Monday, August 31, 2009

China's Domestic Consumption - Glass Half Full or Half Empty

The following table by McKinsey was highly illuminating. It puts into sparkling perspective how important private domestic consumption is to each country as a percentage of GDP. One should always strive to be more led by domestic consumption as that usually means a better grasp and control of an economy's fortunes. China has been desperately trying to lead the world back from the diminished global trade due to the recent global financial crisis by shifting from an investment led economy to a more domestic driven type. As the table shows, its a long uphill climb still. Thats the negative way of looking at things - the half full view would be that there is still a lot China can do (and will do) to ramp up its domestic economy, and it will only means more consumption of global goods and services in the long run. Its going to be the Asian century mainly by moving just 10%-20% of the rural folks in China and India into the middle class consumption category.

On a side note, Malaysia's domestic consumption as a percentage of GDP is high enough but the major caveat about looking at tables such as these is that if your population is smallish, the high private domestic consumption percentage figure is too one dimensional. If your population is say less that 50m, you probably HAVE to be led by investment as a priority as your population will not be able to generate sufficient critical mass of demand for your industries to compete on a global scale with the economies of scale that is needed.


p/s photos: Jessica Gomes

Sunday, August 30, 2009

Monetary Authority of Singapore Tries To Sue Pheim

Morningstar ranked Pheim ASEAN Emerging Companies Growth Fund ranked No. 1 for the 1-year, 3-year, 7-year, 10-year and 14-year periods for the Morningstar Category ASEAN Equity Funds as at June 2009.

First, let me say that I like CK Tan a lot, I think he is quite a brilliant fund manager. Besides being an outstanding long term outperformer, I also absolute share his view on the local market, this was uttered by Tan some 13 years ago: Pheim Asset Management CEO Tan Chong Koay believes that a buy-and-hold strategy is not appropriate for Malaysia's volatile market. Tan states that investors need to bet on the sharp swings of the market if they are to succeed in Malaysia.

It is being closely watched in the investment community, as Tan is well-known in fund management circles. Also, the case touches on the practice of “window-dressing” where big investors may try to ramp up or push down share prices — a key concern at the year-end when the value of a fund is determined.

Pheim Malaysia's case is it had already invested in the company when it was floated on the stock exchange earlier in the year. Its investment committee was keen to buy more United Envirotech shares, on the back of its success in investing in Hyflux. There were three funds in question — but under Malaysian rules, each fund could not hold more than 10 per cent of foreign (non-Malaysian) stocks. So it was only after these three funds had sold off some Singapore stocks on Dec 28, that the firm was able to buy into United Envirotech. Pheim Malaysia argues that it was a genuine investor, believing the shares were undervalued in 2004.

My views in brackets.

UET shares are the subject of a High Court lawsuit. The Monetary Authority of Singapore is suing Tan Chong Koay and his Malaysian fund Pheim Asset Management for alleged false trading in UET shares in December 2004.

Justice Lai Siu Chiu heard evidence yesterday from former UOB Kay Hian broker Tang Boon Siah, who said he received 'discretion' orders from Pheim Malaysia to buy about $100,000 of UET shares on Dec 29, 30 and 31, 2004 and filled these orders slowly, and mostly at the end of each trading day, because the stock was illiquid.

Examined by Pheim's lawyer Foo Maw Shen of Rodyk & Davidson, Mr Tang said he mostly lifted offers from the sell queue and waited as long as he could between trades so prospective sellers might appear. Even then he was unable to completely fill the order, but the price changes on each trading day did not exceed 20 per cent, he said. (Filling an illiquid order is a very difficult task, the broker did the right stuff, waited till end of the day before taking out the sellers queue, and he also ensured that it did not exceed 20% price movement daily. (Nothing sinister here).

Mr Tang said he kept in frequent telephone contact with Mr Tan on Dec 30 and 31, 2004 to update the latter on the status of the market. Mr Tan is represented in the case by Senior Counsel Michael Hwang. MAS, represented by Senior Counsel Cavinder Bull of Drew & Napier, alleges Mr Tan and Pheim created a false market in UET shares by their purchases, especially when timed so close to the end of the year. The purchases were also made mostly at the end of each trading day. (Mr. Bull is obviously deluded as to why shares had to be done mainly at the end of the day, this is to prevent other speculative buyers jumping in thus driving the shares up even more. By definition, a false market is WHEN YOU LITERALLY CONTROLS THE BUYERS SIDE AND THE SELLERS SIDE - if Phiem really did try to create a false market, then by all means the genuine sellers would dump their shares when the share price moved up day by day, Pheim was not selling).

The purchases caused the share price to close significantly higher and created a false and misleading appearance in the market, Mr Bull argued. This contravened Section 197(1)(b) of the Securities and Futures Act, he said. (OMG, MAS and Mr. Bull, why bother with this frivolous and naive lawsuit even. It was not a one day affair, it was spread out over 3 days. Did it amount to trying to close the share price at a certain level, or was it due to a genuine attempt to buy more shares).

Mr Tan and Pheim deny the accusations, saying the purchases were legitimate commercial transactions. Former HSBC Securities managing director Christopher Chong is expected to take the stand as an MAS expert witness on Monday when the hearing resumes. The defendants have called Nels Radley Friets - chairman of the Singapore Exchange and Catalist disciplinary committees, but appearing in his private capacity as their expert witness.

Aug. 28 (Bloomberg) -- Singapore’s central bank sued Pheim Asset Management Pte Chief Executive Officer Tan Chong Koay and the fund manager’s Malaysian unit for manipulating the shares of a water treatment company.

Tan and Pheim Asset Management Sdn. bought almost 90 percent of the traded shares of Singapore-based UET from Dec. 29 to Dec. 31, 2004, according to a statement presented to Singapore’s High Court by the Monetary Authority of Singapore's lawyers Drew & Napier LLC yesterday.

That created a “false or misleading appearance” of the market and the company’s stock, Cavinder Bull, a lawyer with Drew & Napier, said in the statement. The share purchase raised the net asset value of Pheim’s accounts, triggering outperformance bonuses of S$50,790 ($35,218) and an additional management fee of S$115, lifting the reputation of the fund manager, Bull said in the statement. (This is so laughable. A performance bonus of nearly S$61,000. Can someone please clarify what is Tan's net worth in 2004? I mean, the "reasonable man" defense here would tear this to shreds).

Pheim and Tan wouldn’t have been motivated by the “insignificant” amounts, according to a court statement from their lawyers. They “had no intention to create a false or misleading appearance,” according to the statement. United Envirotech shares were undervalued and the purchases were “part of a legitimate and genuine investment strategy,” it said.

UET price movements during that period were “a reflection of genuine demand and supply,” and the stock was “illiquid” and “volatile,” according to the statement. Pheim bought the shares for 38.4 Singapore cents to 43.9 Singapore cents each in December 2004. The shares climbed 17 percent from Dec. 29 to Dec. 31 that year.

“This was not the conduct of a genuine buyer seeking to buy shares at the lowest possible price,” the central bank said in its court filing. “Such a genuine buyer would have spread out the purchases of a thinly traded stock in order to avoid spikes in the prices.” (Not necessarily as the record should show that even as prices went higher with each progressive day, there were no excited sellers of the shares or else Pheim would have had the opportunity to buy a lot more shares. It was obvious that the shares were tightly held. MAS might as well GO AND SUE THE SHAREHOLDERS OF UTC WHO DID NOT SELL THEIR SHARES when Pheim started to buy the shares aggressively, does the fact that they did not sell to an irrational share price rise amount to stupidity or an act to collude with Pheim to allow the share prices to go even higher??).

Tan will call Nels Friets, chairman of the disciplinary committee of Catalist, the small-caps board of the SGX, as an expert witness in his defense. The central bank has called Christopher Chong, former managing director of HSBC Securities Pte, as its expert witness. Tan couldn’t immediately be reached for comment. The central bank declined to comment on on-going legal proceedings. Tan and Pheim may be fined between S$50,000 and S$2 million if found guilty, according to the court filing.

Pheim, founded by Tan in 1994, manages more than US$1 billion and counts the GIC and Malaysia’s Employee Provident Fund among its clients, according to its Web site. Tan, who has offices in Singapore and Malaysia, once jokingly said that Pheim was a made-up word which means Please Help Everyone Invest Money.

The case is Monetary Authority of Singapore and Tan Chong Koay, Pheim Asset Management Sdn Bhd., 658/2008/P in the Singapore High Court.

MAS should have a lot more things on their plate than to go for somebody like Pheim. Such a waste of resources and time.

p/s photos: Eri Otoguro

Friday, August 28, 2009

Ooops! We Didn't Mean For You To Find Out

Many investors regard analyst reports with a lot of reservation and cynicism, and rightly so. Finally, somebody has dug up enough dirt and evidence. The fact that its Goldman Sachs will mean the regulators and politicians will be sharpening their knives for the kill. Goldman Sachs will get a major major fine here. When an investment bank relies so much on trading for such a huge slice of their profits, and where profits contribution is regarded so highly, where you bonuses and promotion will be materially affected when you "contribute well", its hard not to have shenanigans sprouting everywhere - the smart ones don't get caught. There are always someone somewhere who will get the tip earlier than you, and by the time it is printed, rest assured the thing has been double-dipped already.

WSJ: Goldman Sachs research analyst Marc Irizarry's published rating on mutual-fund manager Janus Capital Group Inc. was a lackluster "neutral" in early April 2008. But at an internal meeting that month, the analyst told dozens of Goldman's traders the stock was likely to head higher, company documents show (the following day apparently).

The next day, research-department employees at Goldman called about 50 favored clients of the big securities firm with the same tip
, including hedge-fund companies Citadel Investment Group and SAC Capital Advisors, the documents indicate. Readers of Irizarry's research didn't find out he was bullish until his written report was issued six days later, after Janus shares had jumped 5.8%.

[Goldman's Trading Tips Reward Its Biggest Clients]

Every week, Goldman analysts offer stock tips at a gathering the firm calls a "trading huddle." But few of the thousands of clients who receive Goldman's written research reports ever hear about the recommendations.

At the meetings, Goldman analysts identify stocks they think are likely to rise or fall due to earnings announcements, the direction of the overall market or other short-term developments. Some of their recommendations differ from ratings printed in Goldman's widely circulated research reports. Some Goldman traders who make bets with the firm's own money attend the meetings. Critics complain that Goldman's distribution of the trading ideas only to its own traders and key clients hurts other customers who aren't given the opportunity to trade on the information.

Securities laws require firms like Goldman to engage in "fair dealing with customers," and prohibit analysts from issuing opinions that are at odds with their true beliefs about a stock. Steven Strongin, Goldman's stock research chief, says no one gains an unfair advantage from its trading huddles, and that the short-term-trading ideas are not contrary to the longer-term stock forecasts in its written research.

Former Goldman client George Klopfer of Park City, Utah, who was unaware of the trading tips until recently, says the practice is unfair. "When I joined Goldman as a client, I got all these fancy brochures saying they put the client first," he says. "I just don't want to have to worry about them or big clients trading on stuff like this. I was at the end of the food chain." He says he pulled out most of the $20 million in his account earlier this year after losing money on several Goldman funds. Goldman says individual clients like Mr. Klopfer typically have a long-term investing approach and are not focused on individual stocks.

Since the trading huddles began about two years ago, Goldman has supplied "trading ideas" on hundreds of stocks to the traders and top clients, according to internal documents reviewed by The Wall Street Journal.

Goldman spokesman Edward Canaday says the tips are "market color" and "always consistent with the fundamental analysis" in published research reports. " (My, talk about the ability to b.s.). Analysts are expected to discuss events that may have a near-term or short-term impact on a stock's price," he says, even if that is a different direction from an analyst's overall forecast. Goldman's published research reports include a disclosure that "salespeople, traders and other professionals" may take positions that are contrary to the opinions expressed in reports. But the firm doesn't disclose the trading huddles. (In effect, some of the better trading ideas would have Goldman traders and inner circle of important clients betting ahead of the pack... how is that not against the law, its called front running).

Mr. Canaday says analysts are told that any comment at a meeting that could result in a change in a rating, earnings estimate or stock-price target "must be published and disseminated broadly to all clients." He adds, however, that it is rare that tips arising from the meetings reach that threshold. He says ratings changes after the meetings also are rare.

The tips usually go to top clients who have expressed interest in having the information and have short-term investment horizons, he says. Goldman doesn't want to overload other clients with information that isn't relevant to them, he says. "We are not in the business of serving thousands of retail customers," he says.

At least one competitor discloses such trading tips much more broadly. Morgan Stanley's research department sends blast emails with short-term views on various stocks to thousands of clients, and posts the information on its Web site. It doesn't call customers to convey the tips, because Morgan Stanley officials decided that could expose the firm to questions about selective disclosure, according to people familiar with the matter. (At least there is still some body operating with some principles).

Critics of Goldman complain that the firm's limited distribution of trading tips hurts small customers who don't share the information. "The spirit of the law is twofold," says Eric Dinallo, who in 2003, when serving as a deputy to former New York Attorney General Eliot Spitzer, helped negotiate a $1.4 billion stock-research settlement with 10 major Wall Street firms, including Goldman. "Analysts should give consistent advice to all their customers, be they small investors or big trading clients." Any views that differ from an analyst's published rating but are "worth sharing with certain customers," he says, should be made "available to everyone."

The 2003 case involved allegations that Wall Street firms were issuing overly optimistic stock research in order to win more lucrative investment-banking business. The settlement, in which Goldman and the other firms didn't admit or deny wrongdoing, erected walls between research and investment banking. Securities laws currently require research analysts to personally certify that their reports accurately reflect their views of a stock.

Some analysts have gotten into big trouble by contradicting themselves. In 2003, former Merrill Lynch & Co. technology analyst Henry Blodget agreed to a lifetime ban from the securities industry after touting stocks that he disparaged in private emails.

These days, analysts must juggle growing demands from trading units at their firms. Such operations have emerged as big moneymakers, fueling the record $3.44 billion in net income at Goldman in the second quarter. A large portion of Goldman's profit came from trades done for mutual funds, pension funds, endowments, hedge funds and other big institutional investors. Proprietary trading, in which Goldman makes bets with its own capital, accounts for about 10% of its profits.

Analysts have a financial incentive to give clients useful information. Goldman sets aside roughly 50% of money allotted each year to analyst compensation to distribute based on feedback from trading customers. The balance of analysts' pay is determined by the performance of their stock picks. That pay system is common among major Wall Street firms.

At many firms, traders, salespeople and analysts hold early-morning calls to review ratings changes, recommendations and market events. Throughout the day, analysts talk to key clients to help them interpret research reports and provide more detail on specific events such as earnings.

[Goldman's Trading Tips Reward Its Biggest Clients]

The research business is considered a loss leader at most firms, despite persistent attempts by Goldman and other securities giants to squeeze more revenue from it. Goldman was looking for a leg up on rivals when it started the trading huddles in 2007. That year, Goldman ranked ninth in Institutional Investor magazine's annual list of the best equity analysts, as determined by a survey of big institutional investors. Goldman was rated eighth in last year's competition.

The huddles began in earnest around the time Goldman's research department got a new boss, Strongin. He came to the firm in 1994 from the Federal Reserve Bank of Chicago, where he had been director of monetary-policy research. At Goldman, he had run the commodities-research operation, then was co-chief operating officer of the whole research unit, before being asked to run it in April 2007. Strongin, 51 years old, set out to improve Goldman's research operations. The firm asked important clients for suggestions. One idea that took hold was giving certain customers and traders more access to stock tips.

The idea was controversial with some Goldman research staffers. "I am not sure we should be giving recommendations that go against our research," said one Goldman employee at a meeting where the trading huddles were discussed, according to one attendee.

Laura Conigliaro, Goldman's co-head of research in the Americas region, replied at the meeting that the firm needed to respond to inevitable differences in the time horizons of investors. Issuing a short-term buy recommendation wasn't necessarily at odds with a lukewarm "neutral" rating for the long run, she added.

One recipient of the trading tips, Steve Eisman, a managing director of hedge fund Frontpoint Partners LLC, says that he likes the back-and-forth he now has with Goldman's analysts, and that he pays attention to some of the tips. "A few years ago, Goldman wouldn't make a negative call on anything," he says. "Now they say it like it is."

The huddles can last from 20 minutes to one hour, according to participants. Analysts are encouraged to bring a trading idea. They talk with Goldman traders about the financial markets and events that could trigger movement of specific stocks. Goldman specifies how long each recommendation is in effect, often one week.

At a huddle on July 31, for example, the firm's technology analysts and traders discussed more than a dozen stocks, ranging from Garmin Ltd. to Microsoft Corp. None of the analysts said anything that appeared to differ from their stock ratings.

Compliance officers sit in on almost all the meetings, Goldman says. Research analysts say they have been guided on what language to use in the huddles. Words like "buy" and "sell" are to be avoided, while "run up," "give back" and "oversold" are encouraged. Internal documents reviewed by the Journal initially tracked the trading-huddle tips as "buy" or "sell," but now refer to them as "up" or "down."

Research-department employees prepare telephone scripts, then call top clients, typically several hours after the meeting has ended. Goldman says its in-house traders are prohibited from trading on the tips until after they've been relayed to clients. (Yeah, sure...).

Documents reviewed by the Journal indicate that anywhere from six to 60 clients are contacted, depending on the investment. For example, clients specializing in financial stocks are given recommendations about that sector. Each call typically includes comments about the overall market and the kinds of investors Goldman believes are propelling it, and ends with a stock tip.

The meeting where Irizarry suggested that Janus shares were worth buying, held on April 2, 2008, was attended by Goldman's financial-research analysts and traders who handle customer orders. It also included another class of traders called "franchise risk managers," who sit with and advise the traders handling customer orders -- and make bets with Goldman's money.

Typically, traders who wager firm capital are walled off from those handling customer orders so that they don't take advantage of information about client trading, which securities regulations forbid. Goldman says its franchise risk managers don't trade on client information and must first share trading-huddle tips with clients before acting on the tips themselves.

At the April 2 meeting, Goldman says, Irizarry was expressing a sentiment about Janus similar to one contained in a report Goldman published the previous day. A chart in that report, Goldman says, cited a report from mutual-fund-research firm Morningstar Inc. that was positive on Janus. While internal documents show Irizarry's rating on Janus stock at the time was "neutral," they note the "price action expected" was "up." Irizarry declined to comment. The day after the meeting, Goldman told selected clients that "in particular, we highlight Janus," according to an internal document.

At the same April 2 trading huddle, Goldman analyst Thomas Cholnoky said he favored MetLife Inc. over other insurers, according to notes from the meeting. Internal documents indicate he believed the stock would rise over the short run. Hours after the meeting, Cholnoky released a research report that reiterated his "neutral" rating on MetLife, saying he hadn't changed his estimates. Goldman says his view about the company's favorable short-term prospects is clearly conveyed in a research note issued prior to the huddle, which said the insurer "stands to be the biggest beneficiary from the steepening yield curve."

A week later, Cholnoky boosted his rating on MetLife to a buy, and Goldman added the stock to its "America's Buy List" of top stock recommendations. Cholnoky said he expected MetLife's quarterly results, due in a few weeks, to "surprise on the upside." (The quarterly results, when they came out, did slightly.) Cholnoky, who no longer works at Goldman, didn't respond to messages seeking comment.

Goldman says that in both these cases the analysts' views were consistent with the published research, which included a 12-month price target that was above each stock's price at the time.

Morgan Stanley also generates short-term views on various stocks, which it calls "Research Tactical Ideas" and distributes widely via email and the firm's Web site. In May, for example, it told clients that insurer Aflac Inc.'s earnings guidance would be "softer than many investors expect." Its rating on Aflac at the time was "neutral."

In its longer-term reports published by analysts, Morgan Stanley discloses that it issues such trading tips, and that the tips on any given stock "may be contrary to the recommendations or views expressed in this or other research on the same stock."

Last year, the Financial Industry Regulatory Authority, the industry's self-regulatory body, proposed new rules meant to clarify existing disclosure obligations under the rule requiring "fair dealing" with all clients. Firms could issue contradictory ratings as long as clients were told that such inconsistencies were possible.

A Finra spokesman said the agency still is reviewing comment letters filed in response to the proposal. Goldman hasn't commented on the proposed rules.

p/s photos: KC Concepcion

Thursday, August 27, 2009

Farmers, Sex Workers, Religious Workers, Soldiers & Students Can Be Trusted Best

This has to be the article of the year, and from China's China Daily no less :

At a time when shamelessness is pervasive, we are often at loss as to who can be trusted. The five most trustworthy groups, according to a survey by the Research Center of the Xiaokang Magazine, are farmers, religious workers, sex workers, soldiers and students.

A list like this is at the same time surprising and embarrassing. The sex business is illegal and thus underground in this country. The sex workers’ unexpected prominence on this list of honor, based on an online poll of more than 3,000 people, is indeed unusual.

It took the pollsters aback that people like scientists and teachers were ranked way below, and government functionaries (i.e civil servants / politicians), too, scored hardly better. Yet given the constant feed of scandals involving the country’s elite, this is not bad at all. At least they have not slid into the least credible category, which consists of real estate developers, secretaries (this one is weird but I think it has to do with access to the bosses and/or philandering with the bosses), agents (that's right, anyone with a job title that has the word "agent" to it cannot be trusted), entertainers and directors.

Yet given the constant feed of scandals involving the country's elite, this is not bad at all. At least they have not slid into the least credible category, which consists of real estate developers, secretaries, agents, entertainers and directors.

What is more worrisome in the findings is the dramatic drop in government credibility ratings. Which happens in the context of what pollsters term as "mild improvement" in public perception of society's credit conditions.

Drain of credibility

In spite of a continuous, though very slow, tilt to the positive in the public's perception of society's credit records, researchers detected a converse trend when it came to the government.

More than 91 per cent of the respondents admitted that they would take government data with a pinch of salt. The same proportion was 79 per cent in 2007. The steep decline, pollsters concluded, reflects a "quite severe" drain of government credibility, which is obvious in recent "mass incidents". In most recent cases of mass protests, distrust of local authorities turned out to be a powerful amplifier of public indignation.

Multiple factors may be responsible for this. The Xiaokang Magazine Research Center named four - protectionism, unstable policies, dumb decisions, and lack of transparency. All of which has to do with the low-level bureaucracy's lack of respect for public concerns.

This may sound strange, because, geographically, local governments and their staff are closer to local realities; and, politically, they are there to take care of the citizens' day-to-day concerns.

But since local cadres report only to their superiors, and their appointment, promotion and removal has little, or nothing, to do with the community they are supposed to serve, it is only natural that they are preoccupied overwhelmingly with pleasing their bosses. In contrast to the people-friendly image of the central leadership, local cadres, as a collective, share a much less desirable reputation for their indifference to, if not disregard of, citizens.

Even for stability's sake, efforts must be made to restore the governments' credit record. The first step, however, is to put an end to public servants being alienated from public interest.

It is obvious that the survey yielded some angry responses, the general public would vent their inner frustrations indirectly by naming unlikely groups. But I tend to believe that there is more truth to the final verdict. It is the public absolute abhorrence of protectionism (against foreign influence, against the internet access), unstable policies, dumb decisions, and lack of transparency. May I remind the people in power in other Asian countries (hint-hint) to read between the lines as these very same sentiments seem to be applicable in varying degrees for most other Asian countries.

They have highlighted farmers, sex workers, students, soldiers, civil servants, teachers, secretaries, religious workers, scientists, teachers, real estate developers, entertainers and directors (I believe these are board of directors of listed companies and not film directors ok) ... let's add a few more and see where they rank in your country: ruling politicians, opposition politicians, lawyers, judges, police, army, architects, engineers, doctors, economists, remisiers, analysts, mamak stall owners ... etc.. I guess my final word on this is that each profession comes with it certain elements of integrity, expected professionalism and some element of serving the people's needs or rather putting the needs of the nation before yours - when these elements are eroded deliberately or otherwise, you lose the respect and dignity that come with those positions, ... at least the sex worker will do what he/she says he/she will, not overcharge, satisfaction (usually) guaranteed.

In recent years, China has already paid a high price for the prevailing credibility crisis. The annual losses caused by bad debts have reportedly amounted to about 180 billion yuan, and the direct economic losses induced by contract fraud each year is also up to 5.5 billion yuan. Besides, shoddy and fake products contribute to another great loss involving at least 200 billion yuan. Generally, credibility crisis would cost China as much as 600 billion yuan every year. The shortage of credibility is not only seen in the market transactions, but in the officialdom as well. Corruption in any form is about to erode the faith of the general populace in authorities and officials at different levels.

Perhaps, the survey result can just give a restricted description on China’s credibility status, or people can take it with a grain of salt. But it did portray a picture of the spiritual outlook of today’s Chinese society, with money as the overriding motive. It is this that especially deserves attention.

If we were to do a survey in our country, wah-lau-eh ... (I am also sensing the PAPs shaking in their boots..).

p/s photos: Zhang Xin Yu (wanted to write "nice pussy" but thought that might be misinterpreted as rude or offensive)

Selamat Berpuasa ....

Selamat Berpuasa .....

Wednesday, August 26, 2009

I Have A Date With Spring / dama orchestra

Possibly the best Canto musical we have. The musical was based on a play by Raymond To Kwok Wai and was adapted into a film of the same name in 1994, directed by the under-rated Clifton Ko Chi Sum. The film had some of the better actresses (most of them grads from HK's Rep Theatre school) such as Law Koon Lan, Lau Ngar Lai and So Yuk Wah.

In the 14th Annual Hong Kong Film Awards, the film was heavily nominated and ended with 3 trophies:

  • Winner - Best Supporting Actress (Law Koon-Lan)
  • Winner - Best New Artist (Alice Lau Ar-Lai)
  • Winner - Best Screenplay (Raymond To Kwok-Wai
They missed out on the following but being nominated for a musical is a pretty big thing already:
  • Nomination - Best Picture
  • Nomination - Best Actress (Alice Lau Ar-Lai)
  • Nomination - Best Supporting Actress (Fung Wai-Hung)
  • Nomination - Best New Artist (Hui Fan)
  • Nomination - Best Original Score (Lee Hong-Gum, Wan Hol-Geen)

I thought I will be among the first few to book the tickets, but guess what, the better seats for the firat wekend are all gone. Had to book for Wednesday 14 October. Will be looking forward to watch and hear Tan Soo Suan, and my good friend Fang Chyi perform. See you there, book early! You have been warned.


Don’t miss this heart warming musical from an award-winning play.
Purchase ticket early and enjoy our special EARLY BIRD DISCOUNT.

For ticket purchase, kindly call 03 4047 9000 (KLPac) or 03 7711 5000 (Axcess).

A Malaysian premier not to be missed

Winner of the Best Screenplay Award at the Hong Kong Film Awards

Won critical acclaims for its stage productions in Hong Kong, Singapore and Shanghai

Come for a celebration of endearing friendship in Dama’s heart warming musical adaption of an award winning play, set against the night club scenes in the 60s to 80s. This high drama tapestry, weaved exquisitely with beautiful Chinese Oldies music and songs from the 60s to 80s, is brought to life by a very strong cast of 30 very talented Malaysian actors and actresses - led by TAN SOO SUAN in the role of Butterfly Liu - and Dama Orchestra. Come for a memorable encounter with terms of endearment in this latest Dama’s musical offering.

Musical adaptation of play by TO KWOK WAI

PUN KAI LOON producer / director
KHOR SENG CHEW producer / music director
GAN BOON WE concert master / asst. music director
MELISSA TEOH production stage manager / asst. director
WONG KIT YAW choreographer
DOMINIQUE DEVORSINE costume designer
LIM ANG SWEE lighting designer
LIM WAN YEE sound engineer
LEE JIN WEN dialect coach
TAN SOO SUAN vocal coach

Tan Soo Suan Janet Lee Chris Tong Chang Fang Chyi Steve Yap Nell Ng
Samuel Tseu Ling Tang Ho Soon Yoon Terry Siau Song-Fan Seah Jojo Wong
Teoh Sheew Yong Beauty Teoh Liow Swee Keong Rachel Tan
Tan Soo Sze Anrie Too Ng Pei Pei Keith Yew Chong Wey Yin
Tam Yee Swee Cassie Wong Leslie Cheng Roax Tan

DAMA ORCHESTRA: Gan Boon We Khor Seng Chew Loo Fung Chiat Loo Fung Ying
See Keh Fong Tee Hsien Onn Lai Foo Yuen Foo Chie Haur

Wo he chun tian you ge yue hui

Cantonese with English and Chinese surtitles

Date & Time OCTOBER
Evening (8.30pm): 10 (Sat) / 11 (Sun) / 14 (Wed) / 15 (Thu) / 16 (Fri) / 17 (Sat) / 18 (Sun) / 21 (Wed) / 22 (Thu) / 23 (Fri) / 24 (Sat) / 25 (Sun) Oct 2009
Matinee (3.00pm): 11 (Sun), 18 (Sun), 25 (Sun) Oct 2009

10 Oct 8.30pm
Fund Raising Musical for Nalanda Institute Building,
Education & Development Fund

Sponsored by John Master / Schwarzenbach / Kiko Amazing Kids
Ticket RM88 / RM128 / RM198 / RM298 / RM500
Enquiry GG Tan 016 209 0834 / Reena Tan 012 332 3787
Ee Kim Swee 012 345 4448 / Wai Chin 03 8948 8055

17 Oct 8.30pm
SP Setia Bhd Group Corporate Night

18 Oct 8.30pm
Charity Fund Raising Musical for Rotary Club of Petaling Jaya
Ticket Invitation by donation minimum RM300 Shireen Lim 016 227 0423
RM75 / RM115 / RM155 KLPac 03 4047 9000

24/25 Oct 8.30pm
Fund Raising Musical for Tzu-Chi Buddhist Merits Society
Sponsored by Live to Love / Yin Ngai Musical Arts & Association

Ticket Prices
Weekday Shows (Wed-Thu)
RM60 / RM95 / RM130 / RM165 / RM200 / RM235
Weekend Shows (Fri-Sun)
RM75 / RM115 / RM155 / RM195 / RM235 / RM275

Early Bird Discount:
20% off (Wed-Thu) and 15% off (Fri-Sun)
Discount Applicable from 23 Aug 2009 - 15 Sept 2009
10% off (Wed-Thu) and 5% off (Fri-Sun)
Discount Applicable from 16 Sept 2009 - 30 Sept 2009

Box Office
Kuala Lumpur Performing Arts Centre (Telesales and Walk-in Only)
Sentul Park, Jalan Strachan, Off Jalan Ipoh
51100 Kuala Lumpur
Tel: 03 4047 9000

Axcess Hotline
Tel: 03 7711 5000

Axcess Office (Walk-in Only)
1st Floor, Block A, Lot 116, Jalan Semangat
46200 Petaling Jaya, Selangor DE
Tel: 03 7711 5050

Axcess @ 1-Utama Shopping Complex (Walk-in Only)
Lot B16, Basement Floor (B1), New Wing
47800 Petaling Jaya, Selangor DE

Pentas 1, Kuala Lumpur Performing Arts Centre, Sentul Park, Jalan Strachan,
Off Jalan Ipoh, KL

Dama Orchestra, M-2-10 Plaza Damas, 60 Jalan Sri Hartamas 1,
Sri Hartamas, 50480 KL

Tel: 03-6201 9108 / 9107 Fax: 03-6201 9109

Tuesday, August 25, 2009

Most Successful Quant Hedge Funds Guy ... Ever

Degree from MIT; taught at Harvard. Worked as code breaker for Department of Defense during Vietnam. Founded Renaissance Technologies hedge fund firm 1982. Flagship Medallion fund averaging 34% annual returns since 1988. Most expensive fees in the business: 44% of profits, 5% of assets. Hires Ph.D.s instead of M.B.A.s; employees use computer modeling to find market inefficiencies. Launching fund for institutional investors that could handle $100 billion. Chairs Math for America; group donated $25 million last year to train 180 New York City math teachers.

James Simons, the founder of Renaissance Technologies, a hedge fund, once said, “Luck plays a meaningful role in everyone’s lives.” Simons, a 71-year-old former university professor and a celebrated mathematician, has been blessed with the stuff. His flagship fund, Medallion, has had average annual gains of more than 35% for 20 years. Last year he was named the best-paid hedge-fund manager in America by Alpha, a hedge-fund magazine, reportedly earning $2.5 billion. Medallion gained 80% last year, and this year is up a further 12%. What makes this feat even more incredible is that Simons, one of the members of Alpha ’s inaugural Hedge Fund Hall of Fame (June 2008), charges a fat 5 percent management fee and 44 percent performance fee. To put it another way, Medallion — which has about $7 billion in assets — was up almost 160 percent before fees. Renaissance, which had $25 billion in total assets at the end of 2008, began this year with about $20 billion, presumably because of redemptions.

But Medallion is 98% employee owned and has not accepted new money for 15 years.

But, when rumors spread in 2005 that he was starting a new $100 billion hedge fund, people outside of his field also began to take notice of him. So to cater to outside investors, Renaissance has since 2005 marketed another “mega fund” known as the Renaissance Institutional Equities Fund (RIEF). The problem is that this has not proved anything like as successful as Medallion. Before its launch a small army of Renaissance PhDs—there are more than 70 on the payroll—back-tested RIEF’s performance with a simulated portfolio of $100 billion. From 1992 to 2005, its theoretical return was more than double that of the S&P 500, with less than two-thirds of the volatility. Investors queued up like Trekkies waiting for tickets to the new film.

In the first two years RIEF raised more than $1 billion a month. With new money coming in faster than it could be invested, monthly contributions were capped at $1.5 billion. By August 2007 the fund was managing almost $28 billion. But in 2008 RIEF lost 16% and investors withdrew $12 billion from Renaissance, which was the largest prime-brokerage client of both Bear Stearns and Lehman Brothers, two investment banks that failed. The downward spiral has continued this year, with RIEF losing 17% so far. It now has less than $10 billion of assets under management.

Jim Simons, businessman and founder of Math for America Credit: AP Photo/Jason DeCrow

Simons explains the lopsided returns by saying that the two funds approach investing in different ways. Medallion attempts to identify “predictive signals” in the market. Its high-powered computers are programmed to profit from split-second price distortions. RIEF moves much more slowly. Most positions are held for a year. Like Medallion, it uses computers to buy and sell stocks. The fund is designed to provide investors with smooth returns, the success of which is measured against the S&P 500.

It has, in fact, beaten the S&P 500 by almost 4% a year since inception, but it has also trailed behind an index of its peers. In general, computer-driven funds are becoming less popular with investors. But Simons is RIEF’s biggest investor, which gives him every reason to want to improve its performance. This could be the biggest lesson of the whole episode. Though investors may think they are seduced by the wizardry of Renaissance’s computer-driven models, what they are really betting on is the magic touch of the man himself.

Before becoming one of the top money managers in the world, Simons was a decorated mathematician. His work was primarily in geometry, peripherally related to the Poincare conjecture. Simons’ work on differential geometry, which he did in collaboration with S. S. Chern, has proved useful to string theorists.

Simons is also a generous philanthropist. He has donated significantly to math education, universities, and plans to give over $130 million in the next few years to the study of the genetic basis of autism. He also recently gave $13 million to keep the Relativistic Heavy Ion Collider at Brookhaven National Laboratory running when the Department of Energy announced a funding shortfall this past year.

In a recent interview: How do you select people for your company? We look for people who have demonstrated the ability to do first-class research. We are not a teaching organization. We are a research organization. We hire people to make mathematical models of the markets in which we invest. We look for people who have had success, typically academically, although some people come out of an industrial laboratory like IBM or Bell Labs. Most come out of academia. They’ve had three to five years, written a few papers, and already have some kind of reputation. First and foremost, we look for people capable of doing good science, on the research side, or they are excellent computer scientists in architecting good programs. We have very high standards and it works. Our business is wonderful as a result.

Simons in 2006 was around the #280 mark as the richest America according to Forbes with a net worth estimated at $2.8bn. In 2009, Forbes had him zooming up to #55 with a net worth of $8bn.
... btw ... why are the over 100 books on Warren Buffett and not even one on James Simons???!!

p/s photos: Deborah Priya Henry

Why Asians Do Not Win Miss Universe Titles More Often

Miss Indonesia Zivanna Letisha Siregar poses on the runway in the evening gown segment of the 2009 Miss Universe Preliminary Competition in the Bahamas. (Photo: Tim Aylen, AP). (Miss Indonesia Zivanna Letisha Siregar poses on the runway in the evening gown segment of the 2009 Miss Universe Preliminary Competition in the Bahamas)


Asians had a strong showing in the pageant in 2000, when India's Lara Dutta won. In 2007, Japan's Riyo Mori took the crown, while Korea's Honey Lee came in as third runner-up, and India's Puja Gupta made it to the top 10. The tide began to turn last year in Vietnam, when South Americans dominated the top spots. Still, two Asian faces were in the top 15 - Japan's Hiroko Mima, and Vietnam's Nguyen Thuy Lam.

Despite a strong showing in online voting, Indonesian Miss Universe candidate Zivanna Letisha Siregar didn't figure in the beauty contest's top 15 in the pageant held in Nassau, the Bahamas.


In fact, no Asian faces graced the pageant's top 15 on Monday, though the Miss Congeniality title went to Miss China, Wang Jingyao, 19, while Miss Thailand, Chutima Durongdej, 23, got the Miss Photogenic title.

Miss Venezuela, Stefania Fernandez, 18, was crowned the winner in the 58th annual pageant, which is co-owned by American billionaire Donald Trump. But Venezuela's win has drawn strong reactions among some pageant-watchers. 'Another plastic Venezuelan? Do we really need another one of those women as Miss Universe?'

However, pundits said Miss Venezuela just has the X-factor. Venezuela has won more Miss Universe and Miss World competitions than any other country, noted the Associated Press (AP). Some girls begin training to be contestants from as young as five. Its pageant industry has drawn criticism for pressuring contestants to have cosmetic surgery. Miss Fernandez was crowned by fellow Venezuelan Dayana Mendoza, who was last year's champion. It is the sixth time a Venezuelan has taken the Miss Universe title. 'She evokes the glamour of 1940s screen goddess Rita Hayworth,' enthused Mr Josepeh Vitug, a writer with GlobalBeauties. com, a 10-year-old Internet portal on pageants.

The other top five finalists include runner-up Miss Dominican Republic, Ada Aimee de la Cruz, followed by Miss Kosovo, Droga Ganusha; Miss Australia, Rachael Finch; and Miss Puerto Rico, Mayra Matos Perez.

Miss Zivanna, 20, failed to advance to the swimsuit round, said the Jakarta Globe, even though she was No. 1 in the pageant's Internet poll. The poll saw tens of thousands of observers casting votes for the 84 contestants via the Internet. Thailand's Miss Durongdej came in at No. 5 on the poll, while Miss Vietnam, Hoang Yen Vo, took sixth place. Miss Philippines, Bianca Manalo, was placed at No. 11. Miss Singapore, 24-year-old Rachel Kum, came in at No. 55 in the poll, but did not advance beyond the swimsuit round.- New Paper


a) Its a beauty pageant, get over yourselves, people! Its a shallow way to determine beauty, we all know it, why get flustered???

b) Its subjective, a large part depends on who is on the judging panel. It helps a lot if the event was hosted in your country.

c) You need to be trained, in particular when answering questions (even if you can do it in your own mother's tongue) - your personality and sincerity should shine through, and that can be honed and trained.

d) Asians are at a disadvantage because most of the judges grew up with the Western beauty framework - you have your Rita Hayworth, Marilyn Monroe, Audrey Hepburn, Liz Taylor, Grace Kelly and the newbies: Ashley Judd, Jennifer Lopez, Charlize Theron, Penelope Cruz, Jessica Alba, Beyonce, Shakira, Megan Fox, Scarlet Johanssen, Angelina Jolie, Thandii Newton, Elle PacPherson, Liv Tyler, Halle Berry ... my argument being, these names roll off our tongues... if we were to ask the judges who they thing are the famous pretty women... they would be very hard pressed to name beyond Gong Li, Zhang Zhiyi, Aishwarya Rai and Maggie Cheung. The entire mindset is slanted already from the start.

Monday, August 24, 2009

Velly Important ... Best Food Places Are Relocating!!! Meng Kee & Max Kitchen

Where in the world is the world's best charsiu (barbecue pork)??? Of course its Meng Kee at Tengkat Tong Shin (parallel to Jalan Alor). You would think that HK which probably has the best siulap in the world, would also have the best charsiu... WRONG... HK is the best place for all your roast goose, roast duck, paikuat, yaukai, etc.. but they cannot get the charsiu right. I have brought my friends from overseas to eat charsiu at Meng Kee, and no matter where they are from, they have never tasted such perfection - perfection has to mean that its moist meat, the outer layer is lightly burned, always with at least 1/3 fat, the burnt edges are not burnt really but rather the exquisite carmelisation of sugar/ caramel/ honey (or whatever their secret ingredient is), I suspect from what I see, they do a two-three time barbecue on the outer layer, baste-barbecue-baste again-barbecue-but it has to be swift and the fire controlled so that the inside meat does not get dry.
Get a hold of this picture by Epicurious Girl, go to her blog for more info and photos:

The fact that it is also probably the most expensive charsiu around is only to be expected.

Anyway, Meng Kee will be at their current place till end of this week only. They will be off for two weeks before reopening at a shop lot on Jalan Alor, next to Hotel Nova, or directly opposite Wong Ah Wah famous barbecue chicken wings. More details, please call 017-6388648 or 016-9093721.

Glistening, caramelized pork ... (photo from Motormouth From Ipoh blog, access via: )

Is something happening to Tengkat Tongshin, why then are so many eateries moving out of that road ... anyway, another of my favourite Max Kitchen has moved as well. Maybe its the Transformers' effect as it now has a highfalutin name Max@iHaus at Jalan Jati off Jalan Imbi (off Jalan Inai as well, lol). Its a great location, its a refurbished bungalow. The bungalow is actually a showroom / showhaus for iHaus , a German interior / kitchen/ furniture products. The setting is marvelous with lots of parking. Food is still excellent though we don't get to see Max cooking now as the kitchen is hidden away. The fun part is to walk around testing the furniture and marveling at the kitchen design and other products.

Its very difficult to find but thankfully Max was smart enough to put up flags/directions once you turn into Jalan Inai / Jalan Jati.

Max, everything was great except you need a much much better wine list, its too second rate and why the concentration on Margaret River wines? I like the Australian emphasis but its slanted, I am not for paying very high prices but there are certainly better choices for wines in the RM120-200 range: try Rymill, Turkey Flat, Kennedy & Wilson, Michael Hall, even De Bortoli, Knappstein.

p/s: for a much better look at Max@iHaus and the food, please go to: Precious Pea's blog
Max.@ iHaus: Western Dining, Wines and Events is located at:
Lot No. 32 Jalan Jati
Off Jalan Bukit Bintang
55100 Kuala Lumpur
Tel. No: 603 - 2142.9720
Opens daily from 11.00 a.m. till 11.00 p.m.

When My Jewish Friend Ended Up In Pyongyang

Travel Channel eat your heart out... how about this for a scoop, a Jewish New York fund manager visiting Pyongyang, North Korea. A place I will never ever get to visit, or even want to visit. I am not even going to speculate why, maybe my friend has a secret "internet bride" he was meeting up (but did not tell me)???? ; ) Anyways, it was a very interesting email I got from him. Yea, put this up without his permission, anyway, if he starts bitching about this, then I will have to take it down ... ROFL... till then ... enjoy:

Wednesday I returned from five days in
Pyongyang, capital of the DPRK. Despite feeling constant unease while there- it's a military state, foreigners may not bring in cell phones, internet is forbidden, and even the friendliest youngsters believe the United States to be their sworn enemy- it was the most incredible trip I’ve taken.

I visited in a group of 19 Americans, mostly in their early twenties but some older, including a 78-yr-old woman who lived in Pyongyang until she was 15. Visa restrictions are eased during Arirang, the Mass Games Festival, a synchronized dance spectacle with more than 100,000 performers portraying communist/nationalistic themes. (An impressive event with crazy economics: 150,000 total performers/staff to welcome 3,000 attendees, less than a fifth of whom were foreigners paying $150/ticket. So maybe the night brought in revenues of $90k, or 60 cents per worker involved? Ignoring electricity, costumes/props, rental etc.)

DPRK is a perfectly-preserved, living, breathing museum of the Cold War. During five days in the capital city of a nation of 23 million, I once observed someone on a cellphone and I once saw a construction crane, at what appeared to be an abandoned site. Roads in PY were almost empty for four days, until it rained the morning we left and a little traffic built up. Nonetheless, I saw two billboards advertising the national automobile, the only ads I saw while in the country.

Besides those, all signs and billboards are government propaganda, often depicting Kim Il Sung, the founder of the nation who died in 1994, standing amongst farmers and a bounteous harvest or playing with adoring children. A misconception I had going in was the depth of the personality cult around Kim Jong Il. There is a significant one, but it pales compared to his father. Every adult in the country wears Kim Il Sung’s face on a pin. Kim Jong Il also appears in propaganda posters, but never alone, only with his father. (However, readers of Korean script advised me many pure text signs, without images, mentioned Kim Jong Il.)

Things you notice around PY:

-Wide empty streets

-Lack of color in people’s attire and buildings, except for women wearing bright traditional dress

-How clean the streets and buildings are

-How old every building is (1960s/70s)

-Trees and flowers everywhere, well-pruned hedges, flowers on most terraces

-Near total lack of retail

-Long or absurdly long, but orderly lines in front of tram stops

-Trams stuffed to the brim with passengers

-Paintings of Kim Il Sung

- “150 days” written everywhere (a campaign encouraging extra hard work for five months this year, in preparation for 2012, the 100th anniversary of KIS’s birth)

-Few bicycles, everyone walks

-Little smoking, except by our guides (can the people afford cigarettes?)

We saw small commissary shops in many apt buildings but they seemed empty. (It was tough to see: with no traffic, you’re never stopped long.) We saw many blue-and-white square tents on the sidewalks with one or two shopkeepers. We were advised they sell drinks and ice cream. Winter in PY is like NY: no way those tents last year-round. Maybe, they're only up during Arirang, when there are foreigners in the country; maybe, everything we saw was staged…. Impossible to know, as we had no freedom of movement. I only know the streets I saw were clean. No idea about the rest. We saw two subway stations, as we rode one stop and had to get off. Both were ok. No idea about the rest. (Although it was odd that turnstiles appeared to accept a sort of metrocard yet every single person I saw paid with a paper ticket.)

Bill Clinton and Al Gore greet freed US journalists Laura Ling and Euna Lee

I did not get satisfactory answers about how goods get distributed, groceries and clothing, or especially apartments. For apts, there’s a district government group, but it was unclear after that. Who is eligible, how many to a house, etc.

We visited the De-Militarized Zone, a few hours south of PY on the main highway. The highway was beautifully kept, but we started to see the cracks of hunger. There were dirty, nearly naked children and others lying around by the side of the road. We would come across a few more frequently than once a mile. Once we were in Kaesong, the nearest city, there were tons of children, nearly naked, playing out in the dusty roads or the stream that was almost dry. Of course we weren't allowed to take pictures. Some lying around looked hungry and forlorn, but others appeared ok.

Beside the highway we saw beautifully-kept farmland, all rice or corn. I was impressed with how orderly it was, but two girls with farming experience in our group thought the corn looked unhealthy, shorter than it should have been, than what’s in NE China.

The DMZ was fascinating. Tons of costly infrastructure focused on observing a border; but, a lot less costly than war. When people say North Koreans lack freedom of movement, that isn’t just in-and-out of the country: to visit a different district within PY, you generally need approval from both your district government and your place of work. There are 19 districts in PY. There is no internet in DPRK. We were told they have a national intranet with instant messaging capability. I have no idea how many people have access to it. It would be impossible for anyone outside of the government to organize people.

We never knew what was arranged just for us, versus what was a glimpse of normal daily life. At the mausoleum to Kim Il Sung, a building the size of the Metropolitan Museum of Art, we saw thousands of soldiers, office workers, peasants, girls in traditional clothing, and children traveling on moving walkway through this grand building without wall adornment, finally to enter the chamber of Kim Il Sung’s tomb and bow three times before a wax statue of his body. Our guides told us everyone in the country visits at least once a year. We had priority over all locals. I walked past so many. So many forlorn faces staring. Were they depressed, shocked to see foreigners, or envious and bitter? I looked at people constantly while in the country, trying to tell if they were happy.

I was wearing my replica Kim Jong Il uniform that I had tailored for Halloween two years ago. Wore it three days. At Arirang, locals wanted pictures with me. The richest attend, with their simple digital cameras.

The more they showed us how great things were, the more suspicious it made me. At the “PY Children’s Palace,” an alleged voluntary after-school program, gifted children danced and played music. All I could think of was the contrast with the kids beside the road in Kaesong.

The key aspects of North Koreans’ personal belief systems are adoration of Kim Il Sung and his son Kim Jong Il, and national pride and the desire to reunify with South Korea (and get the American imperialists off the peninsula). We visited a museum where they collected destroyed American fighter planes and other war memorabilia, and we visited the USS Pueblo, captured in 1968. Misinformation stunned us; some notables:

-The US initiated the Korean War, on a Sunday because as a “day of Sabbath in the Christian US, army strategists knew no one would expect them to start a war then”

-The US initiated the Korean War to bolster its depressed economy by selling arms to the South Koreans

-South Koreans have wanted the US out and the reunification to begin since the end of WWII

The rhetoric about wanting to reunify with the south is confusing: North Koreans mention the shared language and thousands of years of history, yet all teachings and discussions focus on the last sixty years, the time without shared history.

My suggestions for Obama and others:

Kim Jong Il is not crazy. North Korea’s economy is in trouble both because of bad decisions, like a planned economy, and bad luck, famine and floods. All while people were being told things are good. Underpinning the whole economy for decades was the Soviet support. So North Korea never learned to allocate capital properly. It was just handed everything. Things grew worse in the early 1980s, just as South Korea really started to take off. Controlling information and making things sound good became more urgent.

Time passed, and the gap between the reality and the stories continued to widen. The image of KJI and his father mustn’t shatter. KJI has a deep Confucian commitment to be the strong hand leading his people just as his father was. The West must approach him in a manner that doesn’t humiliate him. Not only is he proud, but his people have their pride deeply intertwined with him. Any changes, introduction of a market economy, must come from him. If there’s a power grab when he dies, that could lead to the government’s collapse; otherwise, it has a lot of staying power: it is impossible to organize there.

It’s frustrating to play to an egotist, but it’s the only route to constructive engagement. He (and his father) must look good. We should want to help such poor people, and we want to finally stabilize the region. Because from his point of view, when you got nothing, you got nothing to lose!

Ok if you’ve read this far thank you!! Time to rest. Unless someone wants me to go on pages more…. I have hundreds of pictures (as does everyone else from the trip, most of whom are much better photographers).

Cheers, comrades!

p/s photos: North Korean beauties (hey!!! don't blame the uploader, blame the sample source).