your only option in this climate. As more and more companies rush into the stock market for fund-raising, there seems to be a silver lining for the better-positioned and the well-diversified to recoup previous losses resulted from subprime exposure. Did I just hear Goldman Sachs is set to become the lead underwriter this year?

And where do they still get so much business from? Where else but China?

Le roi de la pop

2009-06-25T18:26:00.000-07:00

“In a world filled with hate, we must still dare to hope. In a world filled with anger, we must still dare to comfort. In a world filled with despair, we must still dare to dream. And in a world filled with distrust, we must still dare to believe.”

- Michael Jackson

Bad things happen to good people

2009-02-28T06:31:00.000-08:00

Aujourd'hui ,J'ai trouvé un rat dans ma maison. Je suis en train de chercher des moyens pour le tuer. J'ai pensé à un empoisonnement, mais l'odeur de cadavre sera un problème si elle meurt infondée dans la maison. Puis j'ai pensé à utiliser la souris piège, mais mon expérience me dit que ça ne fonctionnera pas. À cette heure, je crains d'aller à la cuisine avec mes pieds nus, Je pense que je vais le tuer avec ma pantoufle.Que pensez-vous?

Human Absurdity

2009-02-25T04:48:00.000-08:00

I now recount a true story I read on the Internet

Nanjing, China
A man came to the aid of an old woman when he saw her fall off the bus.
He escorted her to an hospital where he paid the admission for her diagnosis.
The guy walked away after knowing that she was in good hands.
Then the story took an ironic turn;
He was accused of injuring the old woman and forced to defend himself against the allegation.
Which side are you on, who do you believe was telling the truth?
All that did not matter, because only the Judge has the final say.
The verdict:
The defendant negligent.
The plaintiff suffered a permanent injury.
The plaintiff was awarded a compensation of RMB 44000.
But I cringe even more when I read this:
According to the Judge,
If the defendant was not guilty, he would not have run off to help the plaintiff in a heartbeat,
he was rendered guilty even more for paying the fee, despite she had no cash on hand at the time of admission.

The trial reminds me of Albert Camus's L'Etranger, only ten times more absurd.

This is a placeholder

2009-02-22T03:55:00.000-08:00

I have been wrestling with the lazy self on the idea of whether I should do a regular blog update, and the verdict: at least once every week, an objective which is really not at all hard to achieve. Let's see!

Films I Like 2008

2009-02-08T01:14:00.000-08:00

上一年看了不少好片，现在总结几部：

Caché (2005) - Hidden

探讨人性的责任感和付罪感的法国电影，导演是以善长刻画心里暴力出名的奥地利的Michael Haneke(The Piano Teacher),尽管有法国最有名的男女影星Juliette Binoche和Daniel Auteuil出演，Cache确丝毫不流于俗套。片里用了很多长镜头，很考验观察力确又含有让你不得不看下去的张力感。整片很少有血腥恐怖镜头，可以看成是一般的叙事片，但其中的某些镜头将会让你一生难忘。Caché，一部比Eyes Wide Shut更残酷的人性剖析，以至于看Haneke的片，一定要有颗健康的心脏。

Angel-A (2005)

Luc Besson为数不多的情感片，黑白色的巴黎，有点神话的爱情故事，女主角很美，值得一看

Je vais bien, ne t'en fais pas (2006) - Don't Worry, I Am Fine

讲诉姐姐度假回来，发现弟弟离家出走然后寻找他的故事，并在找寻途中发现了事情的真相和家里隐藏的秘密。这部片从开头20几分种的平淡得让我快睡着的描述到后来的一个小时内不断地高潮迭起到最后感动得我不得不把此片永久收藏的经历，证明了Kad Merad 无愧与当年的 Meilleur acteur dans un second rôle。一颗由父爱打造的脆泪弹。

Les Femmes de l'ombre (2008) - Female Agents

这不是一部普通的二战片，这是一部充满女性柔情和英雄主义色彩的电影。由历史事件改遍，4位不同背景的女兵刺杀德军司令的说烂了的故事，因此剧情之起伏和演员的出色表演很容易就让这部片从一大堆纳粹片中脱颖而出。

Il y a longtemps que je t'aime (2008) - I've Loved You So Long

金球奖提名影片，以姐妹的友情为主线，讲诉了一位杀了儿子的母亲从新被社会接受的故事，非常感人，其中一个场景的口琴音乐A+.

Funny Games (1997)

又是一部Michael Haneke的作品，保持他一贯的心里折磨手法，虽然是其早期作品，但是是最让我难让人接受的一部，全片几乎没有血腥镜头，看完后给我感觉是，我宁愿再看SAW系列100遍，这辈子也不会再回顾这部电影。此片讲的是一家三口在度假间遇到两位彬彬有礼的白衣青年，谁知引狼入室。。。。和 Hostel这类的被好莱坞炒烂的俗套不同，精神上的暴力才是比视觉刺激更受Haneke推崇的表现手法。这是最好的恐怖电影，也是最让人抓狂的一部。德语97年原版和08年由Naomi Watts主演的是Word for Word完全相同的Version，只是英文版的恐怖感不知怎么好象弱了一点。

Die Welle (2008) - The Wave

带着Dead Poet Society和Battle Royale的元素，这是一部谈讨法西斯体质，并借由一个班级一周内的惊骇转变让人们认识到现今的青少年的一种找不到归属感的脆弱的心里壯态.对与一个从最黑暗的时代里走出来的国家，德国人敢于直面历史这一点，是任何其他国家都无法相比的。Die Welle是一部值得一看的OSCAR级影片，落选可能只因为Der Baadar Meinhof Komplex太出色了。

Back to China...

2009-01-25T06:19:00.000-08:00

Chinese New Year's Eve, fireworks, noises, to lazy to update, happy 牛 year!

Pourquoi Pas?

2008-12-11T06:33:00.000-08:00

Jogging is awesome

2008-12-08T06:05:00.000-08:00

Recently I have committed myself to a weekly regiment --- Jogging.

I started out with great reluctance and right now I am addicted to it! Jogging is really the most therapeutic exercise you can do without costing a dime, not to mention the obvious physical benefits that come with it. I run every other day and two weeks in I can already see a noticeable difference in the glowing appearance of my skin, I think that my respiratory problem due to pollen allergy has also alleviated because of it.

As I gradually phase myself out of swimming (goggles, swimsuit, too much hassle that it feels like work) I am very glad to have found a perfect substitute for my cardiovascular workout.The only downside is that my legs are still struggling to cope with this new hobby of mine,for I sometimes wake up in the morning with a deadening sensation in my feet after an excessive run. Maybe I shouldn’t overdo it until after the period of readjustment is over.

Running on a treadmill is nothing like running in the street, on the sidewalk, around the neighborhood. While in the gym I have the comfort of watching TV, out there I have the beautiful view of night that I have just come to appreciate: the flowing stream of cars, the colossal of Italian restaurants filled with late-night coffee drinkers, the convenient store with a festive decoration, the gigantic inflatable Santa sitting on the roof of a sportswear factory, the wandering backpackers, the drunkards outside the pub, the bums on the street…Two hours before midnight on a Monday evening and the street was still beaming with life.

My thirty minutes of non-stop jogging came to an end as I slowed down to gather my breath; I walked past a cemetery and slowly made my way back home.

My IPod's battery was dying, I then made a random pick in the dark for the final song of the night and I heard “Lately”, a song for which I developed a temporary affinity and soon abandoned. I must be a nostalgic person: I kept David Gray's ablum in my Ipod for two years even though I’d long ceased listening to it. For this I became slightly annoyed by the fact the unnecessaries take up too much of my space, I got home and deleted it and a bunch of others.

There are things made only to be tossed away when they have run their course, no matter how attached I am to them. I simply need new excitement to keep going.

Paris and feeling alive

2008-11-21T02:36:00.000-08:00

I have something to say about a film I’ve watched recently. It’s called Paris Je t’aime(Paris I love you).

It’s a film made up of 18 short films, each of which told in its respective Parisian arrondissements. The film has its appealing moments as well as disappointments. I was first drawn to watch purely for the sake of Natalie Portman, she guest starred in the scene as the lover of a blind artist, a scene which, among others, turned out to be very mediocre. The same thing can be said for Elijah Wood’s Vampire scene in Quarter Latin and Julie Binoche’s role as a helpless mother. These stories with big movie stars are the biggest letdowns, for they do not seem to be to be in tune with the general storyline of the movie( yes, there is one).

I was, however, very much impressed by some of the other stories told by unknown actors. The first short film with the lonely taxi driver, his monologue has a stroke of genuineity. The scene where father and daughter chat as the two walk down the street at night can make your heart warm and sad at the same time, the last story narrated by a American middle-age woman about her new life in Paris ends the entire movie on a perfect note.

However unorthodox it is to compare a motion picture with a book, I just can’t resist the temptation to put the film under the same microscope with James Joyce’s masterpiece –Dubliners, which the film strongly resembles. The exception being that the latter is much more diverse due to its more contemporary settings, and also with a much brighter atmosphere in which the stories were told. It will be presumptuous of me to put side by side the ending of the film with that of Dubliners, for it lacks much philosophical depth and therefore nowhere near being a thought-provoking piece like The Dead. But the last 5 minutes of the film struck me as something so simple yet so true:

As the character quietly sits on a bench in the park, eating her sandwich and watching the passers go by. She comes to an epiphany, an epiphany of a middle-age woman’s ordinary life spoken in her anglicized French, an epiphany which only people living on a foreign land can comprehend, which Joyce must have experienced in his expatriate years but never put into words. She said and I quote (roughly):

Peut être c'etais quelque chose que J'avais oublié, ou quelque chose qui ma manque toute ma vie. j’ai senti au même temps, la joyeux et la triste ,mais pas trop triste, parce que je m’ai senti vivant, oui, vivant, ça c'etais au moment, que j’ai commence à aime Paris, et le moment que J’ai senti que Paris m’amie aussi.

Vivant,yes, alive !

Trailer: http://au.youtube.com/watch?v=nSZOGywlhzE

Mr. Procrastinate

2008-11-20T20:43:00.001-08:00

I have a bad habit of putting things off.

For example, almost a week has passed since I came back from holidaying in Gold Coast; I sorted out the photos I promised to upload long ago but I am still yet to post them onto the blog. Actually I am not sure it would be a good idea to inundate my private space (that is this blog) with hundreds of photos which I only submit in the hope of silencing my anxiously-anticipating parents who are dying to see their son dressed in shorts…. Well that is one morbid image……. Anyway photos will be uploaded tomorrow….ish. Whenever Mr. Procrastinate feels right…

A rant

2008-11-20T20:23:00.001-08:00

I am very very disappointed in my university administration.

I was in desperate need of a Statement of Qualifications so Monday morning I went to uni admin and requested a copy. Usually it takes 3 days to process and another 2 days to get to me by mail. I thought it wouldn’t hurt to wait another week so I waited. Thursday I called to ask if I could come and pick it up in person, a female staff told me that I can’t it’s the rule and they posted it out 2 days ago, so with a little indignation I again accepted the fact and continued to wait, this morning when I called to confirm, some guy ironically suggested I should have come to pick it up days ago because the statement had just been mailed out THIS morning, I explained that his incompetent colleague told me otherwise,

” well, she’s wrong” said he;

“So what if the letter gets lost in the mail?”

“That is not our responsibility.” said he indifferently

“But…don’t you have more than one copy made?”

“Look, we explicitly required 3-4 days to process, if you can’t wait there’s nothing I can do” his tone turned sarcastic.

This should teach me a lesson not to trust one person’s word and always ask for confirmation.

The end of an era

2008-11-03T22:22:00.000-08:00

A chronicle of my understanding towards western music

Boy band era
This is where it all started

Rock era
My impression, at that time towards the Rock genre, was consisted only by heavy drums, explosive guitar and random screaming to death. I was highly skeptical about giving it a try for the sake of maintaining the proper function of my ears. Rock’n’roll music in China, was suffering (and still is)from a mistaken status not welcomed by mainstream audience. In order to rectify my hostility, a friend cunningly recommended me(The UnforgivenII) , one of a few ballads sung by Metallica. I fell in love with James’ voice instantly, it disarmed me in a way I could never imagine rock music could. And then it’s the classic by REM, which taught me music is not limited to love or be loved. My subsequent encounters with a great bunch of rock ballads precipitated the process of my transformation. The pivotal point came, however, in the summer of 2001. It was a typical lazy Sunday afternoon, while searching for Usher’s new album—8701, (how ironic!!). I was lucky enough to be taken in the hands of an American rock band who practically served as a shepherd to my great journey of rock and roll. And they are, you guessed it, Linkin Park, to this day I can still recall the absolute state of excitement upon hearing their music, and it was something vastly different and pioneering. The subsequent event of music video viewing only in my mind reinforced their Godlike image.

At that time western music was a scarcity. Rock music, due to its explicit content, was especially hard to come by. The only way we could get our hands on their albums was through some black markets that smuggled imported CDs. We ended up spending many a happy hour there. There were countless times when we stuck out of classes to buy pirated CDs. The delirium when came upon some rare bootlegs of my favorite bands and for the first time laid hands on them was almost worth more than the listening experience.

Internet in China, albeit still in an infantile stage, offered me an outlet through which I was able to freely express my opinions as well as download the latest music. I used to frequent a music forum which stored an impressive amount of music source; the members on the forum were invaluable in widening my eyes to other types of rock music and made my transition more enjoyable. From them I picked up here and there a little bit of everything about different kinds of music, and of course everything that came along with it, movies, cultures. My knowledge in western music had blossomed exponentially.

Post-rock era
After years of listening to mainstream music, I again grew tired of the old and craved for the new. I no longer contented with listening to bands copying catchy tones, venting teenager anger and expressing laughable political opinions. I decided to go minimalist. And I found Post-Rock., a genre in which vocals only play a secondary role. It was love at first sight. The music highly emotive and utterly beautiful, the fact I could never make sense of their written words, the names of their albums, the title of the tracks, only left so much space for my imagination. Mogwai, Arab Strap, Craig Armstrong. Scotland never sounded so lonely.

The return of the Rock era
I snapped out of the Post-Rock melancholy as it was not in my nature to be sad all the time. I jumped right back to rock and roll, only this time my music taste grew more promiscuous. I reacquainted with one of my favorite band Radiohead and proceeded in completing my previously-unfinished collection of the band’s music; I fell in love with the creative and ever so miserable Robert Smith of The Cure, the notoriously diversified Nine Inch Nails, the best alternative rock band Tool and protégé A Perfect Cycle, the charismatic Billy Joel, David Bowie, the list went on and on. Music genre gradually became something of an unnecessary cliché.

The end of an era
As we march onto a new stage of life, our set of priories inevitably changes. Nowadays I am less and less concerned with what go into my ears, and more and more indifferent to the thought of having something nice to listen to. I find myself going back to Frank Sinatra, Elvis Costello, Marvin Gaye, and occasionally U2; I’ve become something of an old-school. I’ve acquired a wealth of knowledge in western music unrivaled by the average listener; my taste has grown more varied and possibly more refined. Only that eager teenager who once shelled out twice the price to buy a CD is now just a distant memory.

Psychology is a new religion in disguise

2008-10-31T07:18:00.000-07:00

心理分析(Psychoanalysis),做为心理学的一门分支,对于无神论者(Atheist)有不可忽视的作用.
首先,我觉得宗教的影响力很大程度上在与其语言上的高明程度.从文学角度上,圣经给我感觉确实能算是人类语言精粹加哲学观点用到极制,也难怪对于虔诚教徒来讲,我们这些没有信仰,科学至上的脑袋首先在辩论上就已输了一大截.那么,作为一个无神论者,在这一精神领域上的缺乏,思想和观念找不到正确的方法表达的时侯,我们能做的,除了等待有召一日被其中一种宗教感化之外,还有没有别的选择?

Psychoanalysis,心理分析学,我认为是第一个系统性的研究并怀疑宗教的学科. 也难怪当佛洛伊德(Sigmund Freud)的理伦100年前刚问世时引起很大争论.你基本上可以这样认为,心理学家这们职业对宗教,如果不是抵触,至少会是很怀疑的态度.
无神论者从心理学开始出发:
你不会再遇到找不到词汇来描述自己的观点的情况,心理分析学其实就是用语言来主导思想的艺术.
它可以很大程度扩展你对精神呈面上的包容性和围持你现有的观点,我觉得心理分析学,可以大略(loosely)的看作是无神论者的宗教.

我不推荐完全否任宗教,相反,我觉得宗教是,在现今以科学占绝对统领性的时代里的一样必需品.Psychoanalysis也同样做不到完全正确.比如佛洛伊德对宗教的看法在道德观念上就很不合我胃口.我们会被一个理论说服,,可能是因为,只要道德上不充突,其语言的言密性和罗缉性很大程度上就占了主要因素.

我能马上想到的对基督教,更具体来讲,对上帝的好与坏的评论,是Carl Jung的--Answer to Job,这是一篇写给他的基督教牧师朋友的信,这篇文章不长,但当年的轰动和引发的反对声是可想而知的,也是我读过的Jung的一次最主观的对神的道德观念的探讨.我相信这篇文章里他对上帝的绝对公正性, 和通过Job这个人物对造世主的善与恶的见解,会让你,或是认何无神论者深感兴趣

对看不到摸不到的东西,我们的脑袋总是第一时间问到:"有没有科学根据?" ,可惜的是这个时代科学还没万能到甚么都可以解释的地步.有人说,科学和宗教两条平行线,是真的.既然没有交集,就不应该指望一方可以说服另一方.

"我不知XXX存不存在,但你又怎么能肯定它没有呢?"这句话可能是宗教辩护立场时的最后抵抗(The Last Resort),这正是宗教在论点上的对科学不是万能的讽刺,我们听来觉得不思议,,但就像被问到":你觉得UFO是真还是假".谁也不能给出肯定答案(至少在目前看来).

PSYCHOANALYSIS的不确定性的存在,我认为, 正是为了调合宗教和科学的矛盾.我们常听说心理学家的所畏理论只是一大堆废话,但对另一部分从心理分析或益的人来说又是另一番截然不同的言论.然而,从来不会有人能用严格的科学统计方法证明其有效性(Psychoanalysis,我感觉,深受为物主义时代的影响,可以查觉到它那想以科学的方法证明其有效性的倾向,比如典型的由Wilhelm Reich提出的Orgone Energy,最后被爱因斯坦证明无效. 然而,作为一门以哲学为核心发展起来的语言艺术,不可能牵强的与科学挂钩.) 而心理分析,虽然不能严格落入科学的领域,确也不被归类为宗教的分支.相反,它对后者持有的更是否定的态度.看来,这个世界从来不是非科学既宗教的.

Psychoanalysis,做为一个第三者的眼光,可以让你知道为甚么宗教有存在的必要,它与科学的矛盾性,更重要的是,它对人心理分析的精辟可以让你肯深入的了解自己,从而不会轻易受到外界观点的左右而导致内心上的冲突,在我看来, 他和宗教有很大的相似性, 它的成功, 就在于第三方的立场不可以用科学轻易否决,也不在宗教的归类里, 心理学, 是披着科学的外亿宣传自己的宗教(I.e.: to help achieve a better self),它因该做为无神论者的信仰.

有人说,现今的宗教,特别是西方教派,偏离了本质.PSYCHOANALYSIS没有以一种至高无上的态度否定宗教的存在,相反的,对于宗教偏离本质而成为政制工具的看法,CARL JUNG,做为心理分析学的开拓者,在他的著作中早已提了出来. 所以,他不但没有象Sigmund Freud那样把宗教做为人心理的一种疾病来看,他把宗教当成人类不可缺少的组成, 他的背景决定了基督教不可避免的成为他的主要批判对象, 然而, Jung的举动被人误解成对基督教的偏见,后而他的本意 ,是不希望这个社会出现消极的接受一种信仰的态度(Passive adoption of an established belief), ,或是,冒险的接受某种偏离了本质的信仰.

简单的说,当我第一次下笔写关于宗教,我就知道我要踏入这个雷区,当我把这们只有100多年历史的学科和圣经比,我本意是想说,PSYCHOANALYSIS不是很多人认为的只是心理研究,它也可以很哲学化. 在我看来,人是最容易被精妙的语言和不知道的东西左右思想.我不得不承认,圣经,虽然我没看全,但它对哲理,文字上修养达到了很高的地步,而PSYCHOANALYSIS,特别是对其的论征里,也采用了类似方法达到可以给无神论者的观点带来支持的效果.而这正是无神论者缺乏的能抵御外界言论的依剧.它解决了有话想说却又无语表达的窘境.或许我不该把它夸大到做为一种信仰.可能更合适的词会是" 一种无神论者表达自我而不会让有宗教信仰的人听起来显得空洞的工具.

既然科学,宗教(,如果可能也加上心理学, )被我看成三条平行线而共存,而唯独科学越来越占据统制地位,原因可能就是我们生活的时代被当成一个由科学推动发展而成就的时代,但当人们还不知道科学一词的时侯,会不会推动人们精神发展的,是现在人眼中的宗教迷信?

如果说科学是人类进化的终极,那其他各种无法科学角度上解答的事物,比如道德观的型成,人与人的关系,人格为何不会被"无法提供有力的科学数剧 (Scientifically Unverifiable)全盘否认了? 有人可能会给出达尔文的进化论来解释一切,但我不确定达尔文,在当时,或是现今的他的拥护者,他们对人类心理的想法,对人类的潜意识(The Unconscious) , 会有多少了解? (注:我是相信进化论的.)

因此,For the benefit of the doubt(实在找不到合适的中文句子了),我们人类的观念,在不阻碍社会发展的同时,在道德伦理允许的范围内, 会不会更得益于用包容的眼光看待一切? 当无神论者, 由于表达与宗教相左的观点而被教徒默默地烙上一个善与恶的标签时, 或是当我们被指责对个人信仰自由的不尊重的同时,会不会反过来也一样?---无神论者的无神信仰是不是也应该得到尊重?

Oedipus Complex and Hypnosis

2008-10-25T04:55:00.001-07:00

George Frankl’s book (Exploring the Unconscious), has provided me with great insights into how Freud’s notoriously famous sexuality theory operates in a psychoanalytical setting, I especially enjoy the two fascinating real-life stories with which the author has chosen to illustrate his point of view.

The central theme of the book goes about how hypnotizing can be employed as an effective tool to explore the unconscious. I must say that, Even though I’ve heard anecdotes about numerous hypnosis experiments being conducted on neurotic patients as well as the amazing results it produced, I still remain skeptical about it. The word seems to me mystical, if not magical, and I don’t think I can be convinced of its validity until I’ve a chance to experience it myself.

Fortunately, my lack of knowledge on the subject didn’t in the least stop me from enjoying the book to its fullest. The use of plain English and clarity in explanation make it quite simply the best introduction to Oedipus Complex in psychoanalytical practice. The two cases of psychotic patients, albeit erotic in nature (but then again, in the eye of a Freudian, what isn’t sexual in nature?), have successfully demonstrated the author’s hypnosis method at work..

On a less relevant note, The story about a psychotic woman who innocently masturbated her father when she was a child and was scorned by her mother, this scene instantly reminds me of the classical porn –Taboo, and another great German pornography, whose name I don’t remember, I wonder is it just me or does every man’s mind go there in the first place?

Was Taboo inspired by Oedipus Complex? I very much think so.

To thine old self be true

2008-10-18T06:00:00.002-07:00

While it seems to be that I am naturally drawn to all sorts of metropolitan elements of urban life, as opposed to a less hectic country lifestyle, I am actually that type of guy who requires an excessive amount of solitude, as I hate to be rushed at things and love to go at my own pace. In a fast-changing world this attitude may be counterproductive but many times I am at my best if given the autonomy to sort things out. In that regard others tend to draw the conclusion that I am best suited to working on my own. I don’t totally agree.

If my observations serve me well, I usually pay a lot of attention to what's going on in the outer world. I love too much about social interaction sometimes it prompts me to ask why I am trying so hard to behave this way. Why does being universally likable matter so much to me?

Now I've come to see myself as someone who defines himself primary based on opinions of other people. I am a true team player and I am proud of it, but often times I wonder does this seemingly selfless act come purely out of the goodness of heart, or I am just wearing my mask too well so to hide a selfish,unholy motive? It wasn't until I took a good look behind the curtain of my psyche that I came to see who I really am. No doubt I crave for recognition and respect from my co-workers. For appreciation makes me feel important and irreplaceable, I purposely enjoy socializing with (an unconsciously selected group of) people, whose gratitude of any kind, regardless of its magnitude, is food for me.I said a selected group because I know, at the risk of sounding snobbish, that it's not everyone whose opinions I take to heart, it's people who matter, not necessarily to me, but those who are capable of influencing the thinking of other people. (At this point I'm unable to come up with a more refined, more succinct definition of this group, in subsequent logs I will elaborate more on that). Their criticism or oblivion to my effort, make me unappreciated. All is because I place too much emphasis on their words instead of my feelings. I don’t deny I usually tend to neglect what I feel, with my turbulent self buried deep I could therefore make peace to go with the flow, which explains why I am easily swayed by the outer forces. They in turn cause me to doubt myself even at times when I know I am right. How tiring and pathetic life must be when one has to justify his every action, modify his every step to strangers!

This is why I enjoy solitude; it offers me a chance to be inwardly focused and thus able to see things from a different perspective.Over the years I have become less self-conscious, I am still a long long way to go towards being completely honest to myself. But along the journey I am coming to accept my shortcomings that I used to hate and go to great length to ignore; my perception of them has changed, they are reflective as a mirror, when I take time to tend to them, they keep me grounded.

Don’t deny what makes you human.

A dilemma solved, and then some.

2008-10-18T06:00:00.001-07:00

Finally I have decided to cancel my trip to Tasmania due to financial reasons, what a shame and what a relief! I was so looking forward to this getaway but it seems that God is only interested in seeing me in misery, and this time he decided to hit me on my softest spot ---$$$.

About a month ago my electricity bills for the past 8 months came flooding in (admittedly I have no right to complain, electricity company rendered the service and I used it, fair and square. I simply don't like the idea of having to pay a lump sum all at once, why the hell couldn't they bill me on a regular basis???) . You know when it rains, it pours, true story. Just when I made my peace and paid the dues, my stupid landlord who had disappeared for a long time came to visit with a bunch of gardening tools ready to mow the lawn of my backyard. Who was I to say no? After all we had made a pact at the time of moving in, and one of the stipulations is to keep the lawn tidy, either by him or a contractor to clean out the mess. Needless to say I was too lazy to hire or do it myself, which just worked out perfect for him, consequently I was charged for the service, at a premium! At that price I'd have my lawn trimmed and a tree planted!

The consequence of all that is my decision to withdraw from my trip to Tasmania, although I am still going to Queensland in Nov, that's for sure.

I try to understand why I can be influenced by external factors so easily and after a few days of pretend-philosophical soul-searching, I think I at least have come to terms with some dark sides of my personality. You see, even with complete awareness of the fact I am merely creating this blog in order to be true to myself, I constantly tried to find an excuse to prove that I am not as materialistic/greedy as most people when it comes to dealing with $$$. I totally know I am lying, because monetary matters actually irritate me the most. Much as I hate to admit, I am absolutely afraid to find myself in a financial crisis. Losing control over material things frightens me more than anything else in the world. (a control freak over lifeless objects?) Bills, rent are expenses incurred to provide the necessities I need. I know that since the day I was born and I am happy to pay them off, but only when I have ample amount of $$$, I can be extremely insecure if I have caused a big dent in my savings (which’s essentially non-existent at the moment). Worrying about cost of living is one thing (to which I suspect most people react the same way), being handicapped by the thought of financial insecurity is borderline madness. I regard myself as a fairly optimistic bloke( I swear, anyone who knows me in person knows I am telling the truth!), what others don't see is sometimes, when I find myself in a financial strait, I can be very pessimistic, not in a 'life is too fucked-up, suicide is the only choice" kind of way, but in a " I feel so powerless to the point I feel like I am crippled and hard to work up my enthusiasm for anything" kind of way. Can you tell me that am not pathetic?

In all fairness my materialistic shadow doesn't deserve to take all the blame. My unprepareness towards this plan most likely also contributed to my decision to withdraw. This I find it very surprising. For years I had been under the impression of myself being a practical planner, someone who only takes action when he's got a plan, someone who doesn't act on impulse. This trip I dare to say is one of the most spontaneous things I've ever done. My airfares were bought at promotional prices which were insanely cheap, (probably why I didn't have much trouble giving them up in the first place), I didn't have an itinery neither did I make any bookings online. Previously it's unthinkable of me to go to a place without through preparation; after all, I need to know I at least will have a place to stay if I am going somewhere. This so-called 'neurotic behavior' made me feel liberating? I think deep inside It wanted to get out of a rut and just be spontaneous. I am not certain this is who I really am but the thrill of irresponsibleness (‘irresponsibleness, is it even a word? well) definitely makes me feel adventurous and alive.

I still have some words to say about the reason for traveling solo, but they are silly and complicated to put into words . On top of that I think I've revealed too much already for today, maybe some other time.