Historical Moment

Dow Jones dropped by 90% after the peak during the great depression.
So far it was only down by 45%, may not be that excessive this time around.. but we still have more room to come off...

All the indicators are implying US is trending towards what Japan has experienced in their 8/90s. And Japan has not performed for almost 20 years.

Order book cutting, shipbuilding coming to a halt, trading activities slow down dramatically, capacity oversupply, freight rates are free-falling, transportation cost is not an issue anymore.
Glad that i just went to Hokkaido this summer. It would be a good time to visit EU now! Also there's speculation of AUD going down to 0.50. Many people got squeezed by the FX trades...
Guess what, AIG said they may need more than 123bn to keep the business running....well, US gov't better has a hella powerful of a money printing machine.

Getting paid?

Oct. 21 (Bloomberg) -- Wall Street had it wrong: An investment bank's most precious asset isn't the army of employees who head down the elevators each day. It's the paychecks they take with them out the door.

You can imagine the devilish grins on the faces of Morgan Stanley employees last week, after the Treasury Department said it would pump $10 billion into the bank. Not only did we, the taxpayers, save their company, with the help of a Japanese bank named Mitsubishi UFJ Financial Group Inc. More importantly, we funded their 2008 bonus pool.

Morgan Stanley has accrued $10.7 billion of employee- compensation expense this year, almost twice as much as its pretax earnings. The vast majority of this remuneration hasn't been paid yet. Now it probably will be, assuming the firm survives through next month. Meantime, Morgan Stanley's stock- market value has dropped $34.7 billion, to $21 billion, since the company's fiscal year began.

The rescue of Morgan Stanley's bonus pool is an unpleasant downside of Treasury Secretary Hank Paulson's decision to inject $250 billion of cash into U.S. banks in exchange for preferred stock. It is one thing for a company to pay much more to employees than it earns for its shareholders. It's quite another to keep doing it while receiving taxpayer bailout bucks.

Before securities firms were public companies, a brokerage in need of capital would have called on its partners to pony up. That's how it still works at private partnerships, such as law firms. The reason they don't get taxpayer rescues is they can't credibly threaten to take down the world's financial system.

Global Threats

Morgan Stanley can. So can Paulson's old firm, Goldman Sachs Group Inc., which also is getting a $10 billion infusion from Treasury. Year-to-date, Goldman has reported $11.4 billion of compensation expense, almost twice its $5.9 billion of pretax earnings. During the same span, its market capitalization has fallen $41.7 billion, to $57.7 billion.

Morgan Stanley needed Treasury's cash. Goldman didn't, but got it anyway. As long as Paulson can't think of any better ideas, the government will keep throwing money at an industry that pays too many people more than they're worth, to perform services the world has too much of already. The bright side is we avoid a global meltdown, for now.

Here's all you really need to know to see who lost and who benefited most at the Five Families of Wall Street, otherwise known as Goldman, Morgan Stanley, Merrill Lynch, Lehman Brothers and Bear Stearns. From the start of their 2004 fiscal years through yesterday, the big standalone investment banks lost about $83 billion of stock-market value. During the same period, they reported about $239 billion of employee-compensation expense.

Lined Pockets

So, for every dollar of shareholder value destroyed, the employees got paid almost three. Only a sliver of that money went to chief executives such as Goldman's Lloyd Blankfein, who got a $70.3 million package last year, and Lehman's Richard Fuld, who made $34.4 million. Morgan Stanley's John Mack, by the way, received $1.6 million for 2007.

The Five Families -- now down to just Goldman and Morgan Stanley -- weren't alone. Citigroup Inc., which is getting a $25 billion injection from Treasury, has reported $139.3 billion of compensation expense since the start of 2004, more than double its $62.8 billion of pretax earnings. Its market cap, by comparison, has declined by about $168 billion, to $82 billion.

For all the complaints about outrageous executive pay and how little Paulson is doing to curb it, a big reason why these firms have been scrounging for capital is they keep blowing huge wads of it on their rank-and-file, too. The Paulson plan will do nothing to change that.

In the interim, we continue propping up an industry that's bloated with overcapacity, because we're all too scared to let the market fix it. That's good for the people getting bonus checks at Morgan Stanley and Goldman Sachs. It's not so great for the rest of us.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=azo7aySdpFHw

Irony

I still remember that the public claim of Microsoft's notoriously grueling intervieiwng process.... to scout for the most creative thinkers from the merely brilliant. They invented challenging riddles and puzzles and identified talents who can solve questions with creative and effective analytical thinking.

But what an irony that they turn out to be not so great of a company after all, even with all the talents that they have recruited, they failed to create anything new but everything that turns out to be a failure, citing Vista and Zune as examples. They tend to be the follower instead of idea generator.. what I see is a company struggling to survive, with no killer apps in the roadmap. We'll see how Windows 7 will turn out, and I really doubt if they can gain market share in the mobile market amid Andriod and Mac are already gaining a foothold in this area...

Hot pot

Can't believe I've actually done this.....3 hotpot dinners within a week, no wonder I am starting to get a sore throat.

1st - lamb hotpot at TST, using charcoal fire which is very rare in HK now..

the lamb was excellent.. there's not much worth eating except lamb, whether you like it or not,this place is exclusive for lamb lovers.. 

2nd - homemade hotpot with lots of meat balls and seafood... 

3rd - sichuan hotpot at 滿江紅 .. sichuan people said the soup is not spicy enough..i actually witnessed the showdown of spicy lovers drowning every piece of edible food into red hot chilly soup.. I can tolerate moderate spiciness but this is quite spicy for me and I need to switch to the regular side half way through the dinner...

Sichuan girls are well-known for good skin...I am already feeling the effect of the sichuan hotpot from last night..hohoho...

JLo

Went to Justin's concert... honestly, I am not that big of a fan nor familiar with any of his songs.. he is more appealing to miu miu jai and I found people next to me seem to be all early 20s. The overall show was okay, comparing to last year this one was actually more entertaining. Obviously the worst part was him dancing, I don't care how hard he tried his choreography was kind of detached from the music and mind you the songs were not good either... I think he is very lucky to hold 4 concerts since his debut given he doesn't really have that many hit songs.... well, probably because of the poor quality of the singers nowadays he already considers as one of the best out of the bunch.

To me, the highlight is actually william so as the guest singer.. His voice is so much more powerful and mature than that of justin, and the way he sings is just effortless. The clarity and softness of his voice really blew me away.. I actually prefer to listen to his music rather than little justin. who wants to go to his concert, LET ME KNOW!

Definition of "yin"

The problem with riding is that you would feel reluctant to wear fancy outfits because most likely you will ruin it when the horse starts rubbing its face into you. I always find that the image of girls riding horses much better than men.... probably because they are more elegant and softer when riding, at the same time they look powerful and in control...Oh I wish I can wear a top hat rather than a stupid helmut..Where can I get this outfit!!!????

I couldn't resist myself from checking out this givenchy ensemble over and over again. I LOVE the oversize necklace that dramatizes the sleek black suit. Women's fashion now is turning more dark and faintly goth, the super tight leather pants and ankle boots are only suitable for size 0... the chucky necklace can only be worn by 6 ft tall giraffe.. with an exception of madonna, who will wear givenchy for her next concert.

I am not a fan of D&G and gucci but they both have very beautiful collection for the fall season this year.. albeit the 09 readytowear gives no surprises.. especially for the former who goes plaids to die.. the plaid dresses are exceptionally pretty.

It's no over yet

Don't tell me everything is okay...

That's the problem with most of the people, they only see what's happening now, without thinking about what will happen next. Looking at things from the surface wouldn't help people dodge the crisis attack, that will just make them the victim of crisis.

I've been asking others how are people in US, whether they are feeling the recession and concern about the job security, they always say so far they don't have any impact from the financial crisis and not concern about being laid off...yeah, tell me about it..no companies are going to tell their employees that they are in deep trouble, they are not making money and asking them to look for another job. They all say they are performing well and financially sound and liquidity is not a problem. But looking at the indicators, if you found ourselves counting fingers most of the time, browsing internet from the time you walk into the office, workload suddenly disappearing, unless you are waiting for the severance package you should know that ultimately companies are going to cut staff to salvage the bottom line.

I always wonder the productivity of the US firms. They say US is the most productive nation but when I look at people working in the silicon valley they don't really need to work long hours nor produce that much output per staff. I wouldn't be surprised when firms starting to go leaner in terms of labor force.

Reid said on Wednesday that "one of the individuals in the caucus today talked about a major insurance company -- a major insurance company -- one with a name that everyone knows that's on the verge of going bankrupt." Who is it going to be? Allstate, Hartford, Metlife, XL.... we are setting ourselves up for another turbulence.

As we expect there will be more hedge funds failing. No banks are willing to lend now, liquidity got dried up, the process of deleveraging is sending asset prices to go down further. We are heading towards a perfect storm as we move along with earnings announcements....

What a man

This man is HOT!!

Is it true that michael phelps plays mcswimmy in grey's anatomy??? that would be interesting..hahah

Oct 1st

Happy National Day.

My six years old ibook finally claimed death.. I have always been wanting to replace my computer since my OS is so old all the new softwares no longer support my system, and it has been having brain stroke for several times in the past... Before I find a defibrillator to jump start my antique ibook I decided to buy a netbook as a temporary transition.

I struggled between acer aspire one and asus eeepc. obviously the tech expert undoubtedly voted for asus since it is a better OEM maker. but the blue aspire one is just soo pretty. Heard that it is extremely popular in Japan.

Finally decided to go for a more rational choice, same money for a larger screen and longer battery life and a stabler platform albeit smaller HD capacity. Is the blue surface worth the extra bucks?

The netbook is perfect for traveling, it is even lighter than my marie claire magazine..

Just two weeks ago CLSA invited Mariah Carey to perform at the gala dinner. I heard that she was unhappy to see all the audience were wearing suits hence intended to sing for 30 min only.. When she first came out singing the new release touch my body I suspected 95% of audience would have never heard of the song.. see the little reaction of the people in front of me.
The crowd was finally warmed up after some oldies. What I don't understand is how slow she moved, I am not sure whether it is because of the super short skirt that she's wearing or she has osteoporosis. is it true that she is pregnant?