Hang Sheng just gone below 20,000

Will China hold up for the coming years?

It is my daily routine to check the indices around the world before bed. And, surprisingly, Heng Sheng just gone below 20,000 today (May, 14th)

Is it just a one-day event?

I recall that earlier in March some of my friends cheered for their ETF trading in Taiwan stock exchange. They invested in a fund that markets as a tracking portfolio on Hong Kong, Shanghai, and Shenzhen indices. I was "a bit" skeptical back then. "A bit" serves double meanings here: On one hand, I think there is a point that Chinese economic model still the one keeps the international economic revolving, and there is nothing wrong for them to advocate more on domestic consumption. On the other, a strong doubts in my mind and cannot be taken away: Do Chinese people really have pocket money in hands to spend (to boost the domestic consumption?)

Before we go into details, I would like to point out two things that are well-noticed: Chinese people love to save: their saving-to-GDP ratio is constantly higher than OECD countries. Yet, China has just gone through a frenzy boom in real estate. They are crazy at buying houses, and the new generation holds nothing back for luxury consumption.

So, although they might have cash, how much they left in hands to spend?

First, I would like to address the saving issue, I remember the working paper I read last year, (Hung and Qian, 2010) The author argue a few factors that led to the result of high saving rate.The four major factors are: Low old dependency ratio, strong economic growth, weak social safety net, and Asian growth model (i.e. private sectors save for the national orchestrated industrialization plan: Then the cheap funds are channeled to "national projects") In my opinion, none of these factors can predict savings to be free up for consumption. Chinese population will grow older eventually, economic growth are clouded by continuous global crisis, social safety net is yet well-built, and the Asian growth model might lead to a new bubble. People, facing so many uncertainty ahead, would more likely to save up even more than less. In that occasion, the current policy can hardly achieved.

Then, the economic growth starts to show signs of turning points. Refereed to the beginning links I attached here, reported by Bloomberg. The export is slowing, the central bankers are taking some easing measures, and they have attempts to bolster their equity markets. These are not good signs of robust economic growth.

Is Hang Sheng getting below 20,000 a one-day issue? I certainly hope so. After all, we certainly need a few robust economies to keep the global growth go on. One engine is never enough, and a few more are always better. Sadly, now we might get one failing after the other.

The reality of Austerity Plans

On Bloomberg Businessweek, The summary revealed how austerity is carried out

The first thing I see this, I would like to make an attempt to categorize them.


A. Increase revenue: Tax
1.) VAT increase: On Fuel (Greece, Italy, and heard from friends that NL is going to do the same.)
2.) Property Tax: Ireland, Greece

B. Reduction of Cost:
1.) Cut back social benefits or charge fees: such as babe benefits(Spain, Hungary), student benefits(Hungary)
2.) Cut back government employee benefits or increase their working hours: Spain, France

C. Modification of labor law:
This comes more outside of this report. Germany Labor laws are being more flexible for temporary workers, France, Bloomberg just had an article discuss why in France there are so many 49 person companies, and these countries are also modifying labor code on benefits for labor. That could consider an attempt to make hiring much easier to create jobs.


It is hard to argue which "economic measures" are suitable for the on-going situations. Yet from time to time we still see these: A township head somehow still get a bigger paycheck, the rich can always find ways to evade tax, and the "friendly measures" to help companies create jobs does not work out the way they intend to be. Yet, the cut measures are very efficient. The education and public care facilities are the first to tumble....the VAT increase make no one, the poor and the rich , to escape.

So, what Austerity means? Are the knives on the neck of the right head?

A brief visit to London

Last week, I had a trip to London-Oxford-Cambridge, several observations come to my attention.


(New Updates: Apr. 22, 2013)
Here comes an interesting News coverage of Pret a Manger on Bloomberg. For visitors to London, you might love it. ;)

ECB推出的錢要給誰？Let's go to Arena

透過歐洲央行的計劃，歐洲各大銀行可說是被灌滿資金，問題是：錢要往哪裡去？西班牙銀行跟大家說，鬥牛場上見！！

WSJ呈獻了這篇文章，告訴讀者，西班牙的銀行如何拯救垂危的鬥牛場。

Europe Crisis spread to core?

Euro zone manufacturing data: doesn't look good! After the financial crisis then we move focus to manufacturing sectors.

1.) From peripheral to core: Germany/France experience downturn in manufacturing sectors.

France has weaker position as their exposure to southern european countries are larger. (than Germany) However, as placed in a major leader and a lender position, Germany cannot be left intact.

I recall another day I had another conversation with frineds, saying that Germany can "purposely" keep the EU-crisis go on to be benefit from devalued EURO, which can boost their export sector. I doubted about it then. My argument is that the weak banking sector would rise the funding cost, not even mention the demand shrinkage from the other member states.

The latest data pretty much shows that is not likely for Germany benefit too much from the weak EURO. Everybody gets burned, just to different degrees.

2.) rounds of bailouts to continue?

Not likely. ECB has pumped enough money into banking systems. They project a likely rebound in the second quarter but no one can say for sure. Unlike Fed, which pretty much left inflation behind and focus on growth and revival of economy, ECB has more inflation-sensitive attitude. The 2.6% inflation rate is in their vigilance zone.

The show will be on in the second quarter~

都市更新以及法律權利

這篇文章是基於士林文林苑都市更新案 , 論述基礎是在久遠之前對於Ronald Dworkin的理解上,Sovereign Virtue, 中文譯為"至上美德"

球員轉會跟主席

我(很無聊的)在PTT上面跟很多球友分享一篇文章:

夏天快要到了, 球員的轉會市場跟轉會的狀況, 主席的抉擇, 跟一些八卦花邊消息開始在網路上面激起一堆水花.

本週話題是俱樂部利益跟主席利益, 兩者之間是否一致的狀況. 這樣的討論其實對於商學院有點理解的人來說應該會有種似曾相似的感覺, 就像經理人是否把公司的利益跟他自己本身的利益分開, 或者是職員跟公司本身的利益分開, 簡單來說: 這就是代理人問題.

這個問題開始的起點是關於一篇今年夏天是否應該引進 Neymar的文章. 台灣的ESPN轉了一篇中國新浪的報導, 提到Rosell應該非常的想要這個deal能夠go through.

Rosell這個人的背景先講一下: 出身於商人家庭, 他早年事業是從南美洲發跡的, 在商場上最高的職位應該是巴西NIKE 的總裁, 而基於他在南美洲的影響力, 也為FCB引進了不少優秀的南美洲球員.

整體文章的重點應該變成: 如果引進Neymar到底符合的是FCB的利益, 還是符合Rosell以及他前東家在巴西的利益?

競技狀態:
FCB現在最需要的應該是防守的補強而不是進攻, 左後衛的位置基本上還沒有解答(流言Jordi Alba已經成局,但還是得靜觀其變); 中場防守人員一個年紀會逐漸增加(Puyol)一個會偶爾給球隊太多驚喜(嚇) (Pique), 右後衛應該還是D. Alves的天下, 但是沒有人是鐵打的總是需要有人替補. 小朋友可能可以頂上來, 但是還是不要揠苗助長的好.

中場目前看來是相對沒有問題的, Cesc的引進解決了很多問題, 而Xavi+Iniesta應該還能夠用上好一陣子, 防守方面有Busquets跟Mescherano, 而板凳上還有Keita 跟小朋友們~

前場應該是最擁擠, 最沒有老化問題, 也還有新人可以練的狀況.

Neymar是個好球員, 但是今年夏天可以說是最不需要他的時候.

代理人問題:
我在那篇文章裡面大膽了提出兩個代理人問題的假說:
1.) Rosell 需要從他自己的利益出發, 而他的思考邏輯就是個商人
2.) 而不管是誰當俱樂部的主席, 都希望能夠讓俱樂部成為是他的一個媒介, 讓他個人的利益能夠最大化.

然後從這幾年的事件裡面去找是否羅塞爾表現出來的行為可以"驗證"這兩個假說的狀態是否為真.

討論的事件:
1.) Rosell跟前主席Laporta的路線不合之爭:
2.) Rosell對俱樂部財政以及對於上任之後對Laporta以及Cruyff的對待方式
3.) Rosell 在Qatar Foundation贊助的處理方式
4.) Rosell 在Ibra轉會的態度
5.) Rosell在Cesc轉會的態度
6.) Rosell跟Pep對於今年夏天轉會可能的爭議

當然, 有人會認為這些事件單純只是分離的事件, 或者是說, 這些事件的結果可以有多方面的解讀, 也就是說, 每個人可以有自己的詮釋: 如果我要把前六件事件整理成為支持前兩點假說的證據也可以; 或者是說, 我要解讀成為Rosell是個真心為俱樂部好的主席也可以.

得到的結論可以非常不同, 他可能是個很好的在兩者Balanced的主席, 知道什麼時候他自己應該退讓, 什麼時候他自己應該要堅持或者是協助其他人去滿足一些條件; 或者是他沒有忘記他自己商人的角色, 希望讓自己的商業利益最大化.

在整理的過程中我一直質問自己的角度是: 到底什麼是Rosell的incentive?他把巴薩隆納打造成為世界競技狀態頂級的俱樂部最大的好處是為了誰? 其中對他來講最大的利益會是什麼?

我想這會是在今年夏天在關注轉會議題的同時我會不斷想到的一個問號.

在學理上我們一直認為, 如果把代理人的利益跟委託人 的利益一致化, 那麼可以讓兩者之間的衝突最小, 對於代理組織的效率應該是有幫助的. 然而, 再前一波金融危機的時候卻告訴我們不見得是這樣的. 從雷曼兄弟的狀況, 來看, 就算所有人的利益或多或少都綁在一起, 並沒有辦法完全消除代理人問題的發生.

After all, 只要我們有組織, 有委託, 有代理, 這些狀況就會不斷的出現