I generally ask myself at this time of year what were the biggest stories of the past twelve months, in business/financial news.
By "stories," I don't mean themes, such as "China Rising" or "EU unraveling." I mean stories, such as one might have seen in a particular newspaper on some specific day. Of course, I choose the ones I do largely because they illustrate an important theme. But the theme itself isn't the story.
Further, I don't rank them, as in a top ten list. I generally assign one top story to each of the twelve months.
All that said, here is this year's list.
January. Google announcement. Google said that it was no longer willing to censor its searches in the People's Republic of China in accord with the desires of the authorities there. This was part of an escalating dispute that would lead to Google pulling out of China altogether in March.
February. Two competing biotech companies in Denmark claimed a break through in the production of commercially viable cellulosic ethanol.
March. U.S. health care reform bill finally passed -- though the actual changes are to be phased in over a period of years. Judicial challenges to the new law are an ongoing story as the year ends.
April. Greek bonds. The S&P rating for these bonds was lowered to junk level. The unfortunate acronym "PIIGS" for the 'periphery' countries of the EU receives some currency. (For the record, that's Portugal, Ireland, Italy, Greece, and Spain.)
May. The EU Finance Ministers. The Finance Ministers over-rode the strong objections of both the outgoing and the incoming UK government, approving the Alternative Investment Fund Manager (AIFM) Directive.
June. The Gulf of Mexico oil spill. This spill had begun with an explosion on the Deep Horizon platform in April, but it grew as a story week after week, and only this month did it attain totemic full-sh!t-storm significance, even at the level of diplomacy between US and UK.
July. The Dodd-Frank bill reforming the way the financial services industry in the U.S. is regulated, passed. Obama signed it. Much of it kicks the can forward, authorizing reports and possible new regs by a variety of agencies. Some obvious reforms, like the consolidation of CFTC with SEC, go still unmade.
August. The Hong Kong Monetary Authority. The HKMA announced the tightening of its rules on mortgage lending. This reflected its concerns about a developing real estate bubble in the Special Administrative Region.
September. Muncipal bonds in the U.S. Meredith Whitney put out a 600 page report predicting big trouble ahead for the municipal bond market in the US. By serendipity, she released this just as Harrisburg, PA was getting into big fiscal trouble.
October. Sarkozy, President of France. This month, the President pushed pension reforms through the French legislature despite crippling nationwide strikes. (And since we're talking about France, this was also the month that Kerviel was sentenced.)
November. Midterm elections in the US. The most remarkable development here, from the point of view of this list, was the defeat of a proposition designed to suspend AB32, in California, and the election of a Governor committed to enforcing same. AB32 is California's cap-and-trade bill regarding carbon emissions. This development has kept cap-and-trade alive, despite its political failure at the federal level.
December. Ireland. In crisis, and after cutting a deeply unpopular deal with the IMF, Ireland enacts legislation that readies a sweeping re-organization of the banking sector there. Memories of the "Celtic tiger" are just that.
A quick perusal of this list shows that it is much less of a US-centric compilation than most of its precursors in this blog. I have a hometown bias. In this case, though, only five of the stores that strike me as the biggest in their respective months are US-oriented. Five are European, and the other two are Chinese. What does that mean? Nothing much, I suppose.
Happy new year everyone.
Showing posts with label Hong Kong. Show all posts
Showing posts with label Hong Kong. Show all posts
31 December 2010
27 August 2010
Chinese Track Star on the Comeback Trail
Two years ago at about this time the Olympics were underway in China, and I wrote an entry here about the host country's track-and-field star, Liu Xiang, who surprisingly withdrew from the men's 110 meter hurdles.
Just one year ago about this time I wrote a follow-up. Despite early conspiracy theories, Liu's injuries of 2008 had turned out to be real enough to have kept him out of competition entirely during the intervening period.
So: what is up with Liu now?
I am happy to report that he is backin active competition. Last November, he raced at the Asian Athletics Championships in Guangzhou, China, taking gold in the 110 meter hurdles. The following month he again took gold in games held in Hong Kong.
In May of this year, he participated in the Diamond League Games, in his hometown of Shanghai. I have no idea whether he came in first or last or anywhere in between in his signature event there.
Now he is somewhere in the US for medical treatment on the crucial foot. I wish him well, and hereby appoint him the official track-and-field star of this blog.
Just one year ago about this time I wrote a follow-up. Despite early conspiracy theories, Liu's injuries of 2008 had turned out to be real enough to have kept him out of competition entirely during the intervening period.
So: what is up with Liu now?
I am happy to report that he is backin active competition. Last November, he raced at the Asian Athletics Championships in Guangzhou, China, taking gold in the 110 meter hurdles. The following month he again took gold in games held in Hong Kong.
In May of this year, he participated in the Diamond League Games, in his hometown of Shanghai. I have no idea whether he came in first or last or anywhere in between in his signature event there.
Now he is somewhere in the US for medical treatment on the crucial foot. I wish him well, and hereby appoint him the official track-and-field star of this blog.
24 October 2009
Fooled by Foreshortening
In some of my earlier posts, I've discussed the plot of a Ben Mezrich book, UGLY AMERICANS.
I got some important chronological points wrong, and I'd like to correct that now. Indeed, I've corrected it in my plot summary thus.
I've had a lot of trouble cross-referencing the events in the book with real-world events, and to some extent I at last understand why. Bear with me.
Mezrich tells the "true story of the Ivy League Cowboys who raided the Asian Markets for Millions." The central "cowboy" is the fellow he calls John Malcolm, who went to Japan to take a job with Kidder Peabody, apparently in 1993, then lost that job when the Joseph Jett scandal hit, the following year.
Then Malcolm got a job placing orders for Nick Leeson, which ended in February 1995.
Thereafter, Malcom called his former boss at Kidder Peabody, who was now the head of a hedge fund. The main story of the book starts there. Until now, I had believed that these central plotting events, involving the Hong Kong stock exchange's tracking fund, took place in 1995, soon after Malcolm had settled into his new job. That is the impression the book conveys. But the tracking fund at issue didn't exist then! It came into existence as a result of the East Asia currency crises of 1997-98.
But on a closer reading, I see that the story can be reconciled to that fact, and Mezrich can't be said to have simply gotten it wrong, foreshortened though his account is. At least part of the blame is mine.
There is a time clue on page 196 of his book, where Mezrich writes: "The brainchild of Richard Li, at thirty-five one of China's richest and most infamous characters, Pacific Century Cyberworks has started off...."
When was Li thirty five?
The answer is that he would have turned that age in November of 2001. This means that the Christmas party described in chapter 21 of the book, when the main characters discuss Richard Li, must have taken place in December 2001. That, in turn, makes the foollowing trades consistent with the actual existence of this fund, and with a merger in which Pacific Century Cyberworks was involved at the turn of the millennium.
"Understanding comes step by step, grasshopper."
"Thank you, Master."
I got some important chronological points wrong, and I'd like to correct that now. Indeed, I've corrected it in my plot summary thus.
I've had a lot of trouble cross-referencing the events in the book with real-world events, and to some extent I at last understand why. Bear with me.
Mezrich tells the "true story of the Ivy League Cowboys who raided the Asian Markets for Millions." The central "cowboy" is the fellow he calls John Malcolm, who went to Japan to take a job with Kidder Peabody, apparently in 1993, then lost that job when the Joseph Jett scandal hit, the following year.
Then Malcolm got a job placing orders for Nick Leeson, which ended in February 1995.
Thereafter, Malcom called his former boss at Kidder Peabody, who was now the head of a hedge fund. The main story of the book starts there. Until now, I had believed that these central plotting events, involving the Hong Kong stock exchange's tracking fund, took place in 1995, soon after Malcolm had settled into his new job. That is the impression the book conveys. But the tracking fund at issue didn't exist then! It came into existence as a result of the East Asia currency crises of 1997-98.
But on a closer reading, I see that the story can be reconciled to that fact, and Mezrich can't be said to have simply gotten it wrong, foreshortened though his account is. At least part of the blame is mine.
There is a time clue on page 196 of his book, where Mezrich writes: "The brainchild of Richard Li, at thirty-five one of China's richest and most infamous characters, Pacific Century Cyberworks has started off...."
When was Li thirty five?
The answer is that he would have turned that age in November of 2001. This means that the Christmas party described in chapter 21 of the book, when the main characters discuss Richard Li, must have taken place in December 2001. That, in turn, makes the foollowing trades consistent with the actual existence of this fund, and with a merger in which Pacific Century Cyberworks was involved at the turn of the millennium.
"Understanding comes step by step, grasshopper."
"Thank you, Master."
07 February 2009
Edward Elgar Publishing
Edward Elgar is a UK based publishing company focused on economics, finance, and management.
So: why is such a company named after an orchestral composer?
I presume the reason is simply that until quite recently Elgar's face graced the 20 pound note, the most common note in circulation in the UK. There are many such notes with his visage still in use, although they are being phased out in favor of a note with the face of Adam Smith.
Anyway, I've recently received a catalog of EE's new 2009 titles and I thought I'd list a few of the more intriguing ones here. I'll add a word of explanation where it seems necessary -- some of the titles explain themselves pretty well.
Alice de Jonge, Corporate Governance and China's H-Share Market. The H-Share Market consists of mainland Chinese companies listed on the exchange in Hong Kong, with prices denominated in HK dollars rather than in the yuan. The catalog says that the book is "a story of individual firms being pragmatic in mediating the different agendas of state agencies that own or control them."
Klaus Liebscher, Josef Christl, Peter Mooslechner, and Doris Ritzberger-Grunwald, eds., Currency and Competitiveness in Europe
Richard A. Iley & Mervyn K. Lewis, Untangling the US Deficit: Evaluating Causes, Cures and Global Imbalances
Donato Masciandaro, Elod Takats, Brigette Unger, Black Finance: The Economics of Money Laundering
Philip Arestis & Malcolm Sawyer, eds., A Handbook of Alternative Monetary Economics What is "alternative monetary economics"? The basic idea of the AME theorists is that mainstream economics treats money as essentially a unit of exchange, a more efficient substitute for barter. The aternative, though, is to treat money as in essence a unit of account, a way of incurring and keeping track of debts.
Jorge Martinez-Vazquez & Jose Felix Sanz-Sanz, Fiscal Reform in Spain: Accomplishments and Challenges. Franco has been dead for a long time now. What happens in the budgeting and taxing institutions of a nation making a peaceful transition away from fascism?
So: why is such a company named after an orchestral composer?
I presume the reason is simply that until quite recently Elgar's face graced the 20 pound note, the most common note in circulation in the UK. There are many such notes with his visage still in use, although they are being phased out in favor of a note with the face of Adam Smith.
Anyway, I've recently received a catalog of EE's new 2009 titles and I thought I'd list a few of the more intriguing ones here. I'll add a word of explanation where it seems necessary -- some of the titles explain themselves pretty well.
Alice de Jonge, Corporate Governance and China's H-Share Market. The H-Share Market consists of mainland Chinese companies listed on the exchange in Hong Kong, with prices denominated in HK dollars rather than in the yuan. The catalog says that the book is "a story of individual firms being pragmatic in mediating the different agendas of state agencies that own or control them."
Klaus Liebscher, Josef Christl, Peter Mooslechner, and Doris Ritzberger-Grunwald, eds., Currency and Competitiveness in Europe
Richard A. Iley & Mervyn K. Lewis, Untangling the US Deficit: Evaluating Causes, Cures and Global Imbalances
Donato Masciandaro, Elod Takats, Brigette Unger, Black Finance: The Economics of Money Laundering
Philip Arestis & Malcolm Sawyer, eds., A Handbook of Alternative Monetary Economics What is "alternative monetary economics"? The basic idea of the AME theorists is that mainstream economics treats money as essentially a unit of exchange, a more efficient substitute for barter. The aternative, though, is to treat money as in essence a unit of account, a way of incurring and keeping track of debts.
Jorge Martinez-Vazquez & Jose Felix Sanz-Sanz, Fiscal Reform in Spain: Accomplishments and Challenges. Franco has been dead for a long time now. What happens in the budgeting and taxing institutions of a nation making a peaceful transition away from fascism?
10 October 2008
Fragrant Harbour: The movie script
I blogged about a John Lanchester novel, in my Sept. 25 entry here.
Or I didn't. I set out that day to blog about the novel, but ended up in my errant stream-of-consciousness way talking merely about a single proverb that the novel invokes.
Can I say anything more generally about the book. Well, although I admired much in it, I couldn't help but wonder as I was reading how, if at all, it could ever be turned into a screenplay. It seems to have too much disparate material for that.
No author has a duty to produce a movie-adaptable novel, of course. This was simply the path my thoughts followed.
I can imagine myself angling for the screenwriter's job (hey, work with me here). Then reading the book and becoming dismayed at the task of reducing it to two hours -- three at most -- of filmable material. Ah, but it's time to get on the phone to the studio exec and make my pitch.
"Yes, JB, of course I think we can do it. Get this. There's a woman in a newsroom. No, not in Hong Kong. She starts off working for a small daily in a seaside resort town in England. She wants to make it big, our gal. She's ambitious. Has her eye on the London papers, and covering the biggest stories there.
"Fortunately for her, the Tory Party [pause as JB talks] those are the Conservatives ... the party holds a convention in her resort town. She meets a group of members of Parliament and goes out drinking with them.
"The next morning, she's in the newsroom, all hung over, but struggling to meet a deadline on a story about some missing kid. One of the guys she'd been drinking with approaches her, looking all shame-faced.
"At first she asks herself -- we use voice over of course -- did I sleep with him? No, I would have remembered that. I'm pretty sure. What's he here for.
"So they go off into the break room for some privacy, and he says to her, 'I said some quite indiscreet things last night. I would take it as a great favor if you would keep that especially sensitive bit I told you to yourself.'
"Well of course, JB! You're catching on. She has no idea what secret it is to which she is supposedly privy. But she's ambitious and bright. She looks him right in the eye and says, 'I'll take it to my grave.'"
"Thanks to this Tory and his friends, she gets her gig at a London paper. Once tghere, other rung-climbing opportunities and challenges present themselves, and of course there's a romance angle with a photographer.
"Yes, eventually we follow her to Hong Kong. And our gal makes it big there, too. But she breaks up with her now-long-distance boyfriend.
"Unfortunately the novel then cuts away from her story and she's only tangentially involved in the rest of the book. But ignore all that. Her story, early on, is the most cinematic part of the whole. We can give it a different ending -- something about how boundless ambition in time leads to her fall -- or something sweet involving the photographer. Or both. We'll work it out.
"Wonderful, JB! Now, let's talk about my pay...."
Or I didn't. I set out that day to blog about the novel, but ended up in my errant stream-of-consciousness way talking merely about a single proverb that the novel invokes.
Can I say anything more generally about the book. Well, although I admired much in it, I couldn't help but wonder as I was reading how, if at all, it could ever be turned into a screenplay. It seems to have too much disparate material for that.
No author has a duty to produce a movie-adaptable novel, of course. This was simply the path my thoughts followed.
I can imagine myself angling for the screenwriter's job (hey, work with me here). Then reading the book and becoming dismayed at the task of reducing it to two hours -- three at most -- of filmable material. Ah, but it's time to get on the phone to the studio exec and make my pitch.
"Yes, JB, of course I think we can do it. Get this. There's a woman in a newsroom. No, not in Hong Kong. She starts off working for a small daily in a seaside resort town in England. She wants to make it big, our gal. She's ambitious. Has her eye on the London papers, and covering the biggest stories there.
"Fortunately for her, the Tory Party [pause as JB talks] those are the Conservatives ... the party holds a convention in her resort town. She meets a group of members of Parliament and goes out drinking with them.
"The next morning, she's in the newsroom, all hung over, but struggling to meet a deadline on a story about some missing kid. One of the guys she'd been drinking with approaches her, looking all shame-faced.
"At first she asks herself -- we use voice over of course -- did I sleep with him? No, I would have remembered that. I'm pretty sure. What's he here for.
"So they go off into the break room for some privacy, and he says to her, 'I said some quite indiscreet things last night. I would take it as a great favor if you would keep that especially sensitive bit I told you to yourself.'
"Well of course, JB! You're catching on. She has no idea what secret it is to which she is supposedly privy. But she's ambitious and bright. She looks him right in the eye and says, 'I'll take it to my grave.'"
"Thanks to this Tory and his friends, she gets her gig at a London paper. Once tghere, other rung-climbing opportunities and challenges present themselves, and of course there's a romance angle with a photographer.
"Yes, eventually we follow her to Hong Kong. And our gal makes it big there, too. But she breaks up with her now-long-distance boyfriend.
"Unfortunately the novel then cuts away from her story and she's only tangentially involved in the rest of the book. But ignore all that. Her story, early on, is the most cinematic part of the whole. We can give it a different ending -- something about how boundless ambition in time leads to her fall -- or something sweet involving the photographer. Or both. We'll work it out.
"Wonderful, JB! Now, let's talk about my pay...."
25 September 2008
"The mountains are high"
There's an old Cantonese saying: The mountains are high and the Emperor is far away.
It means what the late American politician Tip O'Neill also meant when he said, with less imagery but greater concision, "All politics is local."
I encountered this proverb in a novel recommended to me by a friend, Fragrant Harbour (2002) by John Lanchester. It comes into play there because one of the characters, Matthew Ho, runs an air conditioner manufacturing business, headquartered in Hong Kong but with certain crucial investments in Canton, the province of mainland China surrounding that special administrative region.
Matthew's investments run into trouble, of a sort that's make-or-break for his business as a whole. He tries to threaten a provincial official with the prospect of goig over his head to Beijing, only to be told: "The mountains are high and the Emperor is far away." We do our own thing around here, buddy.
Read about Lanchester's novel here or just admire the front cover above.
To test whether the proverb was perhaps the product of Mr. Lanchester's imagination, I did manage to drop it into a conversation I had with a businessman while I was in Hong Kong recently. He recognized it, and seemed pleased that I knew of it.
The idea that the southeast of China does things differently, that the mountains are high, etc., long predates the arrival of the Brits in the region. It may date to a Mongol invasion of China in the 13th century. As the Mongols conquered the north, the remnants of the Song dynasty retreated into what Canton. Though the Mongols eventually ended resistance there, too in one of the largest naval battles of history, and the Cantonese had to recognize Kublai Khan as their emperor, they may have begun soon thereafter to take solace in the idea expressed in the proverb.
He's up there in his "stately pleasure dome," and we're here shaking down air conditioner makers.
13 September 2008
If all is going well
My travels are now far advanced.
In recognition of that fact, I thought that for this day I'd post a subway map, and a link to another.
The above map is for the subways of Seoul, Korea.
The link here will take you to a similar map for Hong Kong.
I love the stylization of such maps. They remind me of medieval art, before naturalism or even before perspective.
A subway map is like the Bayeau Tapestry a bit of which is here. for your own comparative purposes!
03 May 2008
The Path of the Olympic Torch
Here, just in case you're wondering, is a selective chronology of the Olympic torch's meandering progress toward Beijing.
March 24, the lighting ceremony in Greece, followed by six days of relays within that country, before the torch bearer flies to Russia. The final day's events have to be cut short due to Tibet-related protests.
April 6, Britain. The first major disruption as the flame is passing through London. Bobbies make 37 arrests.
April 9, the US. Authorities make a last-minute change in the route through San Francisco (the only US city visited) in order to confuse protestors.
April 10, The president of the IOC dismisses suggestions that the relay be curtailed.
April 13, Tanzania, The only stop on the continent of Africa. Itinerary takes torch through the capital city, Dar es Salaam. No incidents.
April 17, India. At least 170 Tibetan monks are arrested near the relay route in New Delhi.
April 22, Indonesia. The torch paraded at an invitation-only event in Jakarta held under very heavy security. It sputters out and has to be re-lit.
April 26, Japan. There are scuffles in the ski-resort town of Nagano, where more than 85,000 people packed the streets, and at least 4 people were injured, despite the presence of 3,000 police.
May 2, China. Flame arrives at the destination country (though there's a good deal of travelling ahead for it.) Hong Kong.
May 3, Macau. (This was yesterday, as I'm typing these words on the other side of the date line from Macau.) No disruptions -- the torch was guarded through Macau by two columns of paramilitary police. Spectators chanting "Go China."
The flame is scheduled to visit Tibet in the middle of June. That may be interesting.
March 24, the lighting ceremony in Greece, followed by six days of relays within that country, before the torch bearer flies to Russia. The final day's events have to be cut short due to Tibet-related protests.
April 6, Britain. The first major disruption as the flame is passing through London. Bobbies make 37 arrests.
April 9, the US. Authorities make a last-minute change in the route through San Francisco (the only US city visited) in order to confuse protestors.
April 10, The president of the IOC dismisses suggestions that the relay be curtailed.
April 13, Tanzania, The only stop on the continent of Africa. Itinerary takes torch through the capital city, Dar es Salaam. No incidents.
April 17, India. At least 170 Tibetan monks are arrested near the relay route in New Delhi.
April 22, Indonesia. The torch paraded at an invitation-only event in Jakarta held under very heavy security. It sputters out and has to be re-lit.
April 26, Japan. There are scuffles in the ski-resort town of Nagano, where more than 85,000 people packed the streets, and at least 4 people were injured, despite the presence of 3,000 police.
May 2, China. Flame arrives at the destination country (though there's a good deal of travelling ahead for it.) Hong Kong.
May 3, Macau. (This was yesterday, as I'm typing these words on the other side of the date line from Macau.) No disruptions -- the torch was guarded through Macau by two columns of paramilitary police. Spectators chanting "Go China."
The flame is scheduled to visit Tibet in the middle of June. That may be interesting.
29 January 2008
Chapter Four
Continuing my reading of the Nicky Marsh book.
In chapter four, Ms Marsh turns her attention to works she evidently considers not-very-literary, low brow potboilers. These are the finance world's equivalent of John Grisham or Tom Clancy.
She says that there was a "rash of novels" that applied thriller conventions to the world of finance not long after the arrest of Nick Leeson at Frankfurt Airport in March 1995.
The resulting novels seem to be read largely by people with connections to the finance industry themselves, and to be read as if they're in code, in an effort to dope out who or what is the story-behind-the-story. One such author, Paul Kilduff, posts appreciative reader e-mails on his website and Marsh quotes a bit of that.
"Is your story really based on true facts? If yes, could you indicate to me a web site where I could access the information you used to write your novel? All I recognized was the LTCM bankruptcy in the first part of the book."
His readers have an eye for detail, and want to be helpful, as shown by other examples Marsh quotes. "And in HK the main MTR interchange is Admiralty not Central...the DAX is not the name for the German Stock Exchange. It is the name for the German counterpart of the Dow Jones," and so forth.
If this makes any one curious to see that website, feel free.
Just Click Here.
In chapter four, Ms Marsh turns her attention to works she evidently considers not-very-literary, low brow potboilers. These are the finance world's equivalent of John Grisham or Tom Clancy.
She says that there was a "rash of novels" that applied thriller conventions to the world of finance not long after the arrest of Nick Leeson at Frankfurt Airport in March 1995.
The resulting novels seem to be read largely by people with connections to the finance industry themselves, and to be read as if they're in code, in an effort to dope out who or what is the story-behind-the-story. One such author, Paul Kilduff, posts appreciative reader e-mails on his website and Marsh quotes a bit of that.
"Is your story really based on true facts? If yes, could you indicate to me a web site where I could access the information you used to write your novel? All I recognized was the LTCM bankruptcy in the first part of the book."
His readers have an eye for detail, and want to be helpful, as shown by other examples Marsh quotes. "And in HK the main MTR interchange is Admiralty not Central...the DAX is not the name for the German Stock Exchange. It is the name for the German counterpart of the Dow Jones," and so forth.
If this makes any one curious to see that website, feel free.
Just Click Here.
06 January 2008
Never Enough
I'm following up my post of Friday about Joe McGinniss and his new true-crime book, Never Enough.
One of the questions I'm left with here is: so what ever happened to the Bank of China deal? It's a loose end that a more careful author (even one without my job or obsessions) might have tied.
For McGinniss makes a good deal of fuss about it. The victim of the murder at the heart of the book, Rob Kissel, is a distressed-asset expert for Merrill Lynch, posted in Hong Kong.
Distressed assets are what the term suggests. Bonds from bankrupt corporations qualify, for example. Of course, such a bond might become a worthwhile asset over time, as the corporation is restructured. The bonds might be paid off, or might be transformed into equity, in the next incarnation of that corporation. In the immortal words of Kenny Rogers, "you gotta know when to hold 'em, know when to fold 'em."
So it was an important matter for Kissel that, in 2003, the Bank of China -- an institution, I am told, that has one of the most impressive skyscrapers in the Hong Kong skyline -- decided to fold in this game. It announced an auction of its portfolio of distressed assets.
How much to bid? That was the question for Kissell and his team at Merrill. His right hand man in putting the bid together was a fellow named David Noh.
On the very day that Kissel was to have taken part in a crucial conference call about this auction, his wife fed him the infamous drug-laced milkshake and did the rest of the dirty deed. She then hid the body in a rolled-up carpet, and started calling people, telling them that her husband was missing.
So for a short period, this was a missing-person's case. But David Noh was aware early on that Kissel didn't simply take off on a whim. He wouldn't have missed that conference call as the Bank of China deal was coming to a head unless something terrible had happened.
And so it goes. I'll spare you the melodrama, except to come back to the point with which I began. Why doesn't McGinniss tell us what happened to the B of C deal? Did Noh and the rest of the team at Merrill pull themselves together and proceed without him? Which institution ended up getting the B of C's distressed debts?
Nothing more. I'll see if I can contact McGinniss and ask.
One of the questions I'm left with here is: so what ever happened to the Bank of China deal? It's a loose end that a more careful author (even one without my job or obsessions) might have tied.
For McGinniss makes a good deal of fuss about it. The victim of the murder at the heart of the book, Rob Kissel, is a distressed-asset expert for Merrill Lynch, posted in Hong Kong.
Distressed assets are what the term suggests. Bonds from bankrupt corporations qualify, for example. Of course, such a bond might become a worthwhile asset over time, as the corporation is restructured. The bonds might be paid off, or might be transformed into equity, in the next incarnation of that corporation. In the immortal words of Kenny Rogers, "you gotta know when to hold 'em, know when to fold 'em."
So it was an important matter for Kissel that, in 2003, the Bank of China -- an institution, I am told, that has one of the most impressive skyscrapers in the Hong Kong skyline -- decided to fold in this game. It announced an auction of its portfolio of distressed assets.
How much to bid? That was the question for Kissell and his team at Merrill. His right hand man in putting the bid together was a fellow named David Noh.
On the very day that Kissel was to have taken part in a crucial conference call about this auction, his wife fed him the infamous drug-laced milkshake and did the rest of the dirty deed. She then hid the body in a rolled-up carpet, and started calling people, telling them that her husband was missing.
So for a short period, this was a missing-person's case. But David Noh was aware early on that Kissel didn't simply take off on a whim. He wouldn't have missed that conference call as the Bank of China deal was coming to a head unless something terrible had happened.
And so it goes. I'll spare you the melodrama, except to come back to the point with which I began. Why doesn't McGinniss tell us what happened to the B of C deal? Did Noh and the rest of the team at Merrill pull themselves together and proceed without him? Which institution ended up getting the B of C's distressed debts?
Nothing more. I'll see if I can contact McGinniss and ask.
30 May 2007
East Asian iPods
In Saturday's entry, I wrote about a recent deal between the People's Republic of China and a US-based private equity firm.
I suggested that the deal was a sign of some onrushing realities, and that the integration of the PRC with the rest of the world's economy would be THE big financial/business story for decades to come.
Today I wish to add a pop-cultural angle to that observation. AFP [Agence France-Presse] has a story on a new survey of the musical tastes of thousands of young people in Asia (defined as Taiwan, China, Philippines, Singapore, Hong Kong, South Korea, Malysia, India, Thailand and Indonesia). The surveyers asked them, in essence: what is in your iPod?
They seem to have been somewhat surprised that only two Western bands showed up as favorites -- Black-Eyed Peas and Linkin Park.
Even those two acts trailed far behind Taiwan's rapper Jay Chou, Singapore pop star J.J. Lin and Hong Kong's Andy Lau.
At a two-day gathering of Asian music industry bigwigs in Hong Kong, Ian Stewart shared these results with his peers. Stewart, VP of marketing and research at MTV Networks Asia, said "that Asians have more pride in their local artists."
From the AFP story, I can't really be sure what the word "more" means in that sentence. More than last year? a decade ago? It clearly means "more than the pollsters' expectations," but the story also characterizes the survey as the first of its kind, so strictly a trend can'e be established until someone does it again.
Still, the implication seems to be that the Orient has learned what it needs to learn musically from the West (and is listening to music on a technology developed in Silicon Valley, after all) but is now re-asserting itself.
Such self-assertion can get rocky, and the west ought to be ready for that. Maybe by listening to Jay Chou, J.J. Lin and Andy Lau?
I suggested that the deal was a sign of some onrushing realities, and that the integration of the PRC with the rest of the world's economy would be THE big financial/business story for decades to come.
Today I wish to add a pop-cultural angle to that observation. AFP [Agence France-Presse] has a story on a new survey of the musical tastes of thousands of young people in Asia (defined as Taiwan, China, Philippines, Singapore, Hong Kong, South Korea, Malysia, India, Thailand and Indonesia). The surveyers asked them, in essence: what is in your iPod?
They seem to have been somewhat surprised that only two Western bands showed up as favorites -- Black-Eyed Peas and Linkin Park.
Even those two acts trailed far behind Taiwan's rapper Jay Chou, Singapore pop star J.J. Lin and Hong Kong's Andy Lau.
At a two-day gathering of Asian music industry bigwigs in Hong Kong, Ian Stewart shared these results with his peers. Stewart, VP of marketing and research at MTV Networks Asia, said "that Asians have more pride in their local artists."
From the AFP story, I can't really be sure what the word "more" means in that sentence. More than last year? a decade ago? It clearly means "more than the pollsters' expectations," but the story also characterizes the survey as the first of its kind, so strictly a trend can'e be established until someone does it again.
Still, the implication seems to be that the Orient has learned what it needs to learn musically from the West (and is listening to music on a technology developed in Silicon Valley, after all) but is now re-asserting itself.
Such self-assertion can get rocky, and the west ought to be ready for that. Maybe by listening to Jay Chou, J.J. Lin and Andy Lau?
17 May 2007
Plot Summary
I discussed the book, Ugly Americans, in Monday's entry. Today I thought I'd offer a plot summary. In coming days I hope to make inquiries into the history behind it, how true a story it is/isn't.
We're told that in 1992, twenty Ivy League football players visited Japan, to play an exhibition game against Japanese college kids. Of course, American football isn't big in Japan, and the Ivy team (which would have been mincemeat before, say, the Boilermakers or the Sooners on even a bad year for either of the latter) handily defeated the Japanese who lent themselves to the show.
On this trip, Princeton's contribution to that all-star-Ivy team, John Malcolm, encountered a Princeton alum, Dean Carney. (I'll use their names as given in the book here. For their likely real names, see Monday's post.) Carney was a big-wheel at Kidder Peabody's Tokyo office, and he suggested Malcolm contact him about a job if no pro football career panned out.
None did, so Malcolm did, in 1993. Malcolm became one of KP's two Osaka-based traders. This lasted until April 1994, when KP discovered a $350 million "accounting glitch," and assigned responsibility for the glitch to one of its managing directors, Joseph Jett. KP (and its corporate parent, General Electric) made sweeping cutbacks in their trading operations as a result. Both Carney and Malcolm -- neither of whom had anything to do with Jett's accounting trickery -- were out of jobs, and they went their separate ways.
Malcolm took a position with a venerable English bank, Barings. He was again to work out of Osaka, but this time his orders were coming from Singapore, where Barings' star trader, Nick Leeson, held court.
Leeson, though, was making huge unauthorized trades during this period, and he was losing ... big. In January 1995 he made an enormous bet on a rise in the key Japanese stock exchange index, known as the Nikkei ... large enough so that if he won, he would recover all his losses. But of course he didn't win. That huge bet went against him, due to the Kobe earthquake January 17, and its devastating effects on Japan's economy.
After a brief period as a fugitive, Leeson was captured and did prison time. That didn't save Barings, which went into receivership. For the second time in eight months, a superiors malfeasance had cost Malcolm a job.
He called Carney for help. Carney, meanwhile, had founded a hedge fund, and Malcolm was soon trading for it. Mostly index arbitrage. What does that mean? In brief, there were by the 1990s funds in existence tracking most of the world's major stock market indexes. The idea is that someone might want to bet on the direction of, say, the Dow Jones, without having to invest in each of its component stocks. The managers of the index fund, by pooling a lot of investors' money, can of course more easily invest (according to their weight) in each of the components, and all the investors have to watch is the average itself. An "arb play" in this context means that a trader buys the components while selling the index-tracker fund, or vice versa, in order to take advantage of inefficiencies in the tracking process.
Anyway, Carney hired Malcolm again to come to Tokyo and arb the Nikkei and its components.
In 1994, the Hong Kong government created a tracker fund for the Hang Seng -- its equivalent of the Dow Jones or the Nikkei. [BLOGGER CORRECTION. The Mezrich account makes these dates seem plausible by a gross foreshortening of the events. The tracker fund actually came about as a result of actions taken by the government during the currency crisis of 1998.] In 1995, after Malcolm was settled into his Tokyo job, a company named Pacific Century Cyberworks (PCC) merged with Hong Kong Telecom, and under the terms of the tracker funds' charter, its managers had to buy $225 million worth of PCC stock. [AGAIN. MY MISTAKE, though with authorial encouragement. Mezrich is referring here to events of the year 2000].
Everybody knew it was going to have to do this, so a lot of traders tried to get a risk-free profit by front-running this deal, i.e. buying PCC stock ahead of the fund's expected purchases.
Malcolm, though, discovered that the tracker fund wasn't going to buy the PCC stock through the exchanges at all. It made a private off-exchange deal with PCC's founder Richard Li. This meant that, when the day of the expected fund purchases arrived and no purchases took place, there'd be a strong downward pressure on the stock price.
Accordingly, on Malcolm's suggestion, Carney's hedge fund took a "short" position on $100 million of PCC stock. When the big day arrived, and the tracking fund didn't make the expected purchases, the price dropped dramatically, and Malcolm covered the short position, winning his firm more than twenty million dollars.
This one deal made Malcolm a star, known to expat western traders throughout east Asia as their "hot young gunslinger."
The ending of the book turns on another, quite similar, but even larger deal involving the addition of several high-tech firms to the Nikkei index. This is the deal that justifies the book -- Malcolm made Carney's firm five hundred million dollars in cash out of the restructuring of the Nikkei.
Then Malcolm leaves Carney's employ and heads for semi-retirement in Bermuda, although we're told he still does some light trading.
That's not the whole of the story, of course. There are some characters -- including Ivy Leaguers, other than just Carney and Malcolm. In the days leading up to the Hang Seng trade, for example, we're introduced to "Vince Meyer" (another pseudonym, surely), described as "the top trader of one of the biggest American banks in Hong Kong" who gives Malcolm a crucial datum. Meyer is a Harvard grad.
There's also some raw sex, some hinted-at violence, one vividly described auto accident, and some romance to liven up the prose, for those who don't think that index arb traders sitting in front of computer screens throughout the working day is by itself a very exciting spectacle even if it is profitable.
We're told that in 1992, twenty Ivy League football players visited Japan, to play an exhibition game against Japanese college kids. Of course, American football isn't big in Japan, and the Ivy team (which would have been mincemeat before, say, the Boilermakers or the Sooners on even a bad year for either of the latter) handily defeated the Japanese who lent themselves to the show.
On this trip, Princeton's contribution to that all-star-Ivy team, John Malcolm, encountered a Princeton alum, Dean Carney. (I'll use their names as given in the book here. For their likely real names, see Monday's post.) Carney was a big-wheel at Kidder Peabody's Tokyo office, and he suggested Malcolm contact him about a job if no pro football career panned out.
None did, so Malcolm did, in 1993. Malcolm became one of KP's two Osaka-based traders. This lasted until April 1994, when KP discovered a $350 million "accounting glitch," and assigned responsibility for the glitch to one of its managing directors, Joseph Jett. KP (and its corporate parent, General Electric) made sweeping cutbacks in their trading operations as a result. Both Carney and Malcolm -- neither of whom had anything to do with Jett's accounting trickery -- were out of jobs, and they went their separate ways.
Malcolm took a position with a venerable English bank, Barings. He was again to work out of Osaka, but this time his orders were coming from Singapore, where Barings' star trader, Nick Leeson, held court.
Leeson, though, was making huge unauthorized trades during this period, and he was losing ... big. In January 1995 he made an enormous bet on a rise in the key Japanese stock exchange index, known as the Nikkei ... large enough so that if he won, he would recover all his losses. But of course he didn't win. That huge bet went against him, due to the Kobe earthquake January 17, and its devastating effects on Japan's economy.
After a brief period as a fugitive, Leeson was captured and did prison time. That didn't save Barings, which went into receivership. For the second time in eight months, a superiors malfeasance had cost Malcolm a job.
He called Carney for help. Carney, meanwhile, had founded a hedge fund, and Malcolm was soon trading for it. Mostly index arbitrage. What does that mean? In brief, there were by the 1990s funds in existence tracking most of the world's major stock market indexes. The idea is that someone might want to bet on the direction of, say, the Dow Jones, without having to invest in each of its component stocks. The managers of the index fund, by pooling a lot of investors' money, can of course more easily invest (according to their weight) in each of the components, and all the investors have to watch is the average itself. An "arb play" in this context means that a trader buys the components while selling the index-tracker fund, or vice versa, in order to take advantage of inefficiencies in the tracking process.
Anyway, Carney hired Malcolm again to come to Tokyo and arb the Nikkei and its components.
In 1994, the Hong Kong government created a tracker fund for the Hang Seng -- its equivalent of the Dow Jones or the Nikkei. [BLOGGER CORRECTION. The Mezrich account makes these dates seem plausible by a gross foreshortening of the events. The tracker fund actually came about as a result of actions taken by the government during the currency crisis of 1998.] In 1995, after Malcolm was settled into his Tokyo job, a company named Pacific Century Cyberworks (PCC) merged with Hong Kong Telecom, and under the terms of the tracker funds' charter, its managers had to buy $225 million worth of PCC stock. [AGAIN. MY MISTAKE, though with authorial encouragement. Mezrich is referring here to events of the year 2000].
Everybody knew it was going to have to do this, so a lot of traders tried to get a risk-free profit by front-running this deal, i.e. buying PCC stock ahead of the fund's expected purchases.
Malcolm, though, discovered that the tracker fund wasn't going to buy the PCC stock through the exchanges at all. It made a private off-exchange deal with PCC's founder Richard Li. This meant that, when the day of the expected fund purchases arrived and no purchases took place, there'd be a strong downward pressure on the stock price.
Accordingly, on Malcolm's suggestion, Carney's hedge fund took a "short" position on $100 million of PCC stock. When the big day arrived, and the tracking fund didn't make the expected purchases, the price dropped dramatically, and Malcolm covered the short position, winning his firm more than twenty million dollars.
This one deal made Malcolm a star, known to expat western traders throughout east Asia as their "hot young gunslinger."
The ending of the book turns on another, quite similar, but even larger deal involving the addition of several high-tech firms to the Nikkei index. This is the deal that justifies the book -- Malcolm made Carney's firm five hundred million dollars in cash out of the restructuring of the Nikkei.
Then Malcolm leaves Carney's employ and heads for semi-retirement in Bermuda, although we're told he still does some light trading.
That's not the whole of the story, of course. There are some characters -- including Ivy Leaguers, other than just Carney and Malcolm. In the days leading up to the Hang Seng trade, for example, we're introduced to "Vince Meyer" (another pseudonym, surely), described as "the top trader of one of the biggest American banks in Hong Kong" who gives Malcolm a crucial datum. Meyer is a Harvard grad.
There's also some raw sex, some hinted-at violence, one vividly described auto accident, and some romance to liven up the prose, for those who don't think that index arb traders sitting in front of computer screens throughout the working day is by itself a very exciting spectacle even if it is profitable.
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