It's kinda quiet in here huh? Well I've been spending late nights and eyes are usually tired by the end of the day. Guess my end of day routine ends up being watching the colbert report or the daily show rather than blogging.
So I was gonna volunteer at the museum by starting with their history lessons. Unfortunatly I procrastinated, and now the classes are all full so that's that. On hindsight this is probably better, I need more time to work out and time for myself on the weekends.
So what's the market outlook? My pick for this week is SBS transit. I think buses are doing well, and ridership will rise cos the government's giving more incentive for people to go scrap their cars. Yeah we really have way too many cars here. Too many people for that matter. It's so strange how it doesnt take me that long to get to work in the morning, but it takes hella long to get home. Maybe that's cos I don't start work that early. hmm....
I'll be on course for 3 wks starting monday. We have day off from course to go back to office on fridays, but I think that's just dumb. I'm not gonna lug my laptop around so I'll probably take leave and work from home on fridays.
Start of the new FY, somehow seems like not that much excitement. Some unexpected bonus was good, but it looks like other ministries had way more. Do I care? Hell, more money is always good!
Key words for today: Total Return strategy. Make money all the time every time, don't care about benchmarks!
Friday, April 04, 2008
Sunday, March 23, 2008
Can facebook make money?
Online social networks
Everywhere and nowhere
Mar 19th 2008 | SAN FRANCISCO
From The Economist print edition
Social networking will become a ubiquitous feature of online life. That does not mean it is a business
Illustration by David Simonds
A LARGE but long-in-the-tooth technology company hoping to become a bigger force in online advertising buys a small start-up in a sector that everybody agrees is the next big thing. A decade ago, this was Microsoft buying Hotmail—the firm that established web-based e-mail as a must-have service for internet users, and promised to drive up page views, and thus advertising inventory, on the software giant's websites. This month it was AOL, a struggling web portal that is part of Time Warner, an old-media giant, buying Bebo, a small but up-and-coming online social network, for $850m.
Both deals, in their respective decades, illustrate a great paradox of the internet in that the premise underlying them is precisely half right and half wrong. The correct half is that a next big thing—web-mail then, social networking now—can indeed quickly become something that consumers expect from their favourite web portal. The non sequitur is to assume that the new service will be a revenue-generating business in its own right.
Web-mail has certainly not become a business. Admittedly, Google, Microsoft, Yahoo!, AOL and other providers of web-mail accounts do place advertisements on their web-mail offerings, but this is small beer. They offer e-mail—and volumes of free archival storage unimaginable a decade ago—because the service, including its associated address book, calendar, and other features, is cheap to deliver and keeps consumers engaged with their brands and websites, making users more likely to visit affiliated pages where advertising is more effective.
Social networking appears to be similar in this regard. The big internet and media companies have bid up the implicit valuations of MySpace, Facebook and others. But that does not mean there is a working revenue model. Sergey Brin, Google's co-founder, recently admitted that Google's “social networking inventory as a whole” was proving problematic and that the “monetisation work we were doing there didn't pan out as well as we had hoped.” Google has a contractual agreement with News Corp to place advertisements on its network, MySpace, and also owns its own network, Orkut. Clearly, Google is not making money from either.
Facebook, now allied to Microsoft, has fared worse. Its grand attempt to redefine the advertising industry by pioneering a new approach to social marketing, called Beacon, failed completely. Facebook's idea was to inform a user's friends whenever he bought something at certain online retailers, by running a small announcement inside the friends' “news feeds”. In theory, this was to become a new recommendation economy, an algorithmic form of word of mouth. In practice, users rebelled and privacy watchdogs cried foul. Mark Zuckerberg, Facebook's founder, admitted in December that “we simply did a bad job with this release” and apologised.
So it is entirely conceivable that social networking, like web-mail, will never make oodles of money. That, however, in no way detracts from its enormous utility. Social networking has made explicit the connections between people, so that a thriving ecosystem of small programs can exploit this “social graph” to enable friends to interact via games, greetings, video clips and so on.
Coming up for air
But should users really have to visit a specific website to do this sort of thing? “We will look back to 2008 and think it archaic and quaint that we had to go to a destination like Facebook or LinkedIn to be social,” says Charlene Li at Forrester Research, a consultancy. Future social networks, she thinks, “will be like air. They will be anywhere and everywhere we need and want them to be.” No more logging on to Facebook just to see the “news feed” of updates from your friends; instead it will come straight to your e-mail inbox, RSS reader or instant messenger. No need to upload photos to Facebook to show them to friends, since those with privacy permissions in your electronic address book can automatically get them.
The problem with today's social networks is that they are often closed to the outside web. The big networks have decided to be “open” toward independent programmers, to encourage them to write fun new software for them. But they are reluctant to become equally open towards their users, because the networks' lofty valuations depend on maximising their page views—so they maintain a tight grip on their users' information, to ensure that they keep coming back. As a result, avid internet users often maintain separate accounts on several social networks, instant-messaging services, photo-sharing and blogging sites, and usually cannot even send simple messages from one to the other. They must invite the same friends to each service separately. It is a drag.
Historically, online media tend to start this way. The early services, such as CompuServe, Prodigy or AOL, began as “walled gardens” before they opened up to become websites. The early e-mail services could send messages only within their own walls (rather as Facebook's messaging does today). Instant-messaging, too, started closed, but is gradually opening up. In social networking, this evolution is just beginning. Parts of the industry are collaborating in a “data portability workgroup” to let people move their friend lists and other information around the web. Others are pushing OpenID, a plan to create a single, federated sign-on system that people can use across many sites.
The opening of social networks may now accelerate thanks to that older next big thing, web-mail. As a technology, mail has come to seem rather old-fashioned. But Google, Yahoo!, Microsoft and other firms are now discovering that they may already have the ideal infrastructure for social networking in the form of the address books, in-boxes and calendars of their users. “E-mail in the wider sense is the most important social network,” says David Ascher, who manages Thunderbird, a cutting-edge open-source e-mail application, for the Mozilla Foundation, which also oversees the popular Firefox web browser.
That is because the extended in-box contains invaluable and dynamically updated information about human connections. On Facebook, a social graph notoriously deteriorates after the initial thrill of finding old friends from school wears off. By contrast, an e-mail account has access to the entire address book and can infer information from the frequency and intensity of contact as it occurs. Joe gets e-mails from Jack and Jane, but opens only Jane's; Joe has Jane in his calendar tomorrow, and is instant-messaging with her right now; Joe tagged Jack “work only” in his address book. Perhaps Joe's party photos should be visible to Jane, but not Jack.
This kind of social intelligence can be applied across many services on the open web. Better yet, if there is no pressure to make a business out of it, it can remain intimate and discreet. Facebook has an economic incentive to publish ever more data about its users, says Mr Ascher, whereas Thunderbird, which is an open-source project, can let users minimise what they share. Social networking may end up being everywhere, and yet nowhere.
Everywhere and nowhere
Mar 19th 2008 | SAN FRANCISCO
From The Economist print edition
Social networking will become a ubiquitous feature of online life. That does not mean it is a business
Illustration by David Simonds
A LARGE but long-in-the-tooth technology company hoping to become a bigger force in online advertising buys a small start-up in a sector that everybody agrees is the next big thing. A decade ago, this was Microsoft buying Hotmail—the firm that established web-based e-mail as a must-have service for internet users, and promised to drive up page views, and thus advertising inventory, on the software giant's websites. This month it was AOL, a struggling web portal that is part of Time Warner, an old-media giant, buying Bebo, a small but up-and-coming online social network, for $850m.
Both deals, in their respective decades, illustrate a great paradox of the internet in that the premise underlying them is precisely half right and half wrong. The correct half is that a next big thing—web-mail then, social networking now—can indeed quickly become something that consumers expect from their favourite web portal. The non sequitur is to assume that the new service will be a revenue-generating business in its own right.
Web-mail has certainly not become a business. Admittedly, Google, Microsoft, Yahoo!, AOL and other providers of web-mail accounts do place advertisements on their web-mail offerings, but this is small beer. They offer e-mail—and volumes of free archival storage unimaginable a decade ago—because the service, including its associated address book, calendar, and other features, is cheap to deliver and keeps consumers engaged with their brands and websites, making users more likely to visit affiliated pages where advertising is more effective.
Social networking appears to be similar in this regard. The big internet and media companies have bid up the implicit valuations of MySpace, Facebook and others. But that does not mean there is a working revenue model. Sergey Brin, Google's co-founder, recently admitted that Google's “social networking inventory as a whole” was proving problematic and that the “monetisation work we were doing there didn't pan out as well as we had hoped.” Google has a contractual agreement with News Corp to place advertisements on its network, MySpace, and also owns its own network, Orkut. Clearly, Google is not making money from either.
Facebook, now allied to Microsoft, has fared worse. Its grand attempt to redefine the advertising industry by pioneering a new approach to social marketing, called Beacon, failed completely. Facebook's idea was to inform a user's friends whenever he bought something at certain online retailers, by running a small announcement inside the friends' “news feeds”. In theory, this was to become a new recommendation economy, an algorithmic form of word of mouth. In practice, users rebelled and privacy watchdogs cried foul. Mark Zuckerberg, Facebook's founder, admitted in December that “we simply did a bad job with this release” and apologised.
So it is entirely conceivable that social networking, like web-mail, will never make oodles of money. That, however, in no way detracts from its enormous utility. Social networking has made explicit the connections between people, so that a thriving ecosystem of small programs can exploit this “social graph” to enable friends to interact via games, greetings, video clips and so on.
Coming up for air
But should users really have to visit a specific website to do this sort of thing? “We will look back to 2008 and think it archaic and quaint that we had to go to a destination like Facebook or LinkedIn to be social,” says Charlene Li at Forrester Research, a consultancy. Future social networks, she thinks, “will be like air. They will be anywhere and everywhere we need and want them to be.” No more logging on to Facebook just to see the “news feed” of updates from your friends; instead it will come straight to your e-mail inbox, RSS reader or instant messenger. No need to upload photos to Facebook to show them to friends, since those with privacy permissions in your electronic address book can automatically get them.
The problem with today's social networks is that they are often closed to the outside web. The big networks have decided to be “open” toward independent programmers, to encourage them to write fun new software for them. But they are reluctant to become equally open towards their users, because the networks' lofty valuations depend on maximising their page views—so they maintain a tight grip on their users' information, to ensure that they keep coming back. As a result, avid internet users often maintain separate accounts on several social networks, instant-messaging services, photo-sharing and blogging sites, and usually cannot even send simple messages from one to the other. They must invite the same friends to each service separately. It is a drag.
Historically, online media tend to start this way. The early services, such as CompuServe, Prodigy or AOL, began as “walled gardens” before they opened up to become websites. The early e-mail services could send messages only within their own walls (rather as Facebook's messaging does today). Instant-messaging, too, started closed, but is gradually opening up. In social networking, this evolution is just beginning. Parts of the industry are collaborating in a “data portability workgroup” to let people move their friend lists and other information around the web. Others are pushing OpenID, a plan to create a single, federated sign-on system that people can use across many sites.
The opening of social networks may now accelerate thanks to that older next big thing, web-mail. As a technology, mail has come to seem rather old-fashioned. But Google, Yahoo!, Microsoft and other firms are now discovering that they may already have the ideal infrastructure for social networking in the form of the address books, in-boxes and calendars of their users. “E-mail in the wider sense is the most important social network,” says David Ascher, who manages Thunderbird, a cutting-edge open-source e-mail application, for the Mozilla Foundation, which also oversees the popular Firefox web browser.
That is because the extended in-box contains invaluable and dynamically updated information about human connections. On Facebook, a social graph notoriously deteriorates after the initial thrill of finding old friends from school wears off. By contrast, an e-mail account has access to the entire address book and can infer information from the frequency and intensity of contact as it occurs. Joe gets e-mails from Jack and Jane, but opens only Jane's; Joe has Jane in his calendar tomorrow, and is instant-messaging with her right now; Joe tagged Jack “work only” in his address book. Perhaps Joe's party photos should be visible to Jane, but not Jack.
This kind of social intelligence can be applied across many services on the open web. Better yet, if there is no pressure to make a business out of it, it can remain intimate and discreet. Facebook has an economic incentive to publish ever more data about its users, says Mr Ascher, whereas Thunderbird, which is an open-source project, can let users minimise what they share. Social networking may end up being everywhere, and yet nowhere.
Saturday, March 22, 2008
Educationg prisoners (maybe the easiest way to get into mba for free!)
Rehabilitating prisoners
A new deal
Mar 19th 2008 | CLEVELAND, TEXAS
From The Economist print edition
Finding promise in prisoners
SAM AMAYA was six years old when he first pulled a gun on another person—his father, who was beating his mother. At eight he would produce the gun when he wanted his sister to change the channel from a soap opera to a cartoon. At 13, after a fight with his father, he fled from his house to his school's playground, where some members of the Two-Six gang were meeting. He was initiated later that afternoon. He began running drugs as a teenager, picking up consignments of marijuana and cocaine near the border with Mexico and selling them around Texas.
With such a background, it is perhaps not surprising that Mr Amaya was arrested after pistol-whipping a girlfriend and is today, at 28, about to finish a long sentence for aggravated assault. Statistics would suggest that he will be back before too long: according to the Pew Centre on the States, more than half of released offenders return to prison within three years, and Texas has the country's second-highest rate of incarceration. In fact, Mr Amaya's future should be more cheerful than those numbers suggest.
Just before he is released on June 23rd, if all goes to plan, Mr Amaya will graduate from the Prison Entrepreneurship Programme (PEP), a remarkable effort to prepare some of Texas's harder cases for their transition back to freedom. The programme was founded in 2004 by Catherine Rohr, a venture capitalist who changed careers after visiting several Texas prisons.
Her premise is that many criminals are intelligent people with good heads for business and healthy appetites for risk, and that these traits can be put to productive use. She is particularly interested in people who have already demonstrated these skills—for example by running a successful drug business or achieving a high rank in a gang.
During the past four years PEP has put more than 300 inmates through four months of business classes and study. They meet MBA students to develop business plans, and hundreds of businessmen have taken part in special events at the prison. About 40 graduates already have businesses up and running. The vast majority are employed. Fewer than 5% have reoffended. The programme is privately funded, and that success rate has helped it grow. In 2004 Ms Rohr used her savings to get things going; this year the operating budget is $3.2m.
PEP's success is partly due to the fact that the programme takes only the most serious applicants. Prospective participants first fill out a lengthy questionnaire. Those that pass have an interview, where Ms Rohr claims she rumbles the fakers. Once selected, a participant can be booted out at any time for a variety of infractions, such as cheating or maintaining gang membership. The current class started with 87 members and is down to 39.
Participants say that PEP provides male role models, and helps them have hope for the future. Ms Rohr considers it her job to build character. “They're not in here because they were bad businessmen,” she says. “They're in here because they were lacking moral values in their lives.” She assigns them ethical case studies and leads discussions on everything from honesty to sexual relationships.
Texas is making its own efforts to improve results for released offenders, but released prisoners typically get just $100 and a bus ticket to Houston or Dallas. PEP picks up its graduates at the gate with packages of sheets, toiletries and business suits. It helps them find work and housing, and even offers a free trip to the dentist. According to Gregory Mack, a participant, all this makes a big difference. Mr Mack has been in and out of prison on drug charges for the past two decades. He completed a behaviour-modification programme in 2002 as a condition for parole, but its value was limited. “They really had nothing to offer outside the walls,” he explains. By 2005 he was behind bars again. Mr Amaya now has a chance to avoid that fate.
A new deal
Mar 19th 2008 | CLEVELAND, TEXAS
From The Economist print edition
Finding promise in prisoners
SAM AMAYA was six years old when he first pulled a gun on another person—his father, who was beating his mother. At eight he would produce the gun when he wanted his sister to change the channel from a soap opera to a cartoon. At 13, after a fight with his father, he fled from his house to his school's playground, where some members of the Two-Six gang were meeting. He was initiated later that afternoon. He began running drugs as a teenager, picking up consignments of marijuana and cocaine near the border with Mexico and selling them around Texas.
With such a background, it is perhaps not surprising that Mr Amaya was arrested after pistol-whipping a girlfriend and is today, at 28, about to finish a long sentence for aggravated assault. Statistics would suggest that he will be back before too long: according to the Pew Centre on the States, more than half of released offenders return to prison within three years, and Texas has the country's second-highest rate of incarceration. In fact, Mr Amaya's future should be more cheerful than those numbers suggest.
Just before he is released on June 23rd, if all goes to plan, Mr Amaya will graduate from the Prison Entrepreneurship Programme (PEP), a remarkable effort to prepare some of Texas's harder cases for their transition back to freedom. The programme was founded in 2004 by Catherine Rohr, a venture capitalist who changed careers after visiting several Texas prisons.
Her premise is that many criminals are intelligent people with good heads for business and healthy appetites for risk, and that these traits can be put to productive use. She is particularly interested in people who have already demonstrated these skills—for example by running a successful drug business or achieving a high rank in a gang.
During the past four years PEP has put more than 300 inmates through four months of business classes and study. They meet MBA students to develop business plans, and hundreds of businessmen have taken part in special events at the prison. About 40 graduates already have businesses up and running. The vast majority are employed. Fewer than 5% have reoffended. The programme is privately funded, and that success rate has helped it grow. In 2004 Ms Rohr used her savings to get things going; this year the operating budget is $3.2m.
PEP's success is partly due to the fact that the programme takes only the most serious applicants. Prospective participants first fill out a lengthy questionnaire. Those that pass have an interview, where Ms Rohr claims she rumbles the fakers. Once selected, a participant can be booted out at any time for a variety of infractions, such as cheating or maintaining gang membership. The current class started with 87 members and is down to 39.
Participants say that PEP provides male role models, and helps them have hope for the future. Ms Rohr considers it her job to build character. “They're not in here because they were bad businessmen,” she says. “They're in here because they were lacking moral values in their lives.” She assigns them ethical case studies and leads discussions on everything from honesty to sexual relationships.
Texas is making its own efforts to improve results for released offenders, but released prisoners typically get just $100 and a bus ticket to Houston or Dallas. PEP picks up its graduates at the gate with packages of sheets, toiletries and business suits. It helps them find work and housing, and even offers a free trip to the dentist. According to Gregory Mack, a participant, all this makes a big difference. Mr Mack has been in and out of prison on drug charges for the past two decades. He completed a behaviour-modification programme in 2002 as a condition for parole, but its value was limited. “They really had nothing to offer outside the walls,” he explains. By 2005 he was behind bars again. Mr Amaya now has a chance to avoid that fate.
Thursday, March 13, 2008
Too much time spent on face
Hold the Criticism in China
Where Face is Everything
March 11, 2008
Note to readers: The Chinese version of this column is available here
A Chinese friend in New York is upset at all the news reports about Chinese product recalls.
"I felt as if I lost my own face," she said, referring to the Chinese term that refers roughly to one's pride. "Why is it always Chinese companies that put money ahead of everything else?" she asked. "How will Americans think of us?"
My friend's comments are typical of how Chinese react to criticism and unflattering news coverage of China in the West. Most Chinese care a great deal about how foreigners think of China and the Chinese. When the portrayal is positive, Chinese are proud that they're given a lot of "face." When it's negative, they can feel humiliated or even angry, believing that the conclusion is based on bias.
JOIN THE DISCUSSION
How do you feel when you hear criticism of the U.S. and its government? Do you take it personally? Share your opinion with fellow readers in an online forum.Many foreigners in China find themselves frequently running into questions, such as: How do you like China, Chinese, and the Beijing Olympics? Most of the time, there's only one acceptable answer: "Yes, it's great." If there's a "but," keep it to yourself. Air your doubts, and many Chinese won't receive it well at all. Be prepared to be called a "China basher" or told that you're ignorant of China.
Kyle Caldwell, an American running an English school, a restaurant and a bar in Qingdao, Shandong province, said that he's learned all the "correct" answers. When I asked the 25-year-old what the real answers are, he paused and said, "I have to be very careful because I'm doing business in China." He then added, "In general, I'm a very positive person."
It's not that we Chinese aren't critical of our government or each other. But when the criticism comes from foreigners, it instantly becomes a different story. For example, Chinese readers have very different reactions to the same coverage of a contaminated anticancer drug in Nanfang Weekend, a well-respected Chinese newspaper, and on The Wall Street Journal's Chinese Web site www.chinese.wsj.com, which publishes Journal stories translated into Chinese as well as original content, like this column.
Readers' comments on the Nanfang Weekend story, posted on China's popular Tianya online forum, uniformly chastise the pharmaceutical company's behavior, with some people calling it "greedy" and "irresponsible." Several readers used the word "tragic" in their comments. The Journal story also attracted some angry comments, not targeted at the company, but at the Journal for doing such a story in the first place. Some comments were critical of the pharmaceutical company.
"I believe my Motherland can handle it. You foreigners should stop interfering," wrote a reader with the pen name "Phoenix." A reader called Eric wrote, "What are the editorial standards of The Wall Street Journal? Every time (I) read its news, it's full of slander, false accusations and suspicions. (I) hope the government agency in charge of the press should pay attention to the publication's circulation in China."
What I don't understand is that if this type of stories can at least inform readers (who are also consumers and investors), why would some of them want to bury their heads in the sand and pretend nothing is happening? Why do they think more highly of China's face than their fellow countrymen's (and possibly their own) livelihood and life?
In late 2006, a friend of mine saw an old woman begging on the Beijing subway. Nobody paid much attention to her until she stopped in front of a white man, possibly the only foreigner in the car. A fellow passenger, an old lady with heavy Beijing accent, yelled at the beggar, "How dare you beg for money from a foreigner? Don't you know you're making the Chinese people lose face?" It had never occurred to me that the beggars on New York subways mean a loss of face for the U.S. or Americans. Every country has its own problems.
A good example of the face issue comes from a reader's comment on a Journal story on Chinese.wsj.com about the controversial China Central Television tower, one of the monumental buildings constructed in anticipation of the Beijing Olympics Games. Many Beijing residents dislike the unusually shaped design.
The reader, signed with the name "titans," wrote, now that China claims to be the third most-powerful nation in the world, "when foreigners see the old TV tower, they may well suspect if Beijing is lying."
"My suggestion is that every Beijing resident should make at least 6,000 yuan ($845) a month," "titans" wrote. Otherwise, they should be sent to the neighboring, less developed Hebei province because their clothing and housing conditions could harm the image of Chinese, "titans" said.
Why do Chinese care so much about what foreigners think of us?
It's a complex question. Here are a few possible reasons:
First, for Chinese, the state, nation and individuals are closely integrated. To criticize one is to attack the whole. Although the government isn't elected by the people, and Chinese regularly criticize government policies and officials in private and semi-privately on the Internet, they often jump to the government's defense when the criticism comes from foreigners. The loss of face on the government's part is a loss for the whole Chinese nation.
Second, China has a victim's mentality after suffering poverty and foreign invasions for so much of its recent history. When we are criticized by foreigners, our insecurity could lead us to believe that the commentators are either biased, jealous of China's achievements or scared of China's rise as a world power.
We Chinese have every reason to be proud of ourselves for our achievements in the past 30 years. But we need to have more confidence in ourselves. The more confident and self-possessed China and the Chinese are, the more open and welcome others are likely to be with us.
Third, many Chinese don't believe there's such a thing as an independent press. The most powerful media entities in China are supposed to serve as "mouthpieces" of the Communist Party. Chinese often believe what is said in the press more or less represents government positions on the issue. To be sure, there are serious Chinese journalists and publications that report on corruptions and question government decisions, especially those on the local level. But they often operate in grey areas and have to toe the line on sensitive policy and political issues.
Many Chinese are also suspicious of the conflicts of interests between business news reporters and companies. For example, in their comments on the Chinese WSJ site, many readers accused the two Journal reporters, who wrote a story last week about Ping An Insurance (Group) Co.'s stock offering, of peddling the stock on behalf of the company. I was shocked by the accusations. I'm not sure if they would believe me that all Journal reporters have to sign a conflict of interest declaration once a year, which forbids people from trading in stocks of companies they cover. And the declaration is not just a piece of paper. People take it very seriously here.
I'm not saying that the Western press has always been fair in their coverage about China. Some journalists do view China through colored lens. Whenever I hear Lou Dobbs on CNN say "Communist China," I grab the remote control. Few Chinese believe we're still a Communist country. But these kinds of reports don't represent the whole, and the mainstream American press tries hard to be balanced and responsible.
Where Face is Everything
March 11, 2008
Note to readers: The Chinese version of this column is available here
A Chinese friend in New York is upset at all the news reports about Chinese product recalls.
"I felt as if I lost my own face," she said, referring to the Chinese term that refers roughly to one's pride. "Why is it always Chinese companies that put money ahead of everything else?" she asked. "How will Americans think of us?"
My friend's comments are typical of how Chinese react to criticism and unflattering news coverage of China in the West. Most Chinese care a great deal about how foreigners think of China and the Chinese. When the portrayal is positive, Chinese are proud that they're given a lot of "face." When it's negative, they can feel humiliated or even angry, believing that the conclusion is based on bias.
JOIN THE DISCUSSION
How do you feel when you hear criticism of the U.S. and its government? Do you take it personally? Share your opinion with fellow readers in an online forum.Many foreigners in China find themselves frequently running into questions, such as: How do you like China, Chinese, and the Beijing Olympics? Most of the time, there's only one acceptable answer: "Yes, it's great." If there's a "but," keep it to yourself. Air your doubts, and many Chinese won't receive it well at all. Be prepared to be called a "China basher" or told that you're ignorant of China.
Kyle Caldwell, an American running an English school, a restaurant and a bar in Qingdao, Shandong province, said that he's learned all the "correct" answers. When I asked the 25-year-old what the real answers are, he paused and said, "I have to be very careful because I'm doing business in China." He then added, "In general, I'm a very positive person."
It's not that we Chinese aren't critical of our government or each other. But when the criticism comes from foreigners, it instantly becomes a different story. For example, Chinese readers have very different reactions to the same coverage of a contaminated anticancer drug in Nanfang Weekend, a well-respected Chinese newspaper, and on The Wall Street Journal's Chinese Web site www.chinese.wsj.com, which publishes Journal stories translated into Chinese as well as original content, like this column.
Readers' comments on the Nanfang Weekend story, posted on China's popular Tianya online forum, uniformly chastise the pharmaceutical company's behavior, with some people calling it "greedy" and "irresponsible." Several readers used the word "tragic" in their comments. The Journal story also attracted some angry comments, not targeted at the company, but at the Journal for doing such a story in the first place. Some comments were critical of the pharmaceutical company.
"I believe my Motherland can handle it. You foreigners should stop interfering," wrote a reader with the pen name "Phoenix." A reader called Eric wrote, "What are the editorial standards of The Wall Street Journal? Every time (I) read its news, it's full of slander, false accusations and suspicions. (I) hope the government agency in charge of the press should pay attention to the publication's circulation in China."
What I don't understand is that if this type of stories can at least inform readers (who are also consumers and investors), why would some of them want to bury their heads in the sand and pretend nothing is happening? Why do they think more highly of China's face than their fellow countrymen's (and possibly their own) livelihood and life?
In late 2006, a friend of mine saw an old woman begging on the Beijing subway. Nobody paid much attention to her until she stopped in front of a white man, possibly the only foreigner in the car. A fellow passenger, an old lady with heavy Beijing accent, yelled at the beggar, "How dare you beg for money from a foreigner? Don't you know you're making the Chinese people lose face?" It had never occurred to me that the beggars on New York subways mean a loss of face for the U.S. or Americans. Every country has its own problems.
A good example of the face issue comes from a reader's comment on a Journal story on Chinese.wsj.com about the controversial China Central Television tower, one of the monumental buildings constructed in anticipation of the Beijing Olympics Games. Many Beijing residents dislike the unusually shaped design.
The reader, signed with the name "titans," wrote, now that China claims to be the third most-powerful nation in the world, "when foreigners see the old TV tower, they may well suspect if Beijing is lying."
"My suggestion is that every Beijing resident should make at least 6,000 yuan ($845) a month," "titans" wrote. Otherwise, they should be sent to the neighboring, less developed Hebei province because their clothing and housing conditions could harm the image of Chinese, "titans" said.
Why do Chinese care so much about what foreigners think of us?
It's a complex question. Here are a few possible reasons:
First, for Chinese, the state, nation and individuals are closely integrated. To criticize one is to attack the whole. Although the government isn't elected by the people, and Chinese regularly criticize government policies and officials in private and semi-privately on the Internet, they often jump to the government's defense when the criticism comes from foreigners. The loss of face on the government's part is a loss for the whole Chinese nation.
Second, China has a victim's mentality after suffering poverty and foreign invasions for so much of its recent history. When we are criticized by foreigners, our insecurity could lead us to believe that the commentators are either biased, jealous of China's achievements or scared of China's rise as a world power.
We Chinese have every reason to be proud of ourselves for our achievements in the past 30 years. But we need to have more confidence in ourselves. The more confident and self-possessed China and the Chinese are, the more open and welcome others are likely to be with us.
Third, many Chinese don't believe there's such a thing as an independent press. The most powerful media entities in China are supposed to serve as "mouthpieces" of the Communist Party. Chinese often believe what is said in the press more or less represents government positions on the issue. To be sure, there are serious Chinese journalists and publications that report on corruptions and question government decisions, especially those on the local level. But they often operate in grey areas and have to toe the line on sensitive policy and political issues.
Many Chinese are also suspicious of the conflicts of interests between business news reporters and companies. For example, in their comments on the Chinese WSJ site, many readers accused the two Journal reporters, who wrote a story last week about Ping An Insurance (Group) Co.'s stock offering, of peddling the stock on behalf of the company. I was shocked by the accusations. I'm not sure if they would believe me that all Journal reporters have to sign a conflict of interest declaration once a year, which forbids people from trading in stocks of companies they cover. And the declaration is not just a piece of paper. People take it very seriously here.
I'm not saying that the Western press has always been fair in their coverage about China. Some journalists do view China through colored lens. Whenever I hear Lou Dobbs on CNN say "Communist China," I grab the remote control. Few Chinese believe we're still a Communist country. But these kinds of reports don't represent the whole, and the mainstream American press tries hard to be balanced and responsible.
Monday, March 10, 2008
crazy lion videos!!!
http://www.youtube.com/watch?v=LU8DDYz68kM
http://www.youtube.com/watch?v=0jbFpQe271Y&feature=related
http://www.youtube.com/watch?v=geRcSCH1nZI&feature=related
http://www.youtube.com/watch?v=0jbFpQe271Y&feature=related
http://www.youtube.com/watch?v=geRcSCH1nZI&feature=related
Sunday, March 09, 2008
California Love
Possible 2 week california work trip coming up! Oh yeah, thats right! Let's have some good 'ol California song that I haven't heard in a while:
California love!
[1]-California...knows how to party
California...knows how to party
In the citaaay of L.A.
In the citaaay of good ol' Watts
In the citaaay, the city of Compton
We keep it rockin! We keep it rockin!
Now let me welcome everybody to the wild, wild west
A state that's untouchable like Elliot Ness
The track hits ya eardrum like a slug to ya chest
Pack a vest for your Jimmy in the city of sex
We in that sunshine state with a bomb ass hemp beat
the state where ya never find a dance floor empty
And pimps be on a mission for them greens
lean mean money-makin-machines servin fiends
I been in the game for ten years makin rap tunes
ever since honeys was wearin sassoon
Now it's '95 and they clock me and watch me
Diamonds shinin lookin like I robbed Liberace
It's all good, from Diego to tha Bay
Your city is tha bomb if your city makin pay
Throw up a finger if ya feel the same way
Dre puttin it down for
Californ-i-a
[repeat 1]
[2]-Shake it shake it baby
Shake it shake it baby
Shake it shake it mama
Shake it Cali
Shake it shake it baby
Shake it shake it shake it shake it...
Out on bail fresh outta jail, California dreamin
Soon as I stepped on the scene, I'm hearin hoochies screamin
Fiendin for money and alcohol
the life of a west side playa where cowards die and its all ball
Only in Cali where we riot not rally to live and die
In L.A. we wearin Chucks not Ballies (that's right)
Dressed in Locs and khaki suits and ride is what we do
Flossin but have caution we collide with other crews
Famous cause we program worldwide
Let'em recognize from Long Beach to Rosecrans
Bumpin and grindin like a slow jam, it's west side
So you know the row won't bow down to no man
Say what you say
But give me that bomb beat from Dre
Let me serenade the streets of L.A.
From Oakland to Sacktown
The Bay Area and back down
Cali is where they put they mack down
Give me love!
[rpt 1]
[dre] now make it shake...
[rpt 2]
uh, yeah, uh, longbeach in tha house, uh yeah
Oaktown, Oakland definately in tha house hahaha
Frisko, Frisko
[Tupac] hey, you know LA is up in this
Pasadena, where you at
yeah, Inglewood, Inglewood always up to no good
(Tupac) even Hollywood tryin to get a piece baby
Sacramento, sacramento where ya at? yeah
Throw it up y'all, throw it up, Throw it up
Let's show these fools how we do this on that west side
Cause you and I know it's tha best side
yeah, That's riight
west coast, west coast
uh, California Love
California Love
California love!
[1]-California...knows how to party
California...knows how to party
In the citaaay of L.A.
In the citaaay of good ol' Watts
In the citaaay, the city of Compton
We keep it rockin! We keep it rockin!
Now let me welcome everybody to the wild, wild west
A state that's untouchable like Elliot Ness
The track hits ya eardrum like a slug to ya chest
Pack a vest for your Jimmy in the city of sex
We in that sunshine state with a bomb ass hemp beat
the state where ya never find a dance floor empty
And pimps be on a mission for them greens
lean mean money-makin-machines servin fiends
I been in the game for ten years makin rap tunes
ever since honeys was wearin sassoon
Now it's '95 and they clock me and watch me
Diamonds shinin lookin like I robbed Liberace
It's all good, from Diego to tha Bay
Your city is tha bomb if your city makin pay
Throw up a finger if ya feel the same way
Dre puttin it down for
Californ-i-a
[repeat 1]
[2]-Shake it shake it baby
Shake it shake it baby
Shake it shake it mama
Shake it Cali
Shake it shake it baby
Shake it shake it shake it shake it...
Out on bail fresh outta jail, California dreamin
Soon as I stepped on the scene, I'm hearin hoochies screamin
Fiendin for money and alcohol
the life of a west side playa where cowards die and its all ball
Only in Cali where we riot not rally to live and die
In L.A. we wearin Chucks not Ballies (that's right)
Dressed in Locs and khaki suits and ride is what we do
Flossin but have caution we collide with other crews
Famous cause we program worldwide
Let'em recognize from Long Beach to Rosecrans
Bumpin and grindin like a slow jam, it's west side
So you know the row won't bow down to no man
Say what you say
But give me that bomb beat from Dre
Let me serenade the streets of L.A.
From Oakland to Sacktown
The Bay Area and back down
Cali is where they put they mack down
Give me love!
[rpt 1]
[dre] now make it shake...
[rpt 2]
uh, yeah, uh, longbeach in tha house, uh yeah
Oaktown, Oakland definately in tha house hahaha
Frisko, Frisko
[Tupac] hey, you know LA is up in this
Pasadena, where you at
yeah, Inglewood, Inglewood always up to no good
(Tupac) even Hollywood tryin to get a piece baby
Sacramento, sacramento where ya at? yeah
Throw it up y'all, throw it up, Throw it up
Let's show these fools how we do this on that west side
Cause you and I know it's tha best side
yeah, That's riight
west coast, west coast
uh, California Love
California Love
Wednesday, March 05, 2008
capital budgeting
Thought for the day:
Politics involved with spending the entire capital budget
Many managers try to spend their entire capital budget each year and ask for an increase for the following year. In a company with a culture of maximizing shareholder value, managers will return excess funds whenever there is a lack of positive NPV projects, and make a case for expanding the budget when there are multiple positive NPV opportunities.
So I wonder why some people never seem to get their budgeting to work efficiently. Wait what NPV? Some people in important places don't even know what NPV is or how to calculate it. Gosh!
Politics involved with spending the entire capital budget
Many managers try to spend their entire capital budget each year and ask for an increase for the following year. In a company with a culture of maximizing shareholder value, managers will return excess funds whenever there is a lack of positive NPV projects, and make a case for expanding the budget when there are multiple positive NPV opportunities.
So I wonder why some people never seem to get their budgeting to work efficiently. Wait what NPV? Some people in important places don't even know what NPV is or how to calculate it. Gosh!
Monday, March 03, 2008
Down at Fraggle Rock!
Dance your cares away,
Worry's for another day.
Let the music play,
Down at Fraggle Rock.
Work your cares away,
Dancing's for another day.
Let the Fraggles play,
We're Gobo, Mokey, Wembley, Boober, Red.
Worry's for another day.
Let the music play,
Down at Fraggle Rock.
Work your cares away,
Dancing's for another day.
Let the Fraggles play,
We're Gobo, Mokey, Wembley, Boober, Red.
Sunday, March 02, 2008
work
What do we work for? Some people work hard just to make ends meet. They can barely survive, let alone have savings. Other's work for a better tomorrow, to have a happier life and get by more comfortably. Other's work cos its fun, and its kinda cool to get paid having fun. I belong to the latter category I suppose.
It's kinda sad to see friends who work so hard till they are stressed and demoralised. So sad that they don't even wanna work anymore. And yet they aren't really rewarded for their hard work.
They say that labour laws don't allow you to work more than 42 hours a week. But that only refers to manual labour if you read the fine print. Executives can work till the cows come home and nobody cares! Oh, but they say executive can quit anytime he wants mah, can always find another job. yeah right!
At least if you are an investment banker you look forward to hefty bonuses and therefore its worth it to work till 2am every morning. But for government workers? Hell no, its way too much to expect them to work on nights and weekends. Yet quite a few people on msn are working RIGHT now. i feel sad for them.
They say in western countries people never really want to retire. They always want to be working even when they are old. But in Singapore, everyone is working so that they can retire early. Everyone wants to retire, such that the govt has raised its retirement age to prevent this.
Then again, there are a lot of people who sit around the office and do absolutely nothing. nothing except surf the net and shop for golf equipment or something......
sigh. at least i'm hella busy but its not cos of work.....
It's kinda sad to see friends who work so hard till they are stressed and demoralised. So sad that they don't even wanna work anymore. And yet they aren't really rewarded for their hard work.
They say that labour laws don't allow you to work more than 42 hours a week. But that only refers to manual labour if you read the fine print. Executives can work till the cows come home and nobody cares! Oh, but they say executive can quit anytime he wants mah, can always find another job. yeah right!
At least if you are an investment banker you look forward to hefty bonuses and therefore its worth it to work till 2am every morning. But for government workers? Hell no, its way too much to expect them to work on nights and weekends. Yet quite a few people on msn are working RIGHT now. i feel sad for them.
They say in western countries people never really want to retire. They always want to be working even when they are old. But in Singapore, everyone is working so that they can retire early. Everyone wants to retire, such that the govt has raised its retirement age to prevent this.
Then again, there are a lot of people who sit around the office and do absolutely nothing. nothing except surf the net and shop for golf equipment or something......
sigh. at least i'm hella busy but its not cos of work.....
Ouch!
The tigers that lost their roar
Feb 28th 2008 | BANGKOK AND KUALA LUMPUR
From The Economist print edition
Other emerging economies are producing world-class companies by the dozen. Why aren't the countries of South-East Asia?
IT IS easy to forget, now that China and India are all the rage, that until ten years ago South-East Asia was the world's fastest-developing region, winning the sort of investor attention and breathless column inches that the two new giants now enjoy. The region has, slowly, recovered from the blight of 1997-98. It has recently had several years of strong growth (see chart 1) and its governments' finances have been greatly improved. Even so, after all this time the region's five main economies—Indonesia, Malaysia, the Philippines, Singapore and Thailand—are still notable for the near-absence of companies that could truly be called world-class.
The region has 570m people and had a head start in economic development over much of the rest of Asia. So why does it still have no global consumer brands of the stature of South Korea's Samsung and LG? Where are its rising technology leaders, like Taiwan's AU Optronics and Taiwan Semiconductor? Where are its equivalents of India's world-conquering Tata Steel, Ranbaxy and Wipro? Or China's market-devouring Huawei and Lenovo? Ask an investor in London or New York to name globally respected South-East Asian firms and the answer is unlikely to consist of much more than Singapore Airlines.
In a recent book, “Asian Godfathers”, Joe Studwell, a journalist, examines this failure in stark terms. The region's business scene, he says, remains dominated by old-fashioned, mediocre, sprawling conglomerates, run at the whims of ageing patriarchal owners. These firms' core competence, such as it is, is exploiting their cosy connections with governing elites. Their profits come from rent-seeking: being handed generous state contracts and concessions, or using their sway with officialdom to keep potential competitors out. If they need technology, they buy it from abroad. As a result, Mr Studwell says, the region has “no indigenous, large-scale companies producing world-class products and services.”
Similar things were once said of much of the rest of Asia—and sometimes still are. But somehow other countries' top businesses, even in India, the home of the licence Raj, have escaped this mediocrity trap. Whereas the export-led growth of South Korea and Taiwan comes mainly from indigenous firms making globally competitive goods with their own technology, much of South-East Asia's high-value exports are made by foreign companies. Thailand has built a successful motor industry by attracting multinationals. But it will constantly suffer the risk that these will move to somewhere like China, with lower costs and a bigger home market.
Look under the bonnet of what seems to be a well managed, local industrial firm in South-East Asia, such as Astra, an Indonesian carmaker, and you find that it is assembling Japanese cars under licence and is controlled by a Hong Kong group. Not many have got far beyond serving the home market. A recent study by the Boston Consulting Group (BCG) of the 100 largest multinationals from emerging economies (a category that excludes Singapore) contained only five from the whole region. By contrast there were 13 just from Brazil, which has only a third of South-East Asia's population and which until about a decade ago had no genuinely global firms to speak of (see chart 2).
Class distinctions
To be counted as world-class, a firm needs to be more than just well run and large. It should have a globally valued brand, or its own leading-edge technology, or a genuinely innovative and admired business method. These are demanding standards: even some of those in BCG's top 100 are really just plain big. In South-East Asia few companies meet them. Some come close, especially in Singapore, the region's most advanced country. Singapore Airlines is the world's fourth-largest international carrier and is perhaps the region's best-known brand around the world. Keppel and SembCorp, the world's two largest makers of offshore oil drilling-rigs, dominate their industry.
However, some of Singapore's tech stars are showing signs of fading, worries Garry Evans, an equity strategist at HSBC. Chartered Semiconductor and Creative, for example, are slipping behind rivals in places like Taiwan, which now has “a critical mass in technology and a very entrepreneurial culture,” he says.
In banking, the region has some impressive contenders, like Singapore's OCBC and Malaysia's Public Bank, which are expanding beyond their borders. But now these must contend with China's huge and increasingly muscle-flexing banks as well as Western ones with deep roots in the region, such as HSBC and Standard Chartered. As in other types of business, the region's local champions lack scale in a world where critical mass seems to matter ever more.
Admittedly, the region has some natural handicaps. The ten members of the Association of South-East Asian Nations (ASEAN) have a huge variety of languages, religions, political systems and histories. Even the most populous member, Indonesia, with 230m people, is itself enormously diverse, being made up of 17,000 islands and a rainbow assortment of cultural and religious traditions. By comparison, Brazilians may dance the forró in the north and the samba in the south, but theirs is a pretty homogeneous and monolingual country of 190m, all on one land mass.
That said, ASEAN's leaders could do much more to keep their lofty promises of European-style economic integration, to give local companies a sizeable home market from which to build world-beating businesses. Their failure to construct a genuine single market is shown up by the fact that ASEAN's members still do three times as much trade with non-members as they do among themselves. Internal tariffs have been cut, but as McKinsey, a management consultancy, noted in a report in 2004, product standards and other non-tariff barriers often differ among ASEAN countries, forcing manufacturers to make small production runs for each country.
All this lowers the competitiveness of local firms, as well as multinational companies operating in the region. Corruption is another great burden on business. That is true elsewhere in Asia too, but several South-East Asian countries—notably Indonesia—are afflicted by corrupt and unreliable judicial systems, making it difficult to enforce contracts.
Dicing with relegation
Although it is hard to generalise across Asia, another obstacle to developing world-class businesses is that the five main South-East Asian economies do worse than might be expected—that is, relative to their national incomes—in promoting technology and higher education. Tony Fernandes, the boss of AirAsia, a fast-expanding Malaysian airline and a contender for the “world-class” label, laments how South Korea, where the government has pumped money into research and training, has left his country trailing in so many ways. “We used to beat them at football—not now,” he groans.
Malaysia has also spent heavily on universities and the promotion of technology but its efforts have been stymied by the country's messy racial politics (including preferential university places for the Malay majority) and by the handing of state contracts and concessions to undeserving government cronies. Both the lack of fair competition between businesses and the failure to widen access to education may have a common underlying cause: that South-East Asian countries remain in the grip of narrow elites.
The problem betrays itself not just in the region's relative lack of memorable business names but in its basic economic statistics—in particular, labour productivity, the key to long-term growth. Productivity in China and India is growing much faster than South-East Asia's is. East Asia overtook the region in output per worker by 2000 and has continued to power ahead. Now South Asia is closing the gap (see chart 3). Not even hosting the factories of so many sophisticated multinationals seems to have made much difference to South-East Asia. With all those Indian and Chinese pairs of hands joining the global workforce, the region has no option but to seek to move beyond simply offering low wage costs and produce better-educated workers and more innovation.
It is not all the fault of governments. The region's unwieldy conglomerates could do more to help themselves achieve global scale by concentrating on fewer businesses. Some are doing so, but others still seem unable to resist poking their fingers into another pie. The food-and-drink arm of Charoen Pokphand, a Thai conglomerate, is in BCG's top 100; but the group is an unspectacular contender in industries from telecoms to convenience stores and is now moving into carmaking. San Miguel of the Philippines, a big beer-to-food conglomerate, recently talked of trying its hand at generating electricity. Synergy Drive, the absurdly named merger of three underperforming plantation firms controlled by the Malaysian government, is taking a stake in the giant Bakun hydro-dam in Borneo.
This dilettantism was once summed up damningly by Michael Porter, of Harvard Business School: “These companies don't have strategies, they do deals.” Gerry Ambrose in the Kuala Lumpur office of Aberdeen Asset Management laments that it is indeed hard to find Malaysian companies with “a business plan that will last ten years”. Many firms have improved their profitability since the 1997-98 crisis but that may not guarantee their long-term survival. Because even the best-run firms often have boards and shareholder lists dominated by the founding family and their friends, it is hard to believe that their thinking will change.
Of the “godfatherish” firms profiled in Mr Studwell's book, one that analysts say is among the best performers is YTL, a Malaysian conglomerate. Big in construction, the firm also owns a British water firm, Wessex Water, operates hotels and upmarket shopping malls, runs a high-speed rail link from central Kuala Lumpur to the city's airport and owns a chain of power stations. Its founder, Yeoh Tiong Lay, built a giant construction business with state contracts in the country's early post-independence period. In the 1990s, when his friend Mahathir Mohamad was prime minister, the firm got concessions to generate electricity using subsidised gas from the state oil firm, which the state electricity firm was obliged to buy.
Nice work if you can get it. But the founder's son, Francis Yeoh, who now runs the firm, insists that it has not just rested on its laurels. It has delivered, he argues, “a 55% annual compound growth in profits” since the mid-1980s and it now earns 70% of its revenues outside Malaysia. On February 22nd it declared a profit for the six months to December 31st of 688m ringgit ($202m), 24% more than a year before. The firm does have a core competence, says Mr Yeoh, which is to build and maintain infrastructure assets of first-world quality at third-world prices. Even the group's hotels and shopping malls should be seen as “unregulated infrastructure”, he argues, stretching the point somewhat.
As Asia continues to grow vertiginously, it will need a lot more infrastructure, regulated or not, and YTL, says Mr Yeoh, has shown it can provide it. In particular, he foresees juicy contracts from applying Wessex Water's skills at cleaning up rivers to the continent's murky waterways. This indeed sounds like a promising growth business. But there will be others—not least some sizeable Chinese water-treatment firms—which will be after those same contracts. So far Wessex Water is making decent profits in western England, but its potential to become a global leader is untested.
Hitherto, Malaysian companies have had a remarkable record of picking duds when they buy foreign firms. Laura Ashley, a fashion designer; Costain, a builder; Lec, a fridgemaker; and Agusta, a motorbike-maker: all were bought by Malaysian firms with less than glorious outcomes. Even so, if they continue to improve, YTL and the region's other conglomerates may yet break the mould. Other Asian world-beaters also began as divisions of sprawling, family-run groups but eventually escaped their orbit sufficiently to thrive. An executive at India's globally expanding Tata Steel, for instance, says that Tata Sons, from which it sprang, maintains its minority stake in the firm but these days leaves it to be run by professional managers.
Another hopeful sign for South-East Asia's corporate future is that it seems to be getting easier for those outside the closed circle of the politically well-connected to set up new businesses and challenge the incumbents. Mr Fernandes's AirAsia is the prime example. Started only six years ago, the airline now criss-crosses the region with a huge network of low-cost flights. Mr Fernandes, a former music-industry man, is still frantically adding routes: he expects to be allowed to start domestic flights in the Philippines and Vietnam soon. He has started a separate, low-cost, long-haul airline, AirAsiaX, which is flying from Kuala Lumpur to Gold Coast airport in Australia and Hangzhou near Shanghai. Flights to Melbourne, Amritsar and eventually London are on the way.
Though ASEAN has been slow to lower its barriers in some areas, in aviation they are coming down. Singapore and Malaysian Airlines' duopoly on the Kuala Lumpur-Singapore route has just been scrapped and, says Mr Fernandes, incumbent firms across the region are finding that their home governments are no longer protecting them. It could be said that, by linking the region's cities with cheap and frequent flights, Mr Fernandes has done more to turn South-East Asia into an integrated economic block than any ASEAN ministerial summit. In other once-coddled industries, too, governments are starting to dismantle monopolies. YTL's Mr Yeoh says there will soon be “no hiding place” for firms trying to live from old-fashioned rent-seeking.
The rise of China and India, with their huge home markets, may mean that it is too late for South-East Asia to become big in manufacturing. But it does still have the prospect of producing world-leading firms in other areas where it has an edge. Tourism and hospitality are obvious examples, especially as the region's neighbours become richer. South-East Asia could become both “the Mediterranean and the Caribbean of Asia”, enthuses YTL's Mr Yeoh.
Playing to your strengths
Apart from YTL, well regarded companies that could use tourism growth as a springboard to global greatness include hotel groups such as Singapore's Banyan Tree, casino operators like Malaysia's Genting and even hospital firms like Thailand's Bumrungrad, a growing competitor in “medical tourism”. However, as HSBC's Mr Evans points out, such firms have yet to demonstrate that they can transfer their vaunted “service mentality” to other parts of the world that do not have an abundance of cheap labour.
Natural resources are another promising source of future world-beaters. Following Brazil and, closer to home, Australia, South-East Asia is beginning to build global businesses by making the most of what nature has provided. Palm oil, of which most of the world's supply comes from Malaysia and Indonesia, is one example. Some plantation firms are simply hitching a ride on the boom in prices but IOI, a Malaysian plantation owner, is about 50% more efficient in terms of yield per hectare than its local rivals. If the government could push Synergy Drive, its new behemoth, to the same level of productivity, it would boost the economy.
The region already dominates some types of agricultural produce: Thailand and Vietnam are the world's two largest rice exporters, for example. Since the region has so much coastline and so many rivers, there is much scope for expanding fish-farming and seafood production. Thai Union, a giant tuna-packer, is already in BCG's top 100. Vietnam, the region's rising star, has several big seafood firms which, if they can resist the regionwide scourge of diversification, may one day reach similar heights. But to make the most of its fertile land and waters, the region needs more sophisticated food-processing industries and stronger brands, instead of exporting bulk commodities.
The reasons why South-East Asia has been slower than other regions to produce world-class businesses are complex and open to debate. But they do seem to be linked to the perseverance of narrow elites and to the countries' sluggishness in overcoming old rivalries and building an integrated regional market. As a handful of promising companies are showing, not all is lost. Even in today's fierce jungle, South-East Asia can still breed tigers.
Feb 28th 2008 | BANGKOK AND KUALA LUMPUR
From The Economist print edition
Other emerging economies are producing world-class companies by the dozen. Why aren't the countries of South-East Asia?
IT IS easy to forget, now that China and India are all the rage, that until ten years ago South-East Asia was the world's fastest-developing region, winning the sort of investor attention and breathless column inches that the two new giants now enjoy. The region has, slowly, recovered from the blight of 1997-98. It has recently had several years of strong growth (see chart 1) and its governments' finances have been greatly improved. Even so, after all this time the region's five main economies—Indonesia, Malaysia, the Philippines, Singapore and Thailand—are still notable for the near-absence of companies that could truly be called world-class.
The region has 570m people and had a head start in economic development over much of the rest of Asia. So why does it still have no global consumer brands of the stature of South Korea's Samsung and LG? Where are its rising technology leaders, like Taiwan's AU Optronics and Taiwan Semiconductor? Where are its equivalents of India's world-conquering Tata Steel, Ranbaxy and Wipro? Or China's market-devouring Huawei and Lenovo? Ask an investor in London or New York to name globally respected South-East Asian firms and the answer is unlikely to consist of much more than Singapore Airlines.
In a recent book, “Asian Godfathers”, Joe Studwell, a journalist, examines this failure in stark terms. The region's business scene, he says, remains dominated by old-fashioned, mediocre, sprawling conglomerates, run at the whims of ageing patriarchal owners. These firms' core competence, such as it is, is exploiting their cosy connections with governing elites. Their profits come from rent-seeking: being handed generous state contracts and concessions, or using their sway with officialdom to keep potential competitors out. If they need technology, they buy it from abroad. As a result, Mr Studwell says, the region has “no indigenous, large-scale companies producing world-class products and services.”
Similar things were once said of much of the rest of Asia—and sometimes still are. But somehow other countries' top businesses, even in India, the home of the licence Raj, have escaped this mediocrity trap. Whereas the export-led growth of South Korea and Taiwan comes mainly from indigenous firms making globally competitive goods with their own technology, much of South-East Asia's high-value exports are made by foreign companies. Thailand has built a successful motor industry by attracting multinationals. But it will constantly suffer the risk that these will move to somewhere like China, with lower costs and a bigger home market.
Look under the bonnet of what seems to be a well managed, local industrial firm in South-East Asia, such as Astra, an Indonesian carmaker, and you find that it is assembling Japanese cars under licence and is controlled by a Hong Kong group. Not many have got far beyond serving the home market. A recent study by the Boston Consulting Group (BCG) of the 100 largest multinationals from emerging economies (a category that excludes Singapore) contained only five from the whole region. By contrast there were 13 just from Brazil, which has only a third of South-East Asia's population and which until about a decade ago had no genuinely global firms to speak of (see chart 2).
Class distinctions
To be counted as world-class, a firm needs to be more than just well run and large. It should have a globally valued brand, or its own leading-edge technology, or a genuinely innovative and admired business method. These are demanding standards: even some of those in BCG's top 100 are really just plain big. In South-East Asia few companies meet them. Some come close, especially in Singapore, the region's most advanced country. Singapore Airlines is the world's fourth-largest international carrier and is perhaps the region's best-known brand around the world. Keppel and SembCorp, the world's two largest makers of offshore oil drilling-rigs, dominate their industry.
However, some of Singapore's tech stars are showing signs of fading, worries Garry Evans, an equity strategist at HSBC. Chartered Semiconductor and Creative, for example, are slipping behind rivals in places like Taiwan, which now has “a critical mass in technology and a very entrepreneurial culture,” he says.
In banking, the region has some impressive contenders, like Singapore's OCBC and Malaysia's Public Bank, which are expanding beyond their borders. But now these must contend with China's huge and increasingly muscle-flexing banks as well as Western ones with deep roots in the region, such as HSBC and Standard Chartered. As in other types of business, the region's local champions lack scale in a world where critical mass seems to matter ever more.
Admittedly, the region has some natural handicaps. The ten members of the Association of South-East Asian Nations (ASEAN) have a huge variety of languages, religions, political systems and histories. Even the most populous member, Indonesia, with 230m people, is itself enormously diverse, being made up of 17,000 islands and a rainbow assortment of cultural and religious traditions. By comparison, Brazilians may dance the forró in the north and the samba in the south, but theirs is a pretty homogeneous and monolingual country of 190m, all on one land mass.
That said, ASEAN's leaders could do much more to keep their lofty promises of European-style economic integration, to give local companies a sizeable home market from which to build world-beating businesses. Their failure to construct a genuine single market is shown up by the fact that ASEAN's members still do three times as much trade with non-members as they do among themselves. Internal tariffs have been cut, but as McKinsey, a management consultancy, noted in a report in 2004, product standards and other non-tariff barriers often differ among ASEAN countries, forcing manufacturers to make small production runs for each country.
All this lowers the competitiveness of local firms, as well as multinational companies operating in the region. Corruption is another great burden on business. That is true elsewhere in Asia too, but several South-East Asian countries—notably Indonesia—are afflicted by corrupt and unreliable judicial systems, making it difficult to enforce contracts.
Dicing with relegation
Although it is hard to generalise across Asia, another obstacle to developing world-class businesses is that the five main South-East Asian economies do worse than might be expected—that is, relative to their national incomes—in promoting technology and higher education. Tony Fernandes, the boss of AirAsia, a fast-expanding Malaysian airline and a contender for the “world-class” label, laments how South Korea, where the government has pumped money into research and training, has left his country trailing in so many ways. “We used to beat them at football—not now,” he groans.
Malaysia has also spent heavily on universities and the promotion of technology but its efforts have been stymied by the country's messy racial politics (including preferential university places for the Malay majority) and by the handing of state contracts and concessions to undeserving government cronies. Both the lack of fair competition between businesses and the failure to widen access to education may have a common underlying cause: that South-East Asian countries remain in the grip of narrow elites.
The problem betrays itself not just in the region's relative lack of memorable business names but in its basic economic statistics—in particular, labour productivity, the key to long-term growth. Productivity in China and India is growing much faster than South-East Asia's is. East Asia overtook the region in output per worker by 2000 and has continued to power ahead. Now South Asia is closing the gap (see chart 3). Not even hosting the factories of so many sophisticated multinationals seems to have made much difference to South-East Asia. With all those Indian and Chinese pairs of hands joining the global workforce, the region has no option but to seek to move beyond simply offering low wage costs and produce better-educated workers and more innovation.
It is not all the fault of governments. The region's unwieldy conglomerates could do more to help themselves achieve global scale by concentrating on fewer businesses. Some are doing so, but others still seem unable to resist poking their fingers into another pie. The food-and-drink arm of Charoen Pokphand, a Thai conglomerate, is in BCG's top 100; but the group is an unspectacular contender in industries from telecoms to convenience stores and is now moving into carmaking. San Miguel of the Philippines, a big beer-to-food conglomerate, recently talked of trying its hand at generating electricity. Synergy Drive, the absurdly named merger of three underperforming plantation firms controlled by the Malaysian government, is taking a stake in the giant Bakun hydro-dam in Borneo.
This dilettantism was once summed up damningly by Michael Porter, of Harvard Business School: “These companies don't have strategies, they do deals.” Gerry Ambrose in the Kuala Lumpur office of Aberdeen Asset Management laments that it is indeed hard to find Malaysian companies with “a business plan that will last ten years”. Many firms have improved their profitability since the 1997-98 crisis but that may not guarantee their long-term survival. Because even the best-run firms often have boards and shareholder lists dominated by the founding family and their friends, it is hard to believe that their thinking will change.
Of the “godfatherish” firms profiled in Mr Studwell's book, one that analysts say is among the best performers is YTL, a Malaysian conglomerate. Big in construction, the firm also owns a British water firm, Wessex Water, operates hotels and upmarket shopping malls, runs a high-speed rail link from central Kuala Lumpur to the city's airport and owns a chain of power stations. Its founder, Yeoh Tiong Lay, built a giant construction business with state contracts in the country's early post-independence period. In the 1990s, when his friend Mahathir Mohamad was prime minister, the firm got concessions to generate electricity using subsidised gas from the state oil firm, which the state electricity firm was obliged to buy.
Nice work if you can get it. But the founder's son, Francis Yeoh, who now runs the firm, insists that it has not just rested on its laurels. It has delivered, he argues, “a 55% annual compound growth in profits” since the mid-1980s and it now earns 70% of its revenues outside Malaysia. On February 22nd it declared a profit for the six months to December 31st of 688m ringgit ($202m), 24% more than a year before. The firm does have a core competence, says Mr Yeoh, which is to build and maintain infrastructure assets of first-world quality at third-world prices. Even the group's hotels and shopping malls should be seen as “unregulated infrastructure”, he argues, stretching the point somewhat.
As Asia continues to grow vertiginously, it will need a lot more infrastructure, regulated or not, and YTL, says Mr Yeoh, has shown it can provide it. In particular, he foresees juicy contracts from applying Wessex Water's skills at cleaning up rivers to the continent's murky waterways. This indeed sounds like a promising growth business. But there will be others—not least some sizeable Chinese water-treatment firms—which will be after those same contracts. So far Wessex Water is making decent profits in western England, but its potential to become a global leader is untested.
Hitherto, Malaysian companies have had a remarkable record of picking duds when they buy foreign firms. Laura Ashley, a fashion designer; Costain, a builder; Lec, a fridgemaker; and Agusta, a motorbike-maker: all were bought by Malaysian firms with less than glorious outcomes. Even so, if they continue to improve, YTL and the region's other conglomerates may yet break the mould. Other Asian world-beaters also began as divisions of sprawling, family-run groups but eventually escaped their orbit sufficiently to thrive. An executive at India's globally expanding Tata Steel, for instance, says that Tata Sons, from which it sprang, maintains its minority stake in the firm but these days leaves it to be run by professional managers.
Another hopeful sign for South-East Asia's corporate future is that it seems to be getting easier for those outside the closed circle of the politically well-connected to set up new businesses and challenge the incumbents. Mr Fernandes's AirAsia is the prime example. Started only six years ago, the airline now criss-crosses the region with a huge network of low-cost flights. Mr Fernandes, a former music-industry man, is still frantically adding routes: he expects to be allowed to start domestic flights in the Philippines and Vietnam soon. He has started a separate, low-cost, long-haul airline, AirAsiaX, which is flying from Kuala Lumpur to Gold Coast airport in Australia and Hangzhou near Shanghai. Flights to Melbourne, Amritsar and eventually London are on the way.
Though ASEAN has been slow to lower its barriers in some areas, in aviation they are coming down. Singapore and Malaysian Airlines' duopoly on the Kuala Lumpur-Singapore route has just been scrapped and, says Mr Fernandes, incumbent firms across the region are finding that their home governments are no longer protecting them. It could be said that, by linking the region's cities with cheap and frequent flights, Mr Fernandes has done more to turn South-East Asia into an integrated economic block than any ASEAN ministerial summit. In other once-coddled industries, too, governments are starting to dismantle monopolies. YTL's Mr Yeoh says there will soon be “no hiding place” for firms trying to live from old-fashioned rent-seeking.
The rise of China and India, with their huge home markets, may mean that it is too late for South-East Asia to become big in manufacturing. But it does still have the prospect of producing world-leading firms in other areas where it has an edge. Tourism and hospitality are obvious examples, especially as the region's neighbours become richer. South-East Asia could become both “the Mediterranean and the Caribbean of Asia”, enthuses YTL's Mr Yeoh.
Playing to your strengths
Apart from YTL, well regarded companies that could use tourism growth as a springboard to global greatness include hotel groups such as Singapore's Banyan Tree, casino operators like Malaysia's Genting and even hospital firms like Thailand's Bumrungrad, a growing competitor in “medical tourism”. However, as HSBC's Mr Evans points out, such firms have yet to demonstrate that they can transfer their vaunted “service mentality” to other parts of the world that do not have an abundance of cheap labour.
Natural resources are another promising source of future world-beaters. Following Brazil and, closer to home, Australia, South-East Asia is beginning to build global businesses by making the most of what nature has provided. Palm oil, of which most of the world's supply comes from Malaysia and Indonesia, is one example. Some plantation firms are simply hitching a ride on the boom in prices but IOI, a Malaysian plantation owner, is about 50% more efficient in terms of yield per hectare than its local rivals. If the government could push Synergy Drive, its new behemoth, to the same level of productivity, it would boost the economy.
The region already dominates some types of agricultural produce: Thailand and Vietnam are the world's two largest rice exporters, for example. Since the region has so much coastline and so many rivers, there is much scope for expanding fish-farming and seafood production. Thai Union, a giant tuna-packer, is already in BCG's top 100. Vietnam, the region's rising star, has several big seafood firms which, if they can resist the regionwide scourge of diversification, may one day reach similar heights. But to make the most of its fertile land and waters, the region needs more sophisticated food-processing industries and stronger brands, instead of exporting bulk commodities.
The reasons why South-East Asia has been slower than other regions to produce world-class businesses are complex and open to debate. But they do seem to be linked to the perseverance of narrow elites and to the countries' sluggishness in overcoming old rivalries and building an integrated regional market. As a handful of promising companies are showing, not all is lost. Even in today's fierce jungle, South-East Asia can still breed tigers.
Bizarre! only in china....
On the fake take
Feb 28th 2008 | HONG KONG
From The Economist print edition
A Chinese gang is charged with printing $147 billion in fake receipts
THE sums are impressive by any standards. Had it been uncovered five years ago, the scam would have amounted to nearly 10% of China's GDP at the time. It is equal in value to Google's stockmarket capitalisation today. In what is being described as the biggest scandal of its kind since 1949, four men pleaded guilty in a court in Yunnan on February 22nd to producing bogus receipts valued at 1.05 trillion yuan ($147 billion). These could have denied the tax authorities more than 75 billion yuan in revenues. A fifth suspect will stand trial in a separate case.
The scam, operating in nine provinces, was based in Guizhou. In all, more than 1m fake receipts were found, ready for shipping to Kunming, Yunnan's capital, where they were to have been distributed and sold in China's larger cities. Two lorries were needed to carry them away. According to the tax authorities, the fake receipts were indistinguishable from the real thing.
The business was discovered by accident last August when police searched a bus and found 128,300 fake receipts worth 18.7m yuan. Investigations over the next few days led them to a factory where they found a further 400,000 receipts worth over 600 billion yuan, as well as various computers and scanners. Over the following six months they arrested suspects in several other provinces. Between them they were found to have almost another 200 billion yuan in copied sales slips in their possession.
Although this is a particularly large haul, the practice of printing fake invoices and receipts is widespread in China. Indeed, it is one of the country's boom industries. In 2007 almost 3,000 cases were uncovered, involving more than 10m fake receipts and at least 100 printing facilities. In January the government ordered a crackdown. The State Administration of Taxation has since been issuing public warnings through state broadcasters and via mobile-phone text messages.
Companies buy the receipts to offset their tax bills. Individuals buy them to fake their expense claims. But such practices are not just about cutting tax bills or fleecing employers. Bogus certificates, business letters, receipts and invoices allow companies and individuals to produce fake business accounts or make a wide range of other false claims.
Four men also appeared in a Shenzhen court this week charged with using forged documents in an attempt to withdraw 80m yuan from Shanghai Pudong Development Bank. Similarly, in Fujian the boss of Aoxing Biotech was arrested this week for creating a company that he had claimed was listed on the NASDAQ exchange in New York and had 50m yuan in assets. The true value of the business appears to have been only 500,000 yuan. But through the alleged hoax, he successfully managed to extract more than 3m yuan from 100 investors.
It is well known that Chinese companies often keep several sets of books. Yet the creation of entirely fictitious transactions, which can fool even the careful eyes of auditors and tax officials, suggests that investors need to be especially wary about where they put their money. Buyer—and tax man—beware.
Feb 28th 2008 | HONG KONG
From The Economist print edition
A Chinese gang is charged with printing $147 billion in fake receipts
THE sums are impressive by any standards. Had it been uncovered five years ago, the scam would have amounted to nearly 10% of China's GDP at the time. It is equal in value to Google's stockmarket capitalisation today. In what is being described as the biggest scandal of its kind since 1949, four men pleaded guilty in a court in Yunnan on February 22nd to producing bogus receipts valued at 1.05 trillion yuan ($147 billion). These could have denied the tax authorities more than 75 billion yuan in revenues. A fifth suspect will stand trial in a separate case.
The scam, operating in nine provinces, was based in Guizhou. In all, more than 1m fake receipts were found, ready for shipping to Kunming, Yunnan's capital, where they were to have been distributed and sold in China's larger cities. Two lorries were needed to carry them away. According to the tax authorities, the fake receipts were indistinguishable from the real thing.
The business was discovered by accident last August when police searched a bus and found 128,300 fake receipts worth 18.7m yuan. Investigations over the next few days led them to a factory where they found a further 400,000 receipts worth over 600 billion yuan, as well as various computers and scanners. Over the following six months they arrested suspects in several other provinces. Between them they were found to have almost another 200 billion yuan in copied sales slips in their possession.
Although this is a particularly large haul, the practice of printing fake invoices and receipts is widespread in China. Indeed, it is one of the country's boom industries. In 2007 almost 3,000 cases were uncovered, involving more than 10m fake receipts and at least 100 printing facilities. In January the government ordered a crackdown. The State Administration of Taxation has since been issuing public warnings through state broadcasters and via mobile-phone text messages.
Companies buy the receipts to offset their tax bills. Individuals buy them to fake their expense claims. But such practices are not just about cutting tax bills or fleecing employers. Bogus certificates, business letters, receipts and invoices allow companies and individuals to produce fake business accounts or make a wide range of other false claims.
Four men also appeared in a Shenzhen court this week charged with using forged documents in an attempt to withdraw 80m yuan from Shanghai Pudong Development Bank. Similarly, in Fujian the boss of Aoxing Biotech was arrested this week for creating a company that he had claimed was listed on the NASDAQ exchange in New York and had 50m yuan in assets. The true value of the business appears to have been only 500,000 yuan. But through the alleged hoax, he successfully managed to extract more than 3m yuan from 100 investors.
It is well known that Chinese companies often keep several sets of books. Yet the creation of entirely fictitious transactions, which can fool even the careful eyes of auditors and tax officials, suggests that investors need to be especially wary about where they put their money. Buyer—and tax man—beware.
plenty of alternatives (got my economist back!)
Plenty of alternatives
Feb 28th 2008
From The Economist print edition
But hedge funds and private equity have their limits
THE stockmarket is a hard taskmaster. Beating the indices on a regular basis is difficult, and low-fee rivals are competing ever more vigorously. But the fund-management industry has found a new wonder weapon: alternative assets. What makes these special, the industry claims, is that they are not correlated with the stockmarket. They are also difficult to understand, so they require greater skills to manage—which have to be properly rewarded.
That explains why, even as ETFs are driving fees on big stockmarket funds down to a few basis points a year, the managers of the main alternative-asset categories—hedge funds and private equity—are able to charge two percentage points a year, with a performance fee on top. And clients are queuing up to pay them.
Why are they so enthusiastic? The reason goes back to mistakes made in the 1990s. The long bull market encouraged the belief that share prices could move only upwards, and investors who did not have a big allocation to equities looked foolish. Corporate-pension sponsors were able to put 80-90% of their portfolios into shares and then stop making contributions to the fund, on the assumption that juicy returns would continue.
The 2000-02 bear market revealed what an unwise bet that had been. To compound the problems of pension funds as their assets fell with the stockmarket, their liabilities rose because of the drop in bond yields, which made it much more expensive to purchase the income needed to pay pensioners. So the pension funds (and their advisers) decided to broaden their bets and reduce their risks.
One big change was to put more emphasis on alpha, the skill of the manager (see article). But funds also started to widen their range of assets, in the hope of earning a more stable return. The models for this were the university endowments of Yale and Harvard, which started moving into alternative assets in the 1970s and 1980s and have enjoyed considerable success with them. Morse's Mr Connor sees this as an extension of his music analogy: “The industry has expanded from having a limited number of genres into a wide range, from hip hop to garage, thrash metal and the rest.”
However, the move has not been without controversy. It seems plausible that emerging-market debt, property and commodities are genuine alternatives to the traditional staples of developed-market equities and government bonds. But are private equity and hedge funds really in the same category?
Private equity and its close cousin, venture capital (which concentrates on start-ups), invest in businesses that are not quoted on the stockmarket. The idea is that companies will be able to produce better returns if they are protected from the glare of constant public scrutiny and if the managers are given suitable incentives. This usually means offering them share options and loading the company up with debt, forcing managers to pay meticulous attention to their cashflow. These takeovers, also known as leveraged buy-outs, have become a big influence on stockmarkets. But is private equity really an alternative source of return? After all, most of the factors that affect quoted companies—the health of the economy, interest rates—affect private companies as well.
This is also true of hedge funds. These private pools of capital may be run in a different way from traditional funds—for example, they can go short (bet on falling prices) and use borrowed money to enhance returns. But hedge funds still mostly invest in the same types of assets—equities and bonds—as traditional fund managers.
Most hedge funds are alternative only in the way they are managed, rather than where they invest. Because of their methods, they claim to produce “absolute return”—in other words, a nominal gain regardless of market conditions. By contrast, traditional fund managers might think they have done well if they lose 17% when the index has dropped by 20%.
The short answer
Hedge funds can pull off this trick thanks to their greater flexibility, in particular their ability to go short. The worst year for the industry was 2002, when the Hedge Fund Research Index lost just 1.5% (although these indices may flatter, thanks to survivorship bias). Enthusiasts would also argue that if you believe in managers' skill, you should give them as much freedom as possible. Most companies have a tiny weighting in the index. A traditional manager who takes a dislike to a stock can only give it a zero weighting, which will make virtually no difference to performance. But a hedge-fund manager can make a much bigger bet by selling the stock short.
It sounds good in theory, but in practice shorting is very difficult. A long position that goes wrong becomes a smaller part of the portfolio; a short position becomes larger. And where hedge-fund managers use borrowed money, bad bets can be disastrous, as shown by the closure of Amaranth, an energy-trading fund, in 2006 and two Bear Stearns credit funds in 2007.
Even if some hedge-fund managers have special skills, can the industry continue to deliver exceptional returns as it gets bigger? Its assets increased from $39 billion in 1990 to $1.9 trillion by the end of last year (see chart 5). Allowing for the use of borrowed money, McKinsey estimates that total assets under management may be $6 trillion. If the skill of hedge-fund managers consists of exploiting market anomalies, there must surely be fewer anomalies to go around now. The result may be high fees for hedge-fund managers but modest returns for clients, or worse. “Hedge funds are rapidly deteriorating in quality. There is a nasty accident waiting to happen,” says Jeremy Grantham of GMO, a fund-management group.
The same arguments can be applied to private equity. If lots of people are competing to do private deals, that is likely to force up the price of deals and cut the level of future returns. According to McKinsey, the amount of private-equity capital increased by 120% between 2000 and the end of 2006 (see chart 6); including venture capital, the sector's total assets add up to over $1 trillion. “So much money has flowed into private equity, venture capital and hedge funds that it has swamped the available talent,” says Mr Grantham.
McKinsey reckons that 62% of American private-equity assets in 2006 were in the hands of the top 20 firms. This is not surprising: the top 25% of funds seem consistently to beat the rest. If anything, it is surprising there has not been more consolidation, given the lacklustre performance of the rest of the industry. The average investor in private equity has not seen particularly attractive returns compared with those available in the public market.
And those returns may be about to deteriorate. The most recent leveraged-buy-out boom ended with many firms collapsing in the early 1990s recession. Mr Grantham fears history may repeat itself. “Private equity has a long tradition of adding value, but there is one issue they have all missed,” he says. “Not a single firm has in its spreadsheet the expectation that profit margins have to come down.”
The move into both hedge funds and private equity involves a paradox. For an asset class to be a true diversifier, it needs to be small; but if it is small, then few investors can be exposed to it. When lots of capital flows into an asset class, it starts to behave like other markets. The recent problems in the British commercial-property market are a good example. Retail investors flocked into the sector as a diversifier from equities, and in the ten years to 2006 it performed brilliantly. But property is an illiquid asset. When prices started to fall last year, investors rushed to redeem their holdings. But it was impossible for the funds to realise on their properties in such short order, so many of them have been forced to suspend dealings in their shares and units. The asset class was simply not liquid enough to be a real diversifier for so many investors.
That has not stopped investors from looking for diversified returns elsewhere. In the second half of 2007 the truly hot areas were “frontier markets”, or what might be called the “emerging emerging markets”. The hope is that countries such as Kazakhstan and Vietnam will eventually achieve the same sort of growth rates as India and China.
Fund managers are also offering even more esoteric bets, known as “exotic beta”. Assets in this class include weather derivatives, distressed power stations and even footballers' contracts. The attraction is twofold. First, these asset classes are so remote from the forces that drive the S&P 500 index that any correlation is unlikely. Second, prices in this market may be set inefficiently, offering scope for astute fund managers to make money. At least that is what exotic-beta fund managers tell their clients to justify their fees.
Feb 28th 2008
From The Economist print edition
But hedge funds and private equity have their limits
THE stockmarket is a hard taskmaster. Beating the indices on a regular basis is difficult, and low-fee rivals are competing ever more vigorously. But the fund-management industry has found a new wonder weapon: alternative assets. What makes these special, the industry claims, is that they are not correlated with the stockmarket. They are also difficult to understand, so they require greater skills to manage—which have to be properly rewarded.
That explains why, even as ETFs are driving fees on big stockmarket funds down to a few basis points a year, the managers of the main alternative-asset categories—hedge funds and private equity—are able to charge two percentage points a year, with a performance fee on top. And clients are queuing up to pay them.
Why are they so enthusiastic? The reason goes back to mistakes made in the 1990s. The long bull market encouraged the belief that share prices could move only upwards, and investors who did not have a big allocation to equities looked foolish. Corporate-pension sponsors were able to put 80-90% of their portfolios into shares and then stop making contributions to the fund, on the assumption that juicy returns would continue.
The 2000-02 bear market revealed what an unwise bet that had been. To compound the problems of pension funds as their assets fell with the stockmarket, their liabilities rose because of the drop in bond yields, which made it much more expensive to purchase the income needed to pay pensioners. So the pension funds (and their advisers) decided to broaden their bets and reduce their risks.
One big change was to put more emphasis on alpha, the skill of the manager (see article). But funds also started to widen their range of assets, in the hope of earning a more stable return. The models for this were the university endowments of Yale and Harvard, which started moving into alternative assets in the 1970s and 1980s and have enjoyed considerable success with them. Morse's Mr Connor sees this as an extension of his music analogy: “The industry has expanded from having a limited number of genres into a wide range, from hip hop to garage, thrash metal and the rest.”
However, the move has not been without controversy. It seems plausible that emerging-market debt, property and commodities are genuine alternatives to the traditional staples of developed-market equities and government bonds. But are private equity and hedge funds really in the same category?
Private equity and its close cousin, venture capital (which concentrates on start-ups), invest in businesses that are not quoted on the stockmarket. The idea is that companies will be able to produce better returns if they are protected from the glare of constant public scrutiny and if the managers are given suitable incentives. This usually means offering them share options and loading the company up with debt, forcing managers to pay meticulous attention to their cashflow. These takeovers, also known as leveraged buy-outs, have become a big influence on stockmarkets. But is private equity really an alternative source of return? After all, most of the factors that affect quoted companies—the health of the economy, interest rates—affect private companies as well.
This is also true of hedge funds. These private pools of capital may be run in a different way from traditional funds—for example, they can go short (bet on falling prices) and use borrowed money to enhance returns. But hedge funds still mostly invest in the same types of assets—equities and bonds—as traditional fund managers.
Most hedge funds are alternative only in the way they are managed, rather than where they invest. Because of their methods, they claim to produce “absolute return”—in other words, a nominal gain regardless of market conditions. By contrast, traditional fund managers might think they have done well if they lose 17% when the index has dropped by 20%.
The short answer
Hedge funds can pull off this trick thanks to their greater flexibility, in particular their ability to go short. The worst year for the industry was 2002, when the Hedge Fund Research Index lost just 1.5% (although these indices may flatter, thanks to survivorship bias). Enthusiasts would also argue that if you believe in managers' skill, you should give them as much freedom as possible. Most companies have a tiny weighting in the index. A traditional manager who takes a dislike to a stock can only give it a zero weighting, which will make virtually no difference to performance. But a hedge-fund manager can make a much bigger bet by selling the stock short.
It sounds good in theory, but in practice shorting is very difficult. A long position that goes wrong becomes a smaller part of the portfolio; a short position becomes larger. And where hedge-fund managers use borrowed money, bad bets can be disastrous, as shown by the closure of Amaranth, an energy-trading fund, in 2006 and two Bear Stearns credit funds in 2007.
Even if some hedge-fund managers have special skills, can the industry continue to deliver exceptional returns as it gets bigger? Its assets increased from $39 billion in 1990 to $1.9 trillion by the end of last year (see chart 5). Allowing for the use of borrowed money, McKinsey estimates that total assets under management may be $6 trillion. If the skill of hedge-fund managers consists of exploiting market anomalies, there must surely be fewer anomalies to go around now. The result may be high fees for hedge-fund managers but modest returns for clients, or worse. “Hedge funds are rapidly deteriorating in quality. There is a nasty accident waiting to happen,” says Jeremy Grantham of GMO, a fund-management group.
The same arguments can be applied to private equity. If lots of people are competing to do private deals, that is likely to force up the price of deals and cut the level of future returns. According to McKinsey, the amount of private-equity capital increased by 120% between 2000 and the end of 2006 (see chart 6); including venture capital, the sector's total assets add up to over $1 trillion. “So much money has flowed into private equity, venture capital and hedge funds that it has swamped the available talent,” says Mr Grantham.
McKinsey reckons that 62% of American private-equity assets in 2006 were in the hands of the top 20 firms. This is not surprising: the top 25% of funds seem consistently to beat the rest. If anything, it is surprising there has not been more consolidation, given the lacklustre performance of the rest of the industry. The average investor in private equity has not seen particularly attractive returns compared with those available in the public market.
And those returns may be about to deteriorate. The most recent leveraged-buy-out boom ended with many firms collapsing in the early 1990s recession. Mr Grantham fears history may repeat itself. “Private equity has a long tradition of adding value, but there is one issue they have all missed,” he says. “Not a single firm has in its spreadsheet the expectation that profit margins have to come down.”
The move into both hedge funds and private equity involves a paradox. For an asset class to be a true diversifier, it needs to be small; but if it is small, then few investors can be exposed to it. When lots of capital flows into an asset class, it starts to behave like other markets. The recent problems in the British commercial-property market are a good example. Retail investors flocked into the sector as a diversifier from equities, and in the ten years to 2006 it performed brilliantly. But property is an illiquid asset. When prices started to fall last year, investors rushed to redeem their holdings. But it was impossible for the funds to realise on their properties in such short order, so many of them have been forced to suspend dealings in their shares and units. The asset class was simply not liquid enough to be a real diversifier for so many investors.
That has not stopped investors from looking for diversified returns elsewhere. In the second half of 2007 the truly hot areas were “frontier markets”, or what might be called the “emerging emerging markets”. The hope is that countries such as Kazakhstan and Vietnam will eventually achieve the same sort of growth rates as India and China.
Fund managers are also offering even more esoteric bets, known as “exotic beta”. Assets in this class include weather derivatives, distressed power stations and even footballers' contracts. The attraction is twofold. First, these asset classes are so remote from the forces that drive the S&P 500 index that any correlation is unlikely. Second, prices in this market may be set inefficiently, offering scope for astute fund managers to make money. At least that is what exotic-beta fund managers tell their clients to justify their fees.
Friday, February 22, 2008
3 gorges
Three Gorges Cleanup
Fails to Gain in China
By SHAI OSTER
February 21, 2008; Page A6
BEIJING -- Water quality in China's Three Gorges reservoir hasn't improved despite an ambitious, multibillion-dollar effort to clean up the lake created by construction of the world's largest dam, according to China's top environmental-regulatory agency.
The report reveals the continuing difficulties China's leaders face in managing the Three Gorges Dam, which was supposed to be a flagship national project but instead has generated an array of unforeseen consequences, from water pollution to landslides along the shores of its massive reservoir.
According to the study by the State Environmental Protection Administration, $2.5 billion has already been spent on cleanup projects such as new waste-water-treatment and garbage plants since 2000, but only one-third of the projects have been completed. And some of the newly built facilities aren't running at full capacity, the report said. Construction of the dam officially cost 180 billion yuan, or about $25 billion at current conversion rates.
The report said that water in the dam's 400-mile-long, man-made reservoir, which stretches west from the dam to the shores of central China's Chongqing city, is good enough for drinking, fishing and swimming.
But the water quality deteriorated along tributaries flowing into the reservoir through about 42 neighboring counties, the report said.
Planners underestimated the impact of quickened economic growth in the region, it noted. "With the fast development of the economy and society in the reservoir area and the rising levels of the reservoir, pollution control work in the Three Gorges area and the upstream water faces new challenges," the report said.
Problems could worsen once the reservoir, now only partially filled to about 515 feet above sea level, reaches its maximum height of 578 feet as early as this year. According to a separate report in China's state-run media, work on the dam, including boat lifts and power generators, will be finished by the end of 2008 -- a full year ahead of schedule.
First proposed by modern China's founding father, Sun Yat-sen, nearly a century ago, China's Three Gorges Dam was surrounded by controversy even before construction officially began in 1994. Proponents argue the dam is necessary to tame devastating floods along China's longest river and to generate much-needed clean energy.
Opponents say the dam's construction has threatened endangered species, destroyed historical sites and needlessly forced the relocation of more than a million people to achieve what smaller dams could have done. Critics also say the dam would create a giant cesspool by halting the ability of the river to flush out pollutants to the sea, and warn the dam has worsened geological conditions in the landslide-prone region.
Fails to Gain in China
By SHAI OSTER
February 21, 2008; Page A6
BEIJING -- Water quality in China's Three Gorges reservoir hasn't improved despite an ambitious, multibillion-dollar effort to clean up the lake created by construction of the world's largest dam, according to China's top environmental-regulatory agency.
The report reveals the continuing difficulties China's leaders face in managing the Three Gorges Dam, which was supposed to be a flagship national project but instead has generated an array of unforeseen consequences, from water pollution to landslides along the shores of its massive reservoir.
According to the study by the State Environmental Protection Administration, $2.5 billion has already been spent on cleanup projects such as new waste-water-treatment and garbage plants since 2000, but only one-third of the projects have been completed. And some of the newly built facilities aren't running at full capacity, the report said. Construction of the dam officially cost 180 billion yuan, or about $25 billion at current conversion rates.
The report said that water in the dam's 400-mile-long, man-made reservoir, which stretches west from the dam to the shores of central China's Chongqing city, is good enough for drinking, fishing and swimming.
But the water quality deteriorated along tributaries flowing into the reservoir through about 42 neighboring counties, the report said.
Planners underestimated the impact of quickened economic growth in the region, it noted. "With the fast development of the economy and society in the reservoir area and the rising levels of the reservoir, pollution control work in the Three Gorges area and the upstream water faces new challenges," the report said.
Problems could worsen once the reservoir, now only partially filled to about 515 feet above sea level, reaches its maximum height of 578 feet as early as this year. According to a separate report in China's state-run media, work on the dam, including boat lifts and power generators, will be finished by the end of 2008 -- a full year ahead of schedule.
First proposed by modern China's founding father, Sun Yat-sen, nearly a century ago, China's Three Gorges Dam was surrounded by controversy even before construction officially began in 1994. Proponents argue the dam is necessary to tame devastating floods along China's longest river and to generate much-needed clean energy.
Opponents say the dam's construction has threatened endangered species, destroyed historical sites and needlessly forced the relocation of more than a million people to achieve what smaller dams could have done. Critics also say the dam would create a giant cesspool by halting the ability of the river to flush out pollutants to the sea, and warn the dam has worsened geological conditions in the landslide-prone region.
Tuesday, February 05, 2008
Free Market Produces Too Little Education
Very interesting text I just read by Michael Parkin that says that "The free market produces too little education." And it goes on to say that education produces benefits that go beyond what the market would see. I infer that means the market does not gain much by teaching or imparting skills. And since there is no exchange of equals perhaps government incentives or something need to be given in order for education to take place.
Well, there are 2 interesting things I have been thinking about that kinda ties in to this concept. 2 very controversial thoughts that most people might just disagree with me about.
Firstly, we talk about management of corporations. There are 2 schools of thought here. Peter Drucker's school of thought is that the economy thrives with many large corporations, with well trained managers who rise through the ranks with good training (MBA's and the like). The other school of thought is that the economy will thrive only with entrepreneurs, many small business and start ups. Obviously, from Parkin's point of view the first school of thought is preferable. Once a start up grows beyond a certain size, an "entrepreneur" would need much more skills to run it, and he needs much more technical knowledge such as financial accounting etc. And he will not learn this in the free market which he so embodies, cos the free market does not have any incentive to teach him. Entrepreneurs are selfish face it. They will not organize a course in accounting to "share the knowledge", although investment banks like Goldman Sachs would. And they even welcome "alumni" who have gone through the training and left the company. Well, my entrepreneur friends say that you can always hire somebody to do the math for you, accounting, forex arbitrage etc. But then again, if u look carefully, for a start up investment house to reach the level of Goldman Sachs today would be quite impossible. The people you hire do not have the loyalty or the "system" in place, and if they come and go, you're in trouble.
Now the second thought. All this learning on the job rather than learning from courses is bullshit! Learning on the job presupposes that if you are dumped into doing the work, and trying to survive out there in the "market", you will learn how to survive. Unfortunately, without proper training more often that not I see that most new staff just learn the wrong things and "think" they have got it right. Nobody out there is gonna teach u the right thing unless there is something in it for them (or they are old grandfathers who are dying to impart knowledge). Chances are they'll teach u a bit and that's it. After all, what's in it for middle management to teach you all their skills? Hell, if you're brilliant you might actually be able to take over them after one year of training! Yes, I've seen people who have been around for 20 odd years who I can replace easily. And highly paid people too. Of course you need work experience that could only be gained from OTJ training. But thats probably half the solution.
Take for example designing a building and making it stand up. Really you could actually learn how to do it just by shadowing some PE and reading the building code top to bottom. After all, all the rules you need to follow are in there. As long as you follow the rules and some PE agrees to stamp it for you, you pass the building permit check am I right? Well, that's "assuming" you already have a degree, but lets say you don't but you pretend you do, you could probably get by and the building will stand up. Now, if you really didn't take any classes in building design or never went to college and never had a professor lecture to you and you did just that. I don't know what jack shit your building will look like. It'll probably stand up but nobody would wanna hire you or trust your judgement. And if something special had to be altered in the design I wouldn't even seek this guys opinion. Learning solely on the job is like desiging a skyscraper by hanging around with a PE for a month and memorizing the building code with no knowledge of what goes into structural analysis and design. No offence to Poly kids, but I hear people with diploma and no degree but 20 yrs on the job claim that they can design building just as well as any PE, after all they already memorize the code head to toe. No guesses why nobody would dare offer them a PE to design.....
Booksmarts vs streetsmarts? Hell there's no clear cut to the answer to this question. But if you watched Apprentice 3 (i think), its quite clear that the streetsmarts start to breakdown after reaching the highest level of corporate management. Hell that lady finalist, she wouldnt even want to thank her team after the last task, she just walked off! See at least with some degree of manners, culture, and not just BS "be yourself, do your own thing" perhaps she could have scored much better. I'd have preferred to work with the streetsmart lady than the other one. But at the highest level, she clearly felt out of place and didn't make the cut.....
So there.
Well, there are 2 interesting things I have been thinking about that kinda ties in to this concept. 2 very controversial thoughts that most people might just disagree with me about.
Firstly, we talk about management of corporations. There are 2 schools of thought here. Peter Drucker's school of thought is that the economy thrives with many large corporations, with well trained managers who rise through the ranks with good training (MBA's and the like). The other school of thought is that the economy will thrive only with entrepreneurs, many small business and start ups. Obviously, from Parkin's point of view the first school of thought is preferable. Once a start up grows beyond a certain size, an "entrepreneur" would need much more skills to run it, and he needs much more technical knowledge such as financial accounting etc. And he will not learn this in the free market which he so embodies, cos the free market does not have any incentive to teach him. Entrepreneurs are selfish face it. They will not organize a course in accounting to "share the knowledge", although investment banks like Goldman Sachs would. And they even welcome "alumni" who have gone through the training and left the company. Well, my entrepreneur friends say that you can always hire somebody to do the math for you, accounting, forex arbitrage etc. But then again, if u look carefully, for a start up investment house to reach the level of Goldman Sachs today would be quite impossible. The people you hire do not have the loyalty or the "system" in place, and if they come and go, you're in trouble.
Now the second thought. All this learning on the job rather than learning from courses is bullshit! Learning on the job presupposes that if you are dumped into doing the work, and trying to survive out there in the "market", you will learn how to survive. Unfortunately, without proper training more often that not I see that most new staff just learn the wrong things and "think" they have got it right. Nobody out there is gonna teach u the right thing unless there is something in it for them (or they are old grandfathers who are dying to impart knowledge). Chances are they'll teach u a bit and that's it. After all, what's in it for middle management to teach you all their skills? Hell, if you're brilliant you might actually be able to take over them after one year of training! Yes, I've seen people who have been around for 20 odd years who I can replace easily. And highly paid people too. Of course you need work experience that could only be gained from OTJ training. But thats probably half the solution.
Take for example designing a building and making it stand up. Really you could actually learn how to do it just by shadowing some PE and reading the building code top to bottom. After all, all the rules you need to follow are in there. As long as you follow the rules and some PE agrees to stamp it for you, you pass the building permit check am I right? Well, that's "assuming" you already have a degree, but lets say you don't but you pretend you do, you could probably get by and the building will stand up. Now, if you really didn't take any classes in building design or never went to college and never had a professor lecture to you and you did just that. I don't know what jack shit your building will look like. It'll probably stand up but nobody would wanna hire you or trust your judgement. And if something special had to be altered in the design I wouldn't even seek this guys opinion. Learning solely on the job is like desiging a skyscraper by hanging around with a PE for a month and memorizing the building code with no knowledge of what goes into structural analysis and design. No offence to Poly kids, but I hear people with diploma and no degree but 20 yrs on the job claim that they can design building just as well as any PE, after all they already memorize the code head to toe. No guesses why nobody would dare offer them a PE to design.....
Booksmarts vs streetsmarts? Hell there's no clear cut to the answer to this question. But if you watched Apprentice 3 (i think), its quite clear that the streetsmarts start to breakdown after reaching the highest level of corporate management. Hell that lady finalist, she wouldnt even want to thank her team after the last task, she just walked off! See at least with some degree of manners, culture, and not just BS "be yourself, do your own thing" perhaps she could have scored much better. I'd have preferred to work with the streetsmart lady than the other one. But at the highest level, she clearly felt out of place and didn't make the cut.....
So there.
Sunday, February 03, 2008
Cloverfield
I just watched 2 movies. First one was cloverfield. That movie was absolutely crazy man! Made me so dizzy. Yeah the whole Blair witch thing but seriously, not worth the dizziness. So everybody dies, spoiler alert, and no head no tail! haha. I really hate these no head no tail things. if nobody's gonna tell me bout the monster, I'm gonna forget bout the movie very soon. so i'm not gonna watch part 2.....
Then there was Rambo. Yah everybody says its good, but seriously, quite a lot of been there done that. he's a hero, but really its just many different ways to kill baddies. And a hell lot of killing! with many different weapons too haha! Claymore mine on a Mk 83 bomb (that's what it looks like). The blast radius is way too big, you'd thing that's a nuclear weapon haha! So much for the myanmese bad guys. But they were so gruesome man! So many rape scenese. disgusting.
Ok, so i was a little unnerved by all this killing and blood. But thankfully after that i passed by this little band playing mexican music outside tampines mall. really fantastic and soothing music! and they were really into it! Made me feel much better cos I was gonna die of hypertension already haha.
When u approach 30 a lot of yr friends are getting married. A lot are also breaking up. and breakups tend to be much more unpleasant than before. lots of really unhappy things much unlike high school break ups. its kinda sad. Worst still cos for most of my guy friends its the girl thats the problem. So sad to see such nice guys lose faith entirely in relationships cos of some girl that was really not worth it... sigh
Myself? I think I've seen the light. Life is good. I know what I want. Maybe not always so clearly but at least I know how I can be happy and I can do something bout it. I can enjoy the fresh air and some good music again. Not to mention a cup of caramel macchiato from gloria jeans really makes my day! And a nice book. My failing eyesight means i shouldn't stare at a computer screen too long.
I've dropped the Economist in favour of the wall street journal online. Surprising huh? Well, they Economist wanted to triple my subscription for the print edition. And they said it was a special price already! Anyway, too much politics, too depressing. Though I must admit i really like the objectivity of the Economist. WSJ after purchase by Rupert Murdoch? I'm not so sure. But nonetheless USD80 a year for online edition is not too bad. i've spent worst money on other things. Not to mention WSJ's wkend edition has some really nice articles, which I have promptly reproduced here. Hope I don't get sued for copyright!
Ya its late and I've got work to do. But don't forget to pursue life, liberty and happyness for all y'all who are reading this! Don't waste your life over anything unhappy that's happening right now or in the past. Look forward to a happier future and do something bout it!
:P
Then there was Rambo. Yah everybody says its good, but seriously, quite a lot of been there done that. he's a hero, but really its just many different ways to kill baddies. And a hell lot of killing! with many different weapons too haha! Claymore mine on a Mk 83 bomb (that's what it looks like). The blast radius is way too big, you'd thing that's a nuclear weapon haha! So much for the myanmese bad guys. But they were so gruesome man! So many rape scenese. disgusting.
Ok, so i was a little unnerved by all this killing and blood. But thankfully after that i passed by this little band playing mexican music outside tampines mall. really fantastic and soothing music! and they were really into it! Made me feel much better cos I was gonna die of hypertension already haha.
When u approach 30 a lot of yr friends are getting married. A lot are also breaking up. and breakups tend to be much more unpleasant than before. lots of really unhappy things much unlike high school break ups. its kinda sad. Worst still cos for most of my guy friends its the girl thats the problem. So sad to see such nice guys lose faith entirely in relationships cos of some girl that was really not worth it... sigh
Myself? I think I've seen the light. Life is good. I know what I want. Maybe not always so clearly but at least I know how I can be happy and I can do something bout it. I can enjoy the fresh air and some good music again. Not to mention a cup of caramel macchiato from gloria jeans really makes my day! And a nice book. My failing eyesight means i shouldn't stare at a computer screen too long.
I've dropped the Economist in favour of the wall street journal online. Surprising huh? Well, they Economist wanted to triple my subscription for the print edition. And they said it was a special price already! Anyway, too much politics, too depressing. Though I must admit i really like the objectivity of the Economist. WSJ after purchase by Rupert Murdoch? I'm not so sure. But nonetheless USD80 a year for online edition is not too bad. i've spent worst money on other things. Not to mention WSJ's wkend edition has some really nice articles, which I have promptly reproduced here. Hope I don't get sued for copyright!
Ya its late and I've got work to do. But don't forget to pursue life, liberty and happyness for all y'all who are reading this! Don't waste your life over anything unhappy that's happening right now or in the past. Look forward to a happier future and do something bout it!
:P
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