The following was just printed in South China Morning Post.
Market meltdown
The credit crisis is only the first phase of a greater unravelling of the financial system
Andy Xie
Mar 12, 2008
When you see a cockroach, assume that there are hundreds of others behind it. This redneck wisdom seems to work best in finance: the recent bankruptcies of several funds administered by hedge funds and private equity firms may be followed by an avalanche. Hedge funds and private equity firms have over US$3 trillion under management; their debts may be twice as high. Their investment activities are primarily concerned with borrowing cheaply to buy higher-return assets. "Higher return", of late, has come to mean "faster appreciating", not "higher yielding". As debt costs rise and asset prices fall, thousands of funds may already be under water. When their banks make margin calls, they have to liquidate.
This liquidation bounces back on lenders. Most large financial institutions have been mimicking hedge funds and private equity firms by acquiring assets with debts, warehousing them for appreciation, and booking the appreciation as earnings. As hedge funds and private equity firms liquidate, they have to mark-to-market their assets - that is, value their assets and liabilities on their balance sheet using the assets\' current market values. Global financial institutions may have to write down three times the US$160 billion that they have announced.
As the financial market melts down, many investors may want to withdraw from good-performing funds, usually small hedge funds, to preserve their wealth. They may be surprised to learn that these funds were not so good after all; they have been supporting the share prices of small companies. When these funds liquidate, there are no takers. Their real performance may be even worse than the bad ones.
What is occurring is the meltdown of the biggest pyramid game in human history. Since the burst of the Nasdaq bubble in March 2000, hedge funds, private equity funds and proprietary trading at banks have come to dominate money making. The new business model depends on asset prices rising. As so many rushed to the same side at the same time, their demand pushed up asset prices; thus, this model was self-fulfilling.
So much demand for debt should have pushed up their costs and invalidated the model. Luckily for our heroes, the then Federal Reserve chairman Alan Greenspan kept the liquidity spigot flowing to meet all the debt demand. Our heroes prospered by raising capital from other people and borrowing from financial institutions, which borrowed from other people. This new model created very young heroes.
When the tide goes out, you discover who is not wearing a bathing costume, as they say. This time, it turns out, nobody is. Now, our naked young heroes are being fired left and right. Their grey-haired bosses blame them for the big losses that their firms are suffering; never mind that they paid themselves tens of millions of dollars on their erstwhile heroes\' false profits.
In the Nasdaq bust, chief executives of the collapsing firms also blamed others at first, claiming ignorance of the financial shenanigans at their own companies. As the wheels of justice turned, they went to jail one after another. I suspect we are witnessing a repeat of this eternal drama - and that some Wall Street executives will go to jail this time, too.
We are through only the first wave of this credit bubble bursting. The bankruptcies of hedge funds and private equity firms will lead to capital losses for their investors and their financing banks. Around the corner, the second wave of writedowns will come from marking-to-market mortgage-backed securities, corporate credits and leveraged loans. As the financial turmoil brings down the economy, consumer credit will deteriorate in quality. The third wave of writedowns will occur amid surging unemployment late this year or early next.
So far, the decline of asset prices has been mostly normalisation; they were exaggerated by excessive leverage. Declining asset prices do temporarily crimp consumption and investment, which causes economic weakness and inspires fear in the financial market. Declining capital stock in the global financial system, however, is a bigger factor. The right course of action is for the US government to establish a Resolution Trust Corporation to take over failing financial institutions, including hedge funds and private equity firms, and leave the Fed to tackle inflation. But a Republican administration could not go to a Democratic Congress for money to capitalise such a corporation. It could not justify spending US$1 trillion to bail out those who deceived investors around the world and destroyed the finest financial institutions in America for their own gains. Instead, the Fed will be called on to save the financial system, boost the economy and suppress inflation at the same time.
Fed chairman Ben Bernanke will go down in history as a tragic figure. He has focused on stabilising the financial system first and foremost. His cutting of interest rates has opened up a big gap between short- and long-term rates. Financial institutions could profit from the gap by borrowing short-term funds for investing in long-term bonds. But this trick is not working well now, as financial institutions lack the capital. Instead, they are looking to make a fast buck in commodity markets, which is increasing inflationary pressure. Wall Street is burning the man who is trying to save it. History will inevitably compare Dr Bernanke with Arthur Burns, the Fed chairman who presided over stagflation in the 1970s.
When the financial system stabilises, inflation will force Dr Bernanke to raise interest rates quickly and to a very high level, causing a gut-wrenching recession, as Paul Volker did to cure Burns\' stagflation. Dr Bernanke could become Burns and Mr Volker in one term.
Andy Xie is an independent economist
Wednesday, March 26, 2008
Tuesday, March 25, 2008
美國研究所入學標準
Geraldine F. Koch
Assistant Director of Graduate Admission
Pace University
美國大學研究所在審核新生入學有那些標準？相信很多國際學生都很好奇。擔任紐約市Pace University研究所入學辦公室副主任的Geraldine F. Koch經常碰到國際學生的查詢。最常見的問題是﹕大學成績佔的比重多大？英語標準測驗分數重不重要？申請表的讀書計劃及工作經驗有多重要？什麼人作錄取的最後決定？
國際學生申請美國大學研究所時，差不多都要附上英文能力證明，除此，還有很多條件。基本上，不管申請的是那一系，主要評估分兩個部分，個人的學業成績及資料。
要決定個人的學業背景條件是否足夠，申請人通常要繳交大學、或包括研究所成績單的英譯本（含修畢科目、學分及平均成績）、GRE或GMAT成績，以及托福成績單。
在個人資料方面，申請人需繳交二或三份推薦信，最好是教授或專業人士的推薦信，書面讀書計劃說明申請人追求的學位科系，履歷或歷年工作經驗。
有些科系如藝術課程可能要求申請人繳交作品或樣本。Pace大學心理學會要求個別面試或電話面談。（通常是在申請表及文件已被入學辦公室評估接受之後）。
入學申請審核小組將從大學成績、GRE、托福成績等來評估申請人是否具備唸研究所的條件。
在大學或研究所學業成績方面，審核小組注重的是全面的平均成績點數（GPA）以及主修科目的成績。衡量申請人一般知識的標準測驗，是從申請人成績單總分之多寡，及和科學相關的部分成績而定。比如，申請與出版業方面有關的研究所課程，申請人必須具有相當的閱讀、字彙能力。因此GRE中的文字部分成績比重要比數理分析部分重要。研究所托福成績最低要求是550分，但大部分大學希望600 以上。
在校成績及測驗分數雖是對申請人能力的客觀評估，由於個人專業背景很重要，因此對申請入學是否通過極有影響。
書面讀書計劃反映了申請人的書寫能力及求學動機。推薦信可以證明申請人求學或工作的能力。自傳使得審核小組瞭解申請人一些課堂外的情形或資料，這些都提供審核小組進一步認識申請人能力的機會。
Koch表示，研究所申請人不要害怕發問。對於大學入學錄取規定如有特別問題，可以多方面取得答案。有的大學會提供說明會向有意申請的學生講解，申請人能夠親自參加最好，要不然可以寫信、傳真或打電話向入學辦公室（Admission Office）查詢。如有問題可找入學辦公室的專家或能夠解答的人士查問，查明申請過程對你取得入學許可有很大助益。
Assistant Director of Graduate Admission
Pace University
美國大學研究所在審核新生入學有那些標準？相信很多國際學生都很好奇。擔任紐約市Pace University研究所入學辦公室副主任的Geraldine F. Koch經常碰到國際學生的查詢。最常見的問題是﹕大學成績佔的比重多大？英語標準測驗分數重不重要？申請表的讀書計劃及工作經驗有多重要？什麼人作錄取的最後決定？
國際學生申請美國大學研究所時，差不多都要附上英文能力證明，除此，還有很多條件。基本上，不管申請的是那一系，主要評估分兩個部分，個人的學業成績及資料。
要決定個人的學業背景條件是否足夠，申請人通常要繳交大學、或包括研究所成績單的英譯本（含修畢科目、學分及平均成績）、GRE或GMAT成績，以及托福成績單。
在個人資料方面，申請人需繳交二或三份推薦信，最好是教授或專業人士的推薦信，書面讀書計劃說明申請人追求的學位科系，履歷或歷年工作經驗。
有些科系如藝術課程可能要求申請人繳交作品或樣本。Pace大學心理學會要求個別面試或電話面談。（通常是在申請表及文件已被入學辦公室評估接受之後）。
入學申請審核小組將從大學成績、GRE、托福成績等來評估申請人是否具備唸研究所的條件。
在大學或研究所學業成績方面，審核小組注重的是全面的平均成績點數（GPA）以及主修科目的成績。衡量申請人一般知識的標準測驗，是從申請人成績單總分之多寡，及和科學相關的部分成績而定。比如，申請與出版業方面有關的研究所課程，申請人必須具有相當的閱讀、字彙能力。因此GRE中的文字部分成績比重要比數理分析部分重要。研究所托福成績最低要求是550分，但大部分大學希望600 以上。
在校成績及測驗分數雖是對申請人能力的客觀評估，由於個人專業背景很重要，因此對申請入學是否通過極有影響。
書面讀書計劃反映了申請人的書寫能力及求學動機。推薦信可以證明申請人求學或工作的能力。自傳使得審核小組瞭解申請人一些課堂外的情形或資料，這些都提供審核小組進一步認識申請人能力的機會。
Koch表示，研究所申請人不要害怕發問。對於大學入學錄取規定如有特別問題，可以多方面取得答案。有的大學會提供說明會向有意申請的學生講解，申請人能夠親自參加最好，要不然可以寫信、傳真或打電話向入學辦公室（Admission Office）查詢。如有問題可找入學辦公室的專家或能夠解答的人士查問，查明申請過程對你取得入學許可有很大助益。
Tuesday, March 18, 2008
最新西藏情勢報導-BBC新聞
Bo Gu, an NBC News Assistant Producer, traveled from Beijing to Lhasa, Tibet on Sunday. The following is her account of the scene in the Tibetan city over the last several days.
LHASA, Tibet – When I arrived in Lhasa, the site of recent protests against Chinese rule, I asked a taxi driver to take me to the House of Shambala, a hotel in the center of town.
"The House of Shambala? No way, I’m not going there," said the Tibetan taxi driver, his wrinkled, tanned face looking nervous.
"It’s really chaotic in Lhasa now," another taxi driver said as he approached us. "Two hundred and I’ll take you to Lhasa, but not to the House of Shambala. That area is all blocked now."
The second driver wasn’t exaggerating – we soon discovered that the city was in lock-down mode.
Image: Tibetan exiles react emotionally as they raise anti-China slogans.
SLIDESHOW: Tibet protests turn violent
We had already been checked twice by Chinese police at roadblocks on our way into Lhasa from the airport. They checked our IDs and even took a look inside the trunk of our car. On the way, we also saw at least 10 army vehicles coming out of Lhasa with soldiers sitting in the back.
And the east side of the city, where all the tourist attractions are – the renown Potala Palace, the Jokhang Temple, and the shopping sanctum, Barkhor Street – was blocked from access.
Silent streets
As we walked around the parts of the city that were accessible on Sunday, the streets were absolutely dead. Most of the shops were closed with steel shutters. We saw very few pedestrians on the streets. A soldier gestured to me an absolute "no" when I tried to take a picture of the Potala Palace.
We walked down a road north of our hotel until we hit a traffic intersection, where at least 100 soldiers were stationed, holding shields and wearing helmets. Some of the soldiers had either guns or batons in their hands. A few armored vehicles were stopped at the street corner as well.
Just as we were about to cross the street, mayhem erupted. Half of the soldiers started running toward a nearby residential area, shouting loudly, while other soldiers told the pedestrians to leave.
We found a nearby hotel that had a rooftop deck and climbed up with a few curious members of the hotel staff to see what was going on.
The soldiers walked out of the residential area with three men who had their hands tied behind their backs. I assumed they were Tibetan monks, because they were wearing red robes. The men were taken to the intersection and forced to kneel down. We had to leave before seeing what became of the arrested men.
Smashed windows, looted shops
On Monday morning we tried to stroll along the main road in Lhasa – Beijing Dong Lu – which had been totally blocked the day before. To my surprise, we were able to walk down it freely. But every car that drove by was forced to stop and was checked by soldiers stationed at roadblocks.
But as we walked down the road, I was totally shocked. It smelled like a battlefield.
We saw smashed windows, looted shops, and buildings that were totally burned down – some of which were still smoking. There was trash all over the street. Armed soldiers were everywhere and taking photographs was absolutely forbidden.
Most of the burned or smashed stores were clothes shops, restaurants, beauty salons, hotels, or bank ATMs run by ethnic Han Chinese, although I did hear a few Tibetan shops were damaged, too. The Tibet bureau of China’s state-run Xinhua news agency was burned very badly. And all the residential alleys running along the main road were still blocked.
A soldier harshly shooed me away when I stopped to watch some soldiers on a rooftop throw rocks off a building. By afternoon, more people came out into the street. They were mostly Han Chinese, though I did see a big crowd of Tibetans in front of an elementary school – they were mostly Tibetan parents waiting for their kids to come out of school. There were dozens of armed soldiers outside the school as well.
Fearful residents
One of the waitresses at the hotel didn’t like seeing us walk around the city. She hadn’t been outside the hotel for a few days out of fear of becoming the target of attack.
"One of my friends just walked on the streets by himself the other day when a Tibetan guy put a big knife [at his throat], asking him, ‘Are you Han or Tibetan?’ He said he was Tibetan and was let go. He definitely would have been hacked to death if he had said he was Han," said the waitress, as she shook her head and sighed.
Surprisingly, despite the fear that the waitress expressed, by Tuesday morning, life seemed to be getting back to normal. There were more people walking on the streets and buses and taxi cars were beginning to run.
LHASA, Tibet – When I arrived in Lhasa, the site of recent protests against Chinese rule, I asked a taxi driver to take me to the House of Shambala, a hotel in the center of town.
"The House of Shambala? No way, I’m not going there," said the Tibetan taxi driver, his wrinkled, tanned face looking nervous.
"It’s really chaotic in Lhasa now," another taxi driver said as he approached us. "Two hundred and I’ll take you to Lhasa, but not to the House of Shambala. That area is all blocked now."
The second driver wasn’t exaggerating – we soon discovered that the city was in lock-down mode.
Image: Tibetan exiles react emotionally as they raise anti-China slogans.
SLIDESHOW: Tibet protests turn violent
We had already been checked twice by Chinese police at roadblocks on our way into Lhasa from the airport. They checked our IDs and even took a look inside the trunk of our car. On the way, we also saw at least 10 army vehicles coming out of Lhasa with soldiers sitting in the back.
And the east side of the city, where all the tourist attractions are – the renown Potala Palace, the Jokhang Temple, and the shopping sanctum, Barkhor Street – was blocked from access.
Silent streets
As we walked around the parts of the city that were accessible on Sunday, the streets were absolutely dead. Most of the shops were closed with steel shutters. We saw very few pedestrians on the streets. A soldier gestured to me an absolute "no" when I tried to take a picture of the Potala Palace.
We walked down a road north of our hotel until we hit a traffic intersection, where at least 100 soldiers were stationed, holding shields and wearing helmets. Some of the soldiers had either guns or batons in their hands. A few armored vehicles were stopped at the street corner as well.
Just as we were about to cross the street, mayhem erupted. Half of the soldiers started running toward a nearby residential area, shouting loudly, while other soldiers told the pedestrians to leave.
We found a nearby hotel that had a rooftop deck and climbed up with a few curious members of the hotel staff to see what was going on.
The soldiers walked out of the residential area with three men who had their hands tied behind their backs. I assumed they were Tibetan monks, because they were wearing red robes. The men were taken to the intersection and forced to kneel down. We had to leave before seeing what became of the arrested men.
Smashed windows, looted shops
On Monday morning we tried to stroll along the main road in Lhasa – Beijing Dong Lu – which had been totally blocked the day before. To my surprise, we were able to walk down it freely. But every car that drove by was forced to stop and was checked by soldiers stationed at roadblocks.
But as we walked down the road, I was totally shocked. It smelled like a battlefield.
We saw smashed windows, looted shops, and buildings that were totally burned down – some of which were still smoking. There was trash all over the street. Armed soldiers were everywhere and taking photographs was absolutely forbidden.
Most of the burned or smashed stores were clothes shops, restaurants, beauty salons, hotels, or bank ATMs run by ethnic Han Chinese, although I did hear a few Tibetan shops were damaged, too. The Tibet bureau of China’s state-run Xinhua news agency was burned very badly. And all the residential alleys running along the main road were still blocked.
A soldier harshly shooed me away when I stopped to watch some soldiers on a rooftop throw rocks off a building. By afternoon, more people came out into the street. They were mostly Han Chinese, though I did see a big crowd of Tibetans in front of an elementary school – they were mostly Tibetan parents waiting for their kids to come out of school. There were dozens of armed soldiers outside the school as well.
Fearful residents
One of the waitresses at the hotel didn’t like seeing us walk around the city. She hadn’t been outside the hotel for a few days out of fear of becoming the target of attack.
"One of my friends just walked on the streets by himself the other day when a Tibetan guy put a big knife [at his throat], asking him, ‘Are you Han or Tibetan?’ He said he was Tibetan and was let go. He definitely would have been hacked to death if he had said he was Han," said the waitress, as she shook her head and sighed.
Surprisingly, despite the fear that the waitress expressed, by Tuesday morning, life seemed to be getting back to normal. There were more people walking on the streets and buses and taxi cars were beginning to run.
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