The awareness test

I thought this was a very interesting message to share. Sometime, we need a few moment (say 5 mins a day?) to take a step away from whatever we do and improve our awareness. It's easy to miss something in front of you when you're not looking for it.

How do you instill confidence?

Answer: TRANSPARENCY!

How I wish more countries and corporations around the world will follow suit. It does not matter if it's truly transparent. It just need to feel transparent. It's the perception at work here. People will follow you till the end when you provide them a convincing "status update" on the current situation.

Visit http://www.recovery.gov/

Silence is golden

I've always wondered why do the lawyers get paid so much....

Now I know. Never ever get interrogated by police officer alone or you're doomed!

Obama's First Press Conference

We hate you guys, but there is nothing much we can do.

Why China Needs US Debt

By Stratfor

China does not see any choice but to keep buying U.S. government debt, Luo Ping, a director-general at the China Banking Regulatory Commission (CBRC), told a New York risk-managers conference on Thursday. The Financial Times quoted him as saying: “Except for U.S. Treasuries, what can you hold? Gold? You don’t hold Japanese government bonds or U.K. bonds. U.S. Treasuries are the safe-haven. For everyone, including China, it is the only option.” Even if the dollar depreciates because of Washington’s financial bailouts, he added, China has no other options.

Luo is acknowledging something of an open secret. Despite occasional hints (or threats) that China might attempt to bankrupt the United States by suddenly selling all of the U.S. debt it holds, that really is not an option. China would be economically destroyed in the process, unless there was some alternative place for Beijing to invest. For a number of reasons, there is none.

Over the past two decades, the United States and China have developed a special relationship based on the safety of U.S. debt. In essence, the United States gives China access to the wealthiest consumer market in the world, which in turn soaks up China’s massive output of consumer goods. This not only provides income for Chinese exporters, but also helps ensure social stability in China by providing employment — which is Beijing’s primary economic policy goal. China in turn invests its large trade surpluses, earned in U.S. dollars, into U.S. Treasury debt (e.g., 30-year bonds or 10-year notes). This allows China to store its earnings in one of the largest and most liquid financial markets in the world, without needing to convert between currencies. Meanwhile, the recycling of surpluses into Treasury instruments helps to bankroll continued U.S. spending. It is vendor financing on a global scale.

This relationship has fueled unprecedented booms in both U.S. consumer spending and Chinese industrialization. Even in the midst of recession, China continues to sock away savings — but now, because of the financial crisis, questions are being raised as to whether U.S. Treasury debt is the best vehicle for storing those funds.

Simply put, it costs a lot to buttress a collapsing financial market. As the cost of U.S. financial bailouts piles up, Washington’s balance sheet is deteriorating. Since the credit crisis began in the fourth quarter of 2007, bailouts have put U.S. government commitments at nearly $9 trillion. To be sure, this is more akin to a line of credit than a tally of real spending — though the actual federal outlays to date, around $3 trillion, represent roughly 20 percent of U.S. gross domestic product (GDP). At any rate, the stakes are high and investors are nervous.

China is the largest holder of U.S. government debt, so it is no wonder that Yu Yongding, the head of China’s World Economics and Politics Institute and a former adviser to the central bank, on Wednesday said that because of its “reckless policies” the United States should “make the Chinese feel confident that the value of the assets at least will not be eroded in a significant way.” His remarks were meant to impress upon Washington that, as the primary financier of U.S. debt, China holds considerable power in the relationship.

In general, as a country’s balance sheet comes under increasing strain, investors tend to sell that country’s assets and move their funds to places with more attractive fundamentals (such as a trade or budget surplus). But the notion that U.S. debt is becoming a questionable asset and is about to be dumped by investors has not proved true. Instead, money from all over the world has been flooding into American markets, sending the dollar to its highest levels — and bond yields to their lowest — in years.

U.S. Treasuries remain the primary vehicle for investing surpluses, and for Chinese surpluses in particular Chinese. The reasons are many. For one thing, few other countries have debt markets large enough to support the level of investment China needs to make. The U.S. debt market is larger than the three next largest combined. In fact, only Japan has a debt market larger than that of the United States — but because Japan’s debt represents some 170 percent of its GDP, it has a credit rating no better than that of the better-run states in sub-Saharan Africa. The U.S. Treasury debt market, while large, represents only about half of U.S. GDP — a much more manageable fraction.

Of the top ten largest debt markets, the four that are in the eurozone — Germany, France, Italy and Spain — could provide viable alternatives for China. But these also pose problems. Much like Middle Eastern oil states, China not only receives most of its income in dollars, but also effectively pegs its own currency on the dollar. This means that for the Chinese, savings and investments held in dollar-denominated assets are relatively safe, stable and accessible. From Beijing’s perspective, it makes little sense to convert surplus dollars into euros, only to grow more exposed to currency fluctuations. (And even that assumes that one trusts the financial governance of other states – for example, Italy.)

If Beijing does not view euro-based debt as a viable alternative to the United States because of currency stability, it has even less confidence in other Top Ten debt markets, which are denominated in even less stable currencies. The markets for the Brazilian real, the South Korean won, and even the Canadian dollar and British pound are simply too small, fractured and volatile to provide the level of safety that the U.S. dollar does. And in any case, all of these markets are much too small to absorb Chinese trade surpluses month after month. Only the regular issuance of multibillion-dollar debt tranches by the United States, fueled by U.S. budget and trade deficits, can suffice.

If government paper cannot fill its needs, China could turn to commodities — if anything, perhaps gold could provide a viable store of value without subjecting China to the fiscal swashbuckling of a foreign government. But even here, the size of the gold market could not support Beijing’s investment needs. Even if China were somehow able to absorb the total annual output of the world’s gold mines — roughly 80 million troy ounces — doing so would both collapse global debt markets and send gold prices to stratospheric heights. (Not exactly a welcome scenario for a country utterly dependent upon international trade.) And for all that, China could sock away the same amount of value after only about three months of trading with the United States.

Ultimately, steering funds clear of American debt markets is not desirable — or even possible — for the Chinese. Luo, the CBRC official (who is known for his colloquial style), stated Beijing’s viewpoint about as plainly as it can be put during his speech in New York, saying: “We hate you guys, but there is nothing much we can do.”

WARNINGS! Bittorrents are in Danger of collapse.

The operators of Pirate Bay are standing trial in Stockholm. As the chart shows, if they are forced to shutdown, all the BitTorrent will collapse.

Pirate Bay's servers are responsible for tracking the majority of the internet's torrents. The entire ecosystem depends on the outcome of this trial.

The good news:

• Trackerless torrents are currently in development.
  
• Somebodywill replace Pirate Bay

The bad news:

• World Anarchy after the fall of Pirate Bay.
  

Happy Valentine Day

Hidden meaning behind Obama's inauguration speech

Thanks to Jia Yin, here's a peek into the true meaning of Obama's speech during his inauguration.

What Obama meant during his 20 minute's speech

It'll be interesting if we can do the same with our local politician. If only they truly meant what they say and stop flip-flopping.

Breakdown of stimulus package

Anyone interested in dissecting the meaning of this stimulus package?

Stimulus Package Explained (Q&A)

How do you explain a stimulus package to an American?
American is trading today's glory for tomorrow's burden.... but don't forget that American will be moving to the moon in next decade, and Mars by next century. Hm... so I wonder what's the property value is like up there. Then I bet by then the bubble burst will be in "interplanetary proportion"...

By Barry Ritholtz

Sometime this year, taxpayers will receive an Economic Stimulus Payment. This is a very exciting new program that I will explain using the Q and A format:

Q. What is an Economic Stimulus Payment?
A. It is money that the federal government will send to taxpayers.

Q. Where will the government get this money?
A. From taxpayers.

Q. So the government is giving me back my own money?
A. No, they are borrowing it from China. Your children are expected to repay the Chinese.

Q. What is the purpose of this payment?
A. The plan is that you will use the money to purchase a high-definition TV set, thus stimulating the economy.

Q. But isn’t that stimulating the economy of China ?
A. Shut up.

Below is some helpful advice on how to best help the US economy by spending your stimulus check wisely:

If you spend that money at Wal-Mart, all the money will go to China.
If you spend it on gasoline it will go to Hugo Chavez, the Arabs and Al Queda
If you purchase a computer it will go to Taiwan.
If you purchase fruit and vegetables it will go to Mexico, Honduras, and Guatemala (unless you buy organic).
If you buy a car it will go to Japan and Korea.
If you purchase prescription drugs it will go to India
If you purchase heroin it will go to the Taliban in Afghanistan
If you give it to a charitable cause, it will go to Nigeria.

And none of it will help the American economy. We need to keep that money here in America. You can keep the money in America by spending it at yard sales, going to a baseball game, or spend it on prostitutes, beer (domestic only), or tattoos, since those are the only businesses still in the US.

Job Losses in recent recessions

To clarify, these are not projections. This is actual job-loss data.* Pelosi's office explains:

This chart compares the job loss so far in this recession to job losses in the 1990-1991 recession and the 2001 recession -- showing how dramatic and unprecedented the job loss over the last 13 months has been. Over the last 13 months, our economy has lost a total of 3.6 million jobs – and continuing job losses in the next few months are predicted.

By comparison, we lost a total of 1.6 million jobs in the 1990-1991 recession, before the economy began turning around and jobs began increasing; and we lost a total of 2.7 million jobs in the 2001 recession, before the economy began turning around and jobs began increasing.

*Pelosi's office says they used Bureau of Labor Statistics numbers.

The next time somebody comes to you and start telling you that the economy is starting to picks up, please show them this picture. The unemployment rate has NOT reached the bottom yet. As history shown, the unemployment rates need to plateau off before it can picks itself up again. Until that time, better start pinching every single pennies you can find.