Snippets Of Travel To Macau/HK

First time ever taking Air asia as its the only airline flying to Macau. Thought I would take that route as I have not been there since the big casinos were built. Will then take the ferry to HK. First thing first, the LCCT was efficient, sort of like a cleaner (for now) Puduraya ... but somebody should really do something about the flies.

Caught up on some business reads, came across some interesting factoids:

- Did you know that for every 100 hardcover / softcover book that Amazon sells, they sold 180 e-books of the same version. That is an amazing adoption rate (e-reader, iPad, Kindle, etc.) despite the fact that many still prefer to hold a book in their hands, flip the pages, dogear them and stack on their shelves to project the "learned reader image" ... sigh ...

- Despite the casinos, Macau is still a pretty dead town.

- When will the shoe drop??? ... According to media statistics in CHINA, they found that there are 64.5m urban electricity meters registering ZERO consumption. That is a masterful way of determining the number of finished property units without occupancy. Sixty four million homes in urban centers that are unoccupied!!! Everybody is holding on for capital gains or flipping them because you cannot seriously entertain even seeing 20% of them being rented out over the next 2 years. Something has to give soon. Property bubbles are harder to prick ... you probably need a couple of major property developers being over extended or running into trouble for a start.

The general rule of thumb is that vacancy rates in major cities in China is as high as 50%. The lack of a Shiller price index or reliable occupancy rates has led independent researchers to think of new ways to keep track of these statistics. The electricity meter thing is smart indeed.

- Fortune magazine has a nice article highlighting on current possible bubbles in the financial markets. I have rated them on the frothiness (10 being most frothy):

a) China's economy 7/10

b) China's urban property 9.9/10

c) US Treasury bonds 9/10

d) Shale stocks (rock formations below ground thought to have massive gas deposits) 6/10

e) Gold 7/10

f) Cotton 7/10

- In the meantime, do check out khanacademy.org or view some of his selfless lectures (freebie) on various subjects for all to learn. Go to you tube and search for khan academy, learn in brilliantly simple exacting ways about calculus, physics, algebra etc... he has over 1,600 tutorials reaching hundreds of thousands of students. Its not going to replace the classroom or university but an exciting way to leverage on open-university-learning to supplement the teachings. Save tons on tuition class people. Bill gates and a number of other philantropists are going to be backing him in a big way.

Roubini & Obama On Bank Nationalisation

Nouriel Roubini's View:

So why is the US government temporizing and avoiding doing the right thing, i.e. take over the insolvent banks? There are two reasons. First, there is still some small hope and a small probability that the economy will recover sooner than expected, that expected credit losses will be smaller than expected and that the current approach of recapping the banks and somehow working out the bad assets will work in due time. Second, taking over the banks – call is nationalization or, in a more politically correct way, “receivership” – is a radical action that requires most banks be clearly beyond pale and insolvent to be undertaken. Today Citi and Bank of America clearly look like near-insolvent and ready to be taken over but JPMorgan and Wells Fargo do not yet. But with the sharp rise in delinquencies and charge-off rates that we are experiencing now on mortgages, commercial real estate and consumer credit in a matter of six to twelve months even JPMorgan and Wells will likely look as near-insolvent …

…So while Plan A is now underway today’s very negative market response to this Treasury plan suggest that it will not fly. Markets were expecting a more clear plan but also a plan that would bail out shareholders and creditors of insolvent banks. Unfortunately that is not politically and fiscally feasible. It is thus time to start to think and plan ahead for for Plan N (“nationalization” of insolvent banks).

-----------------------------------------

Obama's View:

TERRY MORAN: There are a lot of economists who look at these banks and they say all that garbage that's in them renders them essentially insolvent. Why not just nationalize the banks?

PRESIDENT OBAMA:Well, you know, it's interesting. There are two countries who have gone through some big financial crises over the last decade or two. One was Japan, which never really acknowledged the scale and magnitude of the problems in their banking system and that resulted in what's called "The Lost Decade." They kept on trying to paper over the problems. The markets sort of stayed up because the Japanese government kept on pumping money in. But, eventually, nothing happened and they didn't see any growth whatsoever.

Sweden, on the other hand, had a problem like this. They took over the banks, nationalized them, got rid of the bad assets, resold the banks and, a couple years later, they were going again. So you'd think looking at it, Sweden looks like a good model. Here's the problem; Sweden had like five banks. [LAUGHS] We've got thousands of banks. You know, the scale of the U.S. economy and the capital markets are so vast and the problems in terms of managing and overseeing anything of that scale, I think, would -- our assessment was that it wouldn't make sense. And we also have different traditions in this country.

Obviously, Sweden has a different set of cultures in terms of how the government relates to markets and America's different. And we want to retain a strong sense of that private capital fulfilling the core -- core investment needs of this country.

And so, what we've tried to do is to apply some of the tough love that's going to be necessary, but do it in a way that's also recognizing we've got big private capital markets and ultimately that's going to be the key to getting credit flowing again.

p/s photo: Tavia Yeung Yi