My quick thoughts on QE3

These are my quick thoughts on QE3 before my views get corrupted by the financial media:

- Instead of buying treasuries, this time the Fed will focus on mortgage-backed securities ("MBS"), which are essentially treasuries backed by real estate given the government takeover of Fannie Mae and Freddie Mac, with the stated intent of stimulating the still rather tepid real estate market
- This will drive mortgage rates, which are at historic lows already, down further, with dubious benefits to real estate prices. The bottlenecks here, which politicians will not admit, are 1) banks are only willing to lend at those rates to buyers with the best credit, 2) homeowners are not willing to sell and take losses unless they absolutely have to due to life events, and the real estate market will not recover until it finds the bottom
- Thus, the main benefactors of QE3 will be the current holders of MBS, primarily financial institutions, institutional investors and foreign governments
- Corporations have gone through two rounds of QE with the more creditworthy ones sitting on piles of cash and the less creditworthy ones getting by due to low interest rates. This is not going to change with QE3
- There will be a short-term bump in the stock market, which has been fluctuating based on human sentiments and computer algorithms' expectations of Fed and ECB actions. Given that the suspense is over for now, there should be a looser correlation between individual stocks and the general market so in the medium term, companies' revenue growth and earnings will matter more
- Commodities will be the clear winner, and more so if 1) the ECB ends up selling US dollars to buy Italian and Spanish sovereign bonds, 2) bad harvests lead to food shortages, and 3) things get out of control in the Middle East

Should I get a full-time MBA in the US?

Since September and hence the application season are round the corner, I thought it would be a good time to offer my two cents on whether young professionals should get a full-time MBA degree. My cousin (an Asian male in his late twenties working in a professional service firm in the US) happened to ask me this question a couple months ago and this was my response, in bullet points ...

- MBA education must only be weighed on a return on investment basis, comparing the cost and time of getting the degree with your projected future earnings. If you want to learn something theoretical, go read a book. If you want to learn how something actually works, talk to multiple people in that field. If you are bored and unhappy with your job, get a better one if you can. Otherwise just suck it up

- I don't know about the MBA job market enough these days but my gut tells me that only positions that are recruiting in top 10 or maybe top 20 MBA programs will offer the right returns on investment for someone that has a well-paid job in a professional service firm to spend $100,000 and forgo 2 years of income

- Don't even think about your employer paying for your MBA unless you work for a major management consulting firm, a big corporation that has specific arrangements with a top business school (Ford-HBS comes to my mind) or a non-US government entity (Singapore government and Japan central bank/ministry of finance come to my mind)

- GMAT scores are generally used as gatekeepers for top MBA programs. Once you pass a certain score, it doesn't matter. That said, the GMAT threshold for Asian males is at least 730 these days for top MBA programs

- For Asian males, there are generally two ways of getting into a top MBA program: 1) Have an impeccable resume, i.e. Ivy undergraduate degree, 3.8+ GPA, 2 years in an investment bank + 2 years in a major private equity/hedge fund or 2 years in a management consulting firm + 2 years doing something interesting or 2) From now on, do everything right to the admissions people but silly otherwise (e.g. working 50 hours a week and being in the top tier in a professional service firm + be the chairperson of your local Habitat for Humanity chapter + take a leave of absence for 3 months volunteering in Tibet) and beg (I mean it literally) them to let you in

- I assume both options are not applicable or appealing to you so I will skip the pros and cons but let me tell you who are the people that would most likely thrive in top MBA programs: women and minorities (and needless to say Asian males don't count), people that are and can sound passionate but don't know enough about investment banking or management consulting, people that have very specific dream jobs that top business schools can bridge to (the best example I have heard of is product manager for Xbox, another example is MBA marketing programs for major consumer packaged goods corporations like Kraft and Pepsi which bridge to top marketing jobs in the country), smart and capable professionals that are making very little money now so the return on investment is high (e.g. Navy SEALs, failed entrepreneurs, anyone from the third world that has an impressive resume and can speak good enough English to get a job in the US)

再一次討論香港樓市

今晚和友人吃飯，談起投資物業的問題。記得今年類似的對話已經有十次八次，結果大則吵得面紅耳赤，小則其中一方借故轉移話題，看來是我的想法比較獨特，卻又不善辭令的原因。

友：我現在和家人住，但手上有一點閒錢，現在銀行利息這麼低，把錢放在銀行不如拿錢去供樓吧。

我：你傻了嗎？現在地產交投淡靜，大陸人不再來香港買樓，發展商都看不好後市，最近政府也不再賣地，曾俊華更三番四次警告買樓要小心，現在買樓的不是炒居屋就是是那些只有幾十萬現金在手但害怕自己以後上不了車的 stupid money , smart money 已經離場了，香港地產泡沫爆破是遲早問題。

友：我問過業界的朋友，他說樓市的確有些風險，但最多只有百分之二十的調整。

我：就算是真的只有百分之二十的調整，爲什麽不等它跌了百分之二十才入市？

友：因為現在股市已經跌了很多，看來還會繼續下跌，閒錢除了買樓之外沒有什麽出路。

我：其實這個世界除了股票與地產外還有很多投資工具，如果你覺得股市會繼續下跌的話，可以選擇拋空股票。

友：我不像你讀過那麼多書，在華爾街做過事，不懂這些東西。

我：假如你不懂的話，你有第三個選擇，就是把錢放在銀行收息。投資賺錢不是必然的，如果你不想去學習，也不想付錢給人幫你投資，爲什麽要買一些明知會跌的東西？

友：你從外國回來，可能不太明白香港人的傳統智慧，覺得有一舊磚頭揸手的重要。

我：也要看你付多少錢去買這舊磚頭。

友：現在利息這麼低，供樓的錢大部份用來還本，只有小部份拿來付利息，買樓比租樓化算。

我：利息已經慢慢回升了，你也許沒有考慮管理費，裝修費以及那筆首期用來投資其他東西的機會成本。如果樓價不變的話，在香港租樓差不多一定比買樓化算。

友：但我聽過很多人買樓賺錢的例子。

我：你幾時聽過人家會大聲說自己買樓蝕錢的。沒錯，假如你早年在香港買樓差不多一定賺錢，但那些在九七年樓市見頂時買樓的，到現在也可能未歸本。

這時，友人識趣地轉移話題，分析梁振英的居屋派糖政策。看來樓市泡沫一天未爆破，類似的爭論一定會再發生。

香港台北機票續篇

剛從台北回香港，意猶未盡，到華航網站看看下個禮拜香港到台北的機票，只要是七日內來回的連稅和燃油附加費都只是港幣一千七百多，而且這個價錢差不多所有時間的航班也管用。沒有其他的數據也沒有和業內人士討論過，斗膽提出以下結論：

1）我剛去台北坐的是國泰，機票港幣兩千多，是上個月國泰大減價時買的，來回經濟客艙都有八成滿。下個禮拜是八月最後一個禮拜，按理應該是航空交通非常繁忙的禮拜，現在卻要大減價促銷, 看來華航大部份班次都尚有大量空位。

2）通常在出發日期前幾天買票的都是時間沒有什麽彈性的商務旅客，所以航空公司會針對客源而提高價錢。看看在同一時間的台北松山到上海虹橋的航班便知道 （價錢以台幣計算），所有禮拜一，五，日的航班由上海回台北的航班都滿了：

看來商務乘客不是坐國泰來往港台就是坐大陸台灣航空公司直接來往兩岸。

3）假如逗留在台北逗留七日以上，價錢比逗留七日一下貴了大概四百港幣，原因是在台北逗留短一點的應該是來自香港的旅客，逗留長一點的應該是在台北有家有室，會傾向坐華航或長榮的。

華航沒有國泰國際化，信譽和安全紀錄也比較差，價錢比國泰便宜是正常的，但情形比我想像的還要差。坊間有華航四年魔咒的說法，但上次嚴重空難已經是十年前，不信邪的我短期內都會在出發前一兩個禮拜才在華航網站購買往台北的機票了。

航空業的三個謊言

因為颱風關係班機延誤兩個小時，百無聊賴之下就和大家分享一下三個航空業的謊言吧！

1）航班起飛前兩小時要到機場，半小時到閘口

我一年起碼坐飛機最少二十次，航班從來沒有試過準時起飛，這個其實是航空公司想早點確認乘客數目以便多賣些機票及預留時間糾正錯誤的伎倆。香港機場應該是全世界最有效率的機場之一，如果不是扶老攜幼或有特殊物品寄艙，一個小時前到機場，十五分鐘前到閘口就可以了。

2）九一一後的種種安全措施令劫機事件減少

看過不少保安專家的分析，九一一後主要由美國引進的安全措施例如不准帶液體上機，增加人手搜身次數和脫鞋檢查等的目的主要是令旅客感覺安全一點，這些措施難不倒有計劃有經驗有運氣的劫機者，而一貫的措施對付笨賊綽綽有餘。這個現象英語叫 security theater, 中文可以譯作安檢大龍鳳。九一一後只有兩個改變是真的改善旅客安全的：1）駕駛艙門鞏固了，機司甚麼時候也一定把駕駛艙門鎖上，2）乘客假如懷疑有人劫機，會立即出手制止，就算犧牲自己生命也在所不惜。幾年前有劫機者試圖在飛往美國底特律的航班引爆炸彈，就是被幾個奮不顧身的乘客及時阻止的。

3）在飛機起飛降落時開手提電話會影響儀器運作

手提電話與飛機無線電設備的頻率完全不同，兩者是不會互相干擾的。航空公司禁止使用手提電話的目的，是避免干擾機場附近手提電話通訊塔的運作。要知每一部手提電話其實是一個小小的通訊塔，假如讓幾千個通訊塔同時高速地在香港上空飄移，會對地面手提電話網絡做成影響。

其實航空公司說謊是可以理解的，這些規矩背後的原因很難說得明白，對乘客也沒有直接的影響，假如說真話的話輕則做成乘客不安，重則影響機場運作。本來還想多揭穿一兩個謊言，不過飛機還有十五分鐘要起飛，所以到此為止。

吾國與吾民

週末逛書展經過辰衝書局的攤位，令我想起一位已故的長輩，辰衝書局老闆李信章先生。我家在香港親戚不多，但在小時候爺爺每年都會帶我到半山李家拜年，只記得大宅裏面很多人，他們說的客家話我聽不懂，但只要說幾聲恭喜發財就收到幾百塊的利是，所以每次拜年都非常雀躍。準備到美國升大學那年的暑假，爺爺有一天要我陪他到中環，說有禮物給我，結果到了德輔道中的 Hong Kong Book Centre, 李公公已經一早恭候，說了幾句恭賀說話後便從書架拿了一本林語堂的英文版吾國與吾民給我，叫我帶到美國有空看看。

謝了李公公，把書放進行李帶到美國，但當時年少氣盛，美國聲色犬馬，有空都不會看課外書，有一次大家搬小家，就把書連同一些雜物一併扔掉了。去國十年，爺爺和李公公先後作了古，有一次和叔叔閒談，才知道爺爺幾十年前生意失敗，如果不是當年李公公接濟，可能已經抹了脖子，可以說是沒有李公公就沒有我們一家人。李公公多年來接濟過的潦倒老鄉和文人肯定不止爺爺一個，而且所有四十歲以上的香港番書仔女都曾經是辰衝顧客，小時候只是用利是多少去衡量人家，難聽一點真的是狗眼看人低。

在書展攤位找不到吾國與吾民，打電話到總店，他們說全線已經斷了貨，最後一本也在去年賣掉，問他們是不是還是李家的，他們說是。在這個電子書和板腦流行的年代，買英文書不用再到辰衝，只要上網按幾下鍵便行，吾國與吾民可能由於在 1935 年出版的關係，在網路上已經有免費版，連那港幣百多元也可以省掉。十年樹木百年樹人，辰衝已經有差不多一百年歷史。他們在下一代接手後，順應潮流，改變了店鋪風格，加了 Kelly & Walsh 的品牌，也開設了網上書店。在這裡祝願他們無論順境逆境都能解決問題，努力經營下去。

香港的機場

三年前剛搬到香港時即遇上八號風球，公司剛巧在香港開大會，美國的大老闆也特地蒞臨。和今天一樣，天文臺下午三時放風會在五時掛八號風球，到了五時真的掛了八號風球時所有在會議室外的同事早已作鳥獸散，但是大老闆還滔滔不絕，要人事部經理打電話三催四請才肯離開公司回酒店。有幾位香港同事提議一同吃晚飯，我當時獨居公司附近，從來不煮飯，剛回香港時也想與同事多聯誼一下，便答應了。奇怪的是同行的有些住在新界，有些是從日本來港開會的，他們幹嗎不回家回酒店，還點了幾瓶花雕佐膳。酒足飯飽後，還要清理一點公事，便先告辭了。

歸家不久，便收到大老闆電郵，要在晚上九時在電話上繼續進行會議。到了九時十五分，只有大老闆，美國一位同事和我參加了，其他香港同事遍尋不獲，發電郵打電話都沒有回覆，那時我才恍然大悟，明白八號風球時赤蠟角機場雖然關了門，但港九其他機場仍然遊人如鯽，起機落機之餘可能還要加班，不過這些東西怎樣解釋給美國人也不會明白，亦沒有必要枉作小人，便告訴他們手機網絡可能在颱風下發生故障，所以同事沒有收到電郵，我們不如照常開會，之後我發個電郵摘要給正在沖上雲霄的同事便行。


三年來經歷過不少颱風，香港江山依舊在，可是機場也因為市場轉型和內地競爭關掉不少。我三年前來香港時以為只是來幾個月，轉眼已經三年，風雨飄搖下，當天赴會的不少同事包括大老闆都離開了公司，我自己又何去何從呢？

真正的李氏力場

天文臺剛掛八號風球，打算約朋友今晚唱卡拉OK。一位中學時移民到美國最近才從美國搬回來的朋友被我嚇了一跳，問我是不是瘋了，這麼危險還要外出。回想起小時候香港的颱風有點像現在美國東南部的 hurricane，每次十號風球都會死人塌樓，父母當然不會讓我們外出。但是爲什麽香港的颱風卻看來越來越弱，每次都是撞倒幾顆樹幾個招牌後匆匆而過，而且都是剛巧在假期和晚上天文臺才掛上八號風球，難道真的是坊間傳聞中的李氏力場作祟嗎？

看看菲律賓和台灣打風的情況，就知道西太平洋的颱風沒有變弱，變了的是香港的樓宇質素和防風基建。自八十年代起因種種原因香港實行高地價政策，樓價飆升，發展商賺錢的法門太多，計算過後，寧願用好一點的建材，先進一點的工程技術也不願冒打風塌樓做壞聲譽成為“冧樓王”的危險。地價飆升令政府盈餘增多，但當時港英政府無需搞福利政策和漂亮的工程項目爭取民意選票，部份盈餘拿來做一些市民看不見但能真正改善民生的事，十多年來有系統地鞏固斜坡，改善排水，近幾年已經沒有聽過什麽嚴重山泥傾瀉和水浸的事故。香港山多地少，人口集中，沒有低窪地區，也再沒有如九龍城寨這類"三不管”地帶，防風基建不難做好，最麻煩的只是三十年樓齡以上的大廈和招牌以及一些百年樹木，但比起其他亞洲地區，香港在這方面非常幸運。高地價政策為香港帶來很多問題，但也令某些人發了大達，也間接替香港築起“力場”抗風。


八號風球不用上班只是勞工處的守則，本身沒有法律效力，八號風球的工作安排純粹是勞資雙方的協定，不過很多的保險例如雇傭保險和私家車保險會在八號風球以上失效，爲了避免訴訟，一般大公司和政府機構都會讓雇員在掛八號風球時回家。其實由於香港經濟轉型，在戶外工作人數減少，乘地鐵上班人數贈加，加上上述的“力場”，八號風球的定義已經過時。與其和全港雇主和市民玩心理遊戲，天文臺不如增加風球數目或採用一套新的預警系統，讓保險公司，雇主和雇員在商討合約時多一些選擇，讓公共交通系統不用突然承受太大壓力，也讓市民多一點資訊去評估風險。

喬寶寶事件

自上星期起不斷在媒體看到關於無線南亞籍藝人喬寶寶太太被拒特區護照而導致全家要搬離香港的報導。坊間言論一面倒要求特區政府網開一面，也有不少市民認為入境處官員歧視，如果當事人是洋人和大陸人便會有不同結果云云。我對香港移民法例不熟悉，但可以大膽說全球絕大部份國家包括香港，移民局局長有絕對權力批准和否決護照申請，而在有憲法保障公民權利的國家，非本國居民或永久性居民是不一定得到公民可以得到的所有保障。假設入境處官員在討論審批的會議中真的有說帶有歧視成份的東西而被傳媒發現，理所當然會被聲討一番，但是入境處職員沒有失職，只是作出不符合專業精神行為，職員或許會被處分，但入境處不會破壞先例，因為平息社會聲討的聲音而讓不符合資格人士拿到特區護照。 反對聲音主要來自兩種人：1）惻隱之心比較強的人，2）覺得政府做甚麼都錯的人。第一類人不忍心一個來自貧窮南亞國家，辛苦在香港建立事業的家庭被拆散。他們不明白的，是社會資源有限，基本法和立法機關訂立取得護照的標準，入境處負責執行。如果此例一開，有不少人便會要求以人道原因取得特區護照導致入境處少了資源處理正務。他們也不明白，喬寶寶先生夫人都是成年人，懂得權衡輕重，在國籍未明的情況下移居香港，當時沒事不代表永遠沒事，況且他們有能力移居英國而不是回鄉下給塔利班槍斃。第二類人是對特區政府施政及近期高官貪腐瀆職極度不滿，政府做甚麼都反對一番的人。特區政府的確有不少問題，但問題根源在於政治制度及中港關係有很多不清晰的地方以及官員貪污地產化，與入境處審批非中國籍人士護照沒有關係。特區政府縱有千般錯，錯的不是入境處負責審批非中國籍人士護照的小官，大家不要想得太多了。

給香港誠品的幾個建議

相信很多人都知道台灣誠品書店會在年底登陸香港，在銅鑼灣剛落成的希慎廣場開旗艦店。我每次去台北的時候都一定會到敦化南路或 101 的誠品朝聖，頭幾次是大夥兒去，都是看看精品，吃頓飯，沒有好好地看書。當時覺得台北的書店文化和香港很不同，坐在地上梯級上看書的人很多，在收銀處買書的很少，熱門的部門如旅遊及占卜和冷門的部門如日文及古文佔地差不多，一言以概之，像圖書館多過書店。以後幾次去台北，時間沒有這麼緊，也多了一點自由活動時間，我也是愛書人，很多時候會一個人逛誠品，通常是午飯後或晚上去夜店玩了前後，每次打完書釘後，總會大包小包的離開。

知道誠品會來香港開店，有喜有悲，喜的是不用再到台北就可以到誠品打書釘，悲的是覺得誠品在香港既要成功又要維持本來風格難若登天，原因不外乎都是這三個：1）香港租金貴，
2）香港人不愛看書，3）電子書和平板電腦逐漸侵蝕紙本書市場。現時在香港鬧市開書店不是中資書店就是樓上書店，但中資書店其實都是國企，賺錢不是主要目的，而樓上書店小本經營，不用挨太貴的租，也有他們的捧場客。以誠品的知名度和台灣特色，其實也可以先在銅鑼灣割據一方，然後進佔旺角尖沙咀，但市場定位一定要正確，執行策略一定要無誤，不然就像新華書店一樣鎩羽而回。以下是我的幾個建議：

掌握潮流，不斷更新
香港人善忘善變，口味日新月異，昨天的新聞，今天已經成為舊聞，明天就被送進回收箱。 管理層無論是台灣人還是香港人一定要把握香港潮流，頻密更換書本，尤其是熱門書，政治和現代文學部門，當然也要推介一些風靡台灣但也適合港人口味的書。站穩陣腳，摸清香港人口味後，更可以用在台灣出版界上的影響力，推出一些適合港人的獨特書種，我第一個想到的建議是推出用正體字和漢語拼音，由台灣老師撰寫的普通話和中國文學讀本教材。

把打書釘的趕進咖啡室，把吵鬧的趕到別處
香港寸金尺土，每一尺空間也要充分利用，由於處於銅鑼灣購物區，一定會比較多吵鬧的遊人和小孩，要保持誠品一貫寧靜舒適的感覺，單靠顧客自律，員工隻眼開隻眼閉是不行的，一定要從店面設計和員工訓練入手，讓看書人自覺消費，其他人自律購物。不鋪地毯，鋪木地板，不設沙發和梯級，用盡所有空間，只留足夠的空間做走廊。和台灣某些大分店一樣，設咖啡室讓顧客坐在那裡付錢買飲料然後慢慢看書，設兒童園地讓小孩玩耍並推銷兒童教材和玩具，設精品店讓趁熱鬧的遊客購物消費。員工要誠懇待客，也要懂得有禮貌的以兩文三語制止一些妨礙其他顧客看書購物的行為。

設大量精品店推銷高毛利台灣概念文具精品
誠品的最大特色，是成功製造一個以書店為中心的消費圈。台北的敦南和信義店佔地數萬尺，大概只有四分一面積書店，其他是毛利較高的時裝店，精品店，展覽館和食肆。香港店最多只有萬多尺，要維持這個四分一比例很難，業主也可能不許誠品開食肆和時裝店與其他租戶競爭，所以文具精品入貨和合作夥伴挑選便非常重要。但香港的文具精品市場比台灣的成熟，有些在台灣只在台北誠品見過的歐美貨品在香港好幾處都有售，香港誠品可能要更努力開拓貨源，或者是售賣一些在台灣以外找不到的貨品，例如是故宮博物院的或者是一些台灣設計師設計的文具精品。

不做教科書生意，但做大量教材生意
香港的教科書市場龐大也有穩定客源，但毛利不高，出版商，書店和學校的關係千絲萬縷。誠品在台灣沒有做教科書生意，在香港也不需要做。但與台灣比較，香港家長經濟能力較高，更肯花錢在孩子的教育上，對傳統的公立教育制度也有更大的反抗力。傳統香港書店在這方面沒有什麽創意也不想破壞與教科書出版商的關係，很多香港家長都是在一年一度的書展，網上或海外替孩子買一些另類一點的多媒體教材。香港誠品不妨在這方面想想辦法，做做市場研究，引進一些獨特的台灣歐美教材，賺個盤滿缽滿之餘也可以造福下一代。

引進台灣禁書，吸引大陸遊客
很多大陸遊客在香港除了搜購名牌手袋手錶和奶粉日用品外，也愛買大陸買不到的禁書自用送人。可以來香港的大陸人都是審批過的，不是根正苗紅就是在大城市有戶口，有房子有資產的，他們和共產黨一樣，怕中國亂，但是想提高對國家歷史的認識，在兩岸進一步開放三通時，趁機開拓台灣商機。香港誠品可以引進台灣出版的中國近代史，中國政治和台灣問題書籍，說不定有幾本輾轉落到大陸決策者手裡，改變他們對台灣的看法。

台灣企業在香港成功的也不是沒有，鼎泰豐，HTC，華碩和一些珍珠奶茶連鎖店便是成功例子。但他們沒有像 Nike，蘋果，麥當勞和星巴克這些美國企業徹底改變了香港以至全世界的消費文化，背後的原因說三天也說不完，如果誠品在香港做到一街之隔的鼎泰豐這樣也應該謝天謝地了。香港誠品成功的犧牲品，不是中資書店，他們無論如何都有能力生存下去，也不是老牌教科書書店例如齡記和辰衝，他們的客源完全不同，最受衝擊的應該是銅鑼灣的樓上書店和全港的文具精品店，他們背後沒有什麽財團支撐，除了減價促銷再轉售其他商品沒有什麽辦法。

Why Obamacare (and any major entitlement) will bankrupt the US?

I had quite a few discussions with Facebook friends and their friends after the Supreme Court ruling on Obamacare's constitutionality came out 2 weeks ago. The challenge with these Facebook discussions is that everyone just repeats his pet arguments without addressing what others said, which I often couldn't help doing myself. As such, I will lay out my arguments here, which targets not the ethics but the fiscal feasibility not only for Obamacare but also for any major entitlement like free college education and free public transportation, and hope to drive some discussions. Unlike civil rights like same-sex marriage, healthcare is an economic good and economic analysis is essential. These arguments are politically explosive and will probably not be brought up in the US mainstream media or blogosphere but I have the luxury of not being a US citizen or permanent resident and not living in the US now.


Please skip this article if:
- You are for everything Obama proposes and everything Republicans oppose. I am wasting my time to convince you. However, King Obama will be happy to take your donations which he will spend on Romney-bashing ads during Ohio State football games that you will probably never see. High Priestess Pelosi doesn't need your money but your prayers will give her power.
- You think healthcare is a right. I am well aware that Americans are endowed with certain unalienable rights. However, after more than 200 hundred years of lawmaking and court rulings, if the Framers, Congress and Supreme Court haven't said explicitly something is a right, it isn't one no matter how much you think it is. 
- You think Obamacare actually saves money. Obamacare saves money according to CBO primarily because of cost savings from improving efficiency of the healthcare system, which are extraneous to Obamacare as the government should always improve efficiency with or without Obamacare, and the CLASS act, which will bring revenue in its first years of implementation as a new entitlement for elderly care, but was deemed actuarially unfeasible by Sibelius and pulled from Obamacare earlier this year. Without them, Obamacare only saves very little on paper and judging from Social Security and Medicare, huge cost overruns are inevitable for major entitlements.
- You think the US doesn't have a chronic deficit problem. Even Obama said it does. 


Read further if you believe that Obamacare will be costly but there should be universal healthcare for the citizens of an advanced nation. I agree with that statement except that given two unofficial, unique and difficult-to-replace entitlements, the US is the only advanced nation where universal healthcare, or any major entitlement, is a fiscal non starter. 



The first entitlement that is unique to the US is global defense. Since its entry to the WWII following the Pearl Harbor attacks, the US has participated in major global military campaigns voluntarily (Many UN campaigns and the Second Gulf War), involuntarily (WWII and the Korean War) and somewhere in between (Vietnam War and the Afghanistan War) and will likely continue doing so. As such, the US has to maintain peacetime global military presence by paying for military bases abroad and aircraft carrier groups in the oceans given the legacies of some of these wars, given it's the one of the three NATO countries with meaningful military forces (UK and France are the other two) and given it's unspoken role as the primary sponsor of UN security forces. The military presence and expenditures have decreased following the end of the cold war but increased during the First Gulf War and again after the Second Gulf War. The jury is very much still out on whether the US' world police role makes the world more peaceful overall. However, few would dispute that the US' military might has kept military conflicts regional and prevented another major world war. Moreover, few Americans would envision that the US will one day go imperialist and go on conquering mode. I would also argue that two positive externalities of US' significant military presence and expenditures are 1) free and safe passage in the oceans which facilitate global trade and 2) commercialization of technologies developed by the US military like GPS and the Internet which facilitate communication and productivity increase.

Note that the US doesn't charge other countries for providing security services and in many cases, provides foreign aid or distributes technology free of charge. Unless the world becomes much more peaceful or until the US runs into significant financial difficulties, the US will likely maintain significant global military presence. Let's hope it is the former not the latter. 


The second unique entitlement is open immigration. Very few will dispute that the US is an immigrant nation given how the country was founded. For this analysis, it is essential to divide immigrants to economic immigrants and non-economic immigrants. Until WWII, all immigrants were essentially economic immigrants who brought labor, capital and most importantly, entrepreneurship to explore opportunities in a new country with lots of land and resources. There was essentially no welfare system and although there was no direct taxation until the ratification of the 17th amendment in 1913, everyone was essentially a net taxpayer via indirect taxation. Also, there was no such concept as illegal immigration. With the introduction of major entitlements through New Deal (Social Security) and Great Society (Medicare and Medicaid), Congress saw the need of limiting immigration and passed laws accordingly. However, for humanitarian and diplomatic reasons, the US started taking non-economic immigrants, primarily overseas family members of US citizens and refugees. The number of non-economic immigrants increased over time because of population growth which increased the number of eligible candidates. Moreover, politicians realized that these non-economic immigrants tend to be net welfare recipients and voted along with their family members that were already US citizens which encouraged them to expand non-economic immigration at the expense of economic immigration which involves foreign graduates in American universities and experts in science and technology that are almost always net taxpayers. There is also a new type of economic immigration not sanctioned by the government - illegal immigration primarily from south of the border. Since they don't pay taxes, illegal immigrants are at best neutral to US public expenditures. Unless the US expands legal economic immigration or significantly cuts down non-economic immigration, the net increase of non-economic immigration will eventually bankrupt the US government given the other issues inherent with the current entitlements and expected from Obamacare. 

This is a problem unique to the US. The only other major Western countries that have open and semi-open immigration policies are Canada, Australia, UK and France. With sparse populations and abundant natural resources, Canada and Australia resemble the US a century ago and arguably many of their mining, fishing and drilling regions will never get enough settlers because of the harsh working conditions, while the UK and France limit immigration to citizens of some of its ex-colonies.

Without their explicit agreement and probably knowledge, Americans have to take on two huge entitlements whose beneficiaries are not necessarily themselves. The decisions were made on behalf of them by almost every commander-in-chief they have elected since FDR for defense and by God and the Founding Fathers for immigration, and no President and Congress they elect in future can easily overturn those decisions. On the other hand, no Founding Father, even the most hawkish Hamilton, could imagine that the country would be saturated after significant territory expansions and become the world police. Even if they had, they couldn't come up with a better system without compromising the separation of powers, democracy and sovereignty - it's unfathomable to give foreign leaders and citizens a say on who the US President should be. 

We cannot blame Americans, half of which don't have passports, for voting for their President and Congress based on domestic issues and not considering the two entitlements that they have no control over. My goal here is to make more Americans aware of the reality and vote for politicians that will address these two entitlements before taking on any new entitlements. Even if they insist in bankrupting their own country by voting for politicians that will do otherwise, the rest of the world should forever be grateful to Americans for sacrificing their own welfare to make the world a better place for everybody.

蒙查長老

昨天早上到中環看醫生，出了地鐵站後在環球大廈旁的小巷看到兩個年輕美籍摩門教長老在傳教。巷子人來人往，大部份是中環的上班族，小部份是遊客，對兩個長老都不屑一顧。我對摩門教的教義不以為然，覺得摩門經的可信性與哈利波特小說不相伯仲，不過認識不少摩門教徒，都是不煙不酒，兒女成群，宅心仁厚的謙謙君子。我以前的大老闆是摩門教徒，年輕時到過墨西哥傳教，會說一口流利西班牙語。他以往沒有接觸海外業務，幾年前跳槽過來時才要兼顧歐亞。一般美國跨國公司管理層不是對亞洲業務不聞不問，就是一年到亞洲一次，見見幾個客戶吃吃點心壽司而已，唯獨這位大老闆真的關心亞洲業務，一把年紀還常常到亞洲考察，嘗試理解國情。他起初不斷被亞洲下屬瞞騙，被其他持份者利用去爭取公司資源，後來學精了卻不幸在美國的內部權鬥中箭下馬。那兩個長老令我想起大老闆，頓時感到有點唏噓，我也早到了一點，就上前和他們打個招呼。看來在炎夏中吃了不少西北風的他們見到有人自投羅網十分高興，用半鹹半淡的廣東話向我問好。看到他們胸前的名牌，他們一個叫蒙長老，一個叫查長老，我也用英語簡單介紹自己，然後單刀直入。 


我：其實你們站在這裡傳教是浪費時間的。和美國人不同，香港人喜歡扮忙也非常功利，你不給他們一點現成的好處和希望他們是不會理你的。 


蒙：真的嗎？ 


我：嗯。有些人信天主教是爲了可以在莊嚴的教堂結婚，之後增加孩子入讀天主教名校的機會。有些人信基督教是為了有一個穩定的 support group，只要遵守團契裏的明規則與潛規則很多物質上精神上的問題都有人幫忙解決。至於求神拜佛的更加不用多說。你們摩門教可以給香港人帶來什麽好處？


查：實質上的確沒有，但我們可以給他們心靈上的滿足和快樂。


我：那不如從一些心靈受創，覺得被遺棄的天主教基督教徒入手。聽說你們沒有全職的神職人員，上至教主下至你們傳教士都是自願性的，對不對？


查：對。


我：天主教基督教的一個大問題是神職人員質素參差，有不少瀆職的案例，但由於摩門教沒有專業神職人員，所以瀆職問題基本上不存在。你們試試上一些香港社交網站，假期時重回中環與一些菲傭聊聊天，瞭解一下他們教會的問題，或許會找到一兩隻迷途羔羊，如果成功用你們的教義把他們引入正途，一傳十十傳百，會比在這裡姜太公釣魚願者上鉤比較有用。


蒙：那怎樣改善我們在香港的形象呢？


我：可以嘗試脫下制服。香港人比較多疑，穿制服的都把被當成 sales，見到你們這個樣子會想和你們討價還價。


查：其實我們撞了不少板，你說過的一些東西我們也私下討論過，但我們人微言輕，教會也不會因為亞洲的獨特情況而改變多年的傳教守則。


國有國法，家有家規，他們教會內部的情形我不瞭解也不想去瞭解，時間也差不多，便告辭了。道別時他們疑惑中帶點感激的眼神似曾相識，與兩年前解釋亞洲業務時大老闆的眼神一模一樣。

香港台北機票減價戰

本週又看見華航和長榮推出香港台北機票優惠，今年記得國泰（包括港龍）也做過類似的推廣，我六月初買一個禮拜後往台北的機票來回連稅也不用兩千塊。在臉書看到在國泰幾個當空服朋友的留言，說今年台北班機的 load 奇低，有些班機五十個乘客還不到，頭等商務艙更只有小貓三四隻。住在上海的朋友也告訴我一個奇怪現象：港龍上海經香港到台北的來回機票一般比上海到香港的便宜，條件是在不准在香港逗留，只可以在機場商場內血拼。

其實有留意國情的朋友，都知道這是由於兩岸直航的緣故。從前來往兩岸必須在香港轉機，從上海到台北連等候時間差不多要八個小時，由於沒有其他選擇，市場需求彈性低，機票價錢非常貴，特價機票也非常少，三家經營香港台北航線的公司（國泰，華航和港龍）都賺得盤滿缽滿。全盛時期國泰四分之一的營業額來自台北香港航線，盈利應該不只此數。但自從馬英九政府零八年上台後，兩岸關係越來越密切，除了三通直航外，去年還開始局部自由行，香港作為中轉站的角色越來越不吃重。就以台北到上海路線航線而言，全程只需兩小時，對口的松山虹橋機場都在市區。台灣企業總裁七時起床，在信義區大宅吃過太太弄的營養早餐，搭乘九時半的班機，下午一時已經可以和上海客戶吃飯，下午開完兩個會，可以乘六時的飛機回台北，九時半回到家裡吃太太弄的三杯雞。吃厭了太太的三杯雞，也可以多留一會吃四川的棒棒雞或東北的北菇雞，與老朋友促膝談心，和新知己辟室尋歡，半夜前回到台北家交人。

三家公司中當然以沒有經營兩岸航線的國泰受打擊最大。國泰不是等閒之輩，經歷不少風浪，不會坐以待斃，應該已經調整策略，節省成本，減少台北航班，改用載客量低的飛機，用複雜的程式做 yield management，針對不同時間不同客路開出不同價錢。但這個風浪和以往不同，國泰喪失的乘客大部份是坐頭等商務艙買正價機票的商務乘客，而商務乘客是航空公司的命脈，消閒乘客的收入用來支付燈油火蠟，商務乘客的收入就是公司盈利。自零八年環球金融危機後，商務乘客數目已經大幅減少，現時很多坐頭等商務艙的乘客其實是用飛行哩數升級的。沒有了一班轉乘直航的商務客，簡直是雪上加霜。太古仍是國泰的大股東，但國航在回歸後也輾轉成為第二大股東。國航管理層與大陸航空單位其實是同一個班子，賺錢不是最重要目的，忠實執行黨和國家政策才能升官發財。他們不能完全控制國泰，但可以左右國泰的策略，否決一些抵觸黨和國家利益的措施。

國泰今後的路難行矣。不是太古和國泰股東的你，也應該本著香港人「趁佢病攞佢命」的宗旨，策略性選購往台灣的特價機票。我已經決定八月和十二月去台灣，定期在網站監察機票價錢，到最便宜的時候才出手購買。你呢？

Why is it so hard to understand China? 爲什麽這麼難明白國情

I am not going to repeat the obvious. The reason why it is so hard to understand China is because you have to constantly learn and unlearn. Learning something complicated is difficult enough - unlearning what you learned painstakingly is even more difficult. For example, most people learned at a heavy price that the RMB is a strong currency while in fact it has been depreciating for more than a month.

To learn and unlearn quickly is the key to survival in China. Guess who is best at doing that? The Chinese Communist Party which just celebrated its 91st birthday.

老生常談，不再重複。明白國情的難處，在於要不斷學習，不斷忘記。學習複雜的事情難，忘記辛苦學懂的事情更難。譬如很多人交了很多學費後以為人民幣是強勢貨幣，但其實人民幣已經跌了超過一個月。


不斷學習，不斷忘記是在中國的生存之道。誰是中國最強生存者？剛慶祝九十一歲生辰的中國共產黨也。

如何令小孩學好英語

昨天瀏覽經濟學人網站的語言部落格，其中一篇文章講述一些看來是 experts 或 visionaries 型的美國家長怎樣令子女學好中文，作者鄰居八歲孩子就讀紐約市唯一的公立中英雙語小學，每天下課後要額外上兩小時半的中文課。天資聰敏的孩子上了兩年中文課，中文說得字正腔圓但錯漏百出，作者因此在部落格裏徵求學過中文的讀者的意見，看看怎樣可以幫幫鄰居孩子。美國人近十年來才流行要子女學中文，但中國人自辛亥革命起都想子女學好英文，自己不懂英語也想子女透過學好英文脫亞入歐，平步青雲。香港雖然曾經是英國殖民地，中英文到現在都是法定語言，但除了曾經就讀某幾間名女校和國際學校及部份在英美加澳住過，鮮有香港人能夠說好寫好英文。很多會考英文科拿甲等乙等的也許可以作幾百字的簡單文章，但幾千字的論文就不行了，要或用英語和洋人溝通或做 presentation 更像被點了啞穴一樣，大陸和台灣的情況更不用多說。作者引用美國外交部指引，指引說美國人沒有在真正中文環境中浸淫過 (true immersion) 是很難學好中文的。我非常同意這點，覺得把它套到中國人學英語也完全合適。


差不多我認識的所有 experts 和 visionaries 型的父母都是名女校國際學校校友或在外國住過，孩子開始說話的時候已經和他們說英文，也讓他們和類似背景的孩子玩耍，到了幼稚園廣東話已經和英語說得一樣好，以後只要入到名校或國際學校，學好英文易如反掌，課餘也無須上英語興趣班可以學其他比較有趣的東西。但只有少數孩子這樣幸運，其他父母礙於自己背景或經濟能力，除了傳統學校的英文課外只可以讓孩子讀洋人教授的英語興趣班，買一些英語教材光碟給他們看，但孩子專注力有限，上課看光碟左耳入右耳出，沒有 true immersion，最多也是像鄰居孩子一樣，英語說得字正腔圓但錯漏百出。就算有經濟能力請最好的英語老師單對單教授，父母假如自己力有不遞，或不是英語社交圈子成員，單靠家裡菲傭是不能令孩子 truly immersed 在英語環境裏的。那他們有些什麽辦法呢？答案是沒有辦法。語言學有一個叫 plastics brain 的理論，理論認為在八歲前孩子的腦袋是一塊海綿，只要是在生活化的環境例如在家中或遊戲中，甚麼語言都會被吸進腦中。文章其中一個 commenter 提出一個好的例子，是把一些不同國籍的孩子放在同一地點玩遊戲，他們一會兒後自然會懂得用一些中西合璧，大人聽不懂的語言溝通。但專家認為孩子在八至十歲間會突然喪失這個能力，古人有云二十歲不稱國手終身無望，語言比圍棋更殘酷，過了十歲已經成不了 native speaker‏。中學生學外語其實與成年人沒有什麽分別，但中學生功課繁重，要學的也不只英文，不比一些 motivated 的大人，例如準備當特務外交官和在外地工作的，他們用公費學外語，有能力運用先進的學習工具，導師也可以因材施教。


那真的真的沒有辦法嗎？成功例子我也見過，但那些人差不多一定都出過國，本身非常努力也要機緣巧合，不是父母可以逼出來的。遲些等我說說我學英文的血淚史吧。


經濟學人原文
無論怎樣都要學好官話

Quick primer for English speakers on Chinese: Introduction

I was reading an article on the Economist about learning Mandarin and as expected the comments are more interesting than the article itself. After going through about fifty of them, some of which reflected misunderstandings or partial understandings, I decided to put in my two cents here. I have never taken a linguistics course and English and Mandarin/Putonghua/Guoyu are not my first languages but there are certain things I feel that are important to English speakers learning or interested in learning Chinese but don't exists in English in a form suitable for a general audience, defined as English native speakers that have university degrees not in languages and linguistics and have some high level understanding of Chinese culture, politics and history - the litmus tests are 1) knowing the difference between China, Taiwan and Hong Kong and 2) what happened in 1911 and 1949.

What is Chinese?

Chinese is the language used in China, Taiwan, Hong Kong and overseas Chinese communities. Chinese refers to written and spoken Chinese collectively.


Written Chinese
Unlike English, the written and spoken forms of Chinese have been completely different animals until the overthrown of the imperial dynasty in 1911. This is similar to the relationship between Classical Latin and Vulgar Latin, the predecessor of Romance languages like French and Spanish, in the Middle Ages. Written Chinese was standardized by an emperor that united the country in 3rd century BC and has remained pretty much the same until 1911. Works by Confucius and his disciples from the 5th century BC are still read in the original by Chinese high school students nowadays. After 1911, both the China ("PRC") and Taiwan ('ROC") governments as well as intellectuals and opinion leaders have tried to make written Chinese more similar to spoken Chinese. Moreover, in an attempt to reduce illiteracy, the PRC government simplified the characters in the 1950s while the Taiwan and Hong Kong governments did not. Nowadays, educated people in China, Taiwan and Hong Kong can read and understand what each other write as long as they are in the format they know (i.e. regular or simplified or both) but their written Chinese is almost always affected by the type of spoken Chinese they are fluent in and by where they live.

Spoken Chinese
There are at least a thousand types of spoken Chinese, commonly referred to as Chinese dialects. Examples include Beijingnese, Cantonese, Taiwanese and Shanghainese. Most of these dialects are tonal, related to each other in different degrees but mutually unintelligible and not every spoken "word" has a corresponding written Chinese character.

Mandarin/Putonghua/Guoyu
In imperial China, the emperor and the officials (aka mandarins) of the imperial courts used sanitized forms of the local dialects of their respective capitals to communicate verbally. The capital of China has been Beijing since the 15th century so the imperial courts adopted Beijingnese to create Beijing Mandarin. Unlike the original dialects, there is one-to-one mapping between written Chinese character s and spoken Mandarin so that spoken orders by the emperor and the mandarins could be recorded and transmitted in writing. In many parts of China especially the north, Beijing Mandarin was modified to become local dialects.

After 1911, The ROC government briefly united China and essentially took over Mandarin and called it Guoyu. Guoyu remained the official spoken language of Taiwan (ROC) to date. The PRC government won the civil war in 1949 and again essentially took over Mandarin and called it Putonghua. There are minor differences between Guoyu and Putonghua but they are mutually intelligible. The word Mandarin has fallen out of usage in China (replaced by Putonghua), Taiwan (replaced by Guoyu) and Hong Kong (replaced by both and used interchangeably) but is regularly used in the Western world

People from China and Hong Kong generally speak their home dialects fluently and Putonghua at different levels of fluency, with accents influenced by their home dialects. People from Taiwan generally speak Taiwanese and Guoyu with a Taiwanese accent fluently. Almost nobody except newscasters and Putonghua and Guoyu teachers speak perfect Putonghua and Guoyu. Chinese paramount leaders Mao Zedong and Deng Xiaopeng's Putonghua was so heavily accented that only people from their respective hometowns understood clearly what they said. Before Putonghua was popularized, people that spoke different dialects often had to use interpreters or pass each other written notes in meetings.

Transliteration and Pinyin
There were a few unofficial Romanization systems for Mandarin before 1911, the most famous one being the Wade-Giles system. Taipei and Kaoshiung are transliterations based on the Wade-Giles system for example. The ROC created a transliteration system called "bopomofo" (labialized consonants in Guoyu) to go with Guoyu based on parts  ("radicals") of Chinese characters. It is still used in Taiwan but is gradually replaced by the Pinyin system created by the PRC government to go along with Putonghua. The pinyin system uses the Latin Alphabet and represents tones with diacritics or numbers and is widely used both for teaching Chinese and inputting Chinese on computers and mobile devices.   

Link to the Economist article
Learning Mandarin, whatever it takes

一個 Expert 媽媽的疑難

弟弟今天接到補習學生媽媽的電話，IB 剛放榜，學生炒了英文科，只有5分，但港大法律系給了他6分的 conditional offer, 看來做不了天子門生，要到英國升學再到香港讀 PCLL 才能在香港掛牌。弟弟教的不是英文，不用問責，但他是港大法律系校友，所以找他想想辦法。這個媽媽是典型的 Expert 型家長，雖然讓兒子在名校 hea 了十一年再到國際學校 hea 多兩年，但每一步都替他想得妥當。兒子其實天資聰穎，勤奮好學，會考好像也有幾支火箭，但英文是他的 Achilles' heel，想他當律師的媽媽把他轉到國際學校再送到專攻國際學校市場的補習社惡補英文。IB 的英文科，考的真是英文，要看十多本書，也要寫千字長文，不像香港 A-Level 英文科只是填 Multiple Choice，聽鬼師奶同鬼賣魚佬講價，做同賭大細有得輝的 Practical Skills。因為 sample 完全不同，所以沒有可能 benchmark，但我覺得 IB 的 5 分應該最少是香港 A-Level 的 B，而經 JUPAS 考入港大法律系的學生也不是個個英文科拿 A 的。


我問弟弟有些什麽可以幫忙，他說不用了，港大的制度比較僵化，不像美國的大學有 development office 處理薄瓜瓜那類的 special cases，以 Expert 媽媽的人脈也應該可以直通天庭，無需我們兩個小朋友班門弄斧。弟弟只是聽聽她哭訴自己含辛茹苦，買少幾個 Birkin 幫兒子改善英文而已，安慰說話也不用多講。其實兒子去英國也不是壞事，可以學習生活化一點的英文，懂得說 received pronunciation 對在蘭桂坊搵食非常有用。現在科技發達，媽媽在兒子 iPhone 偷放追蹤 app，收買幾個同學遙距監控非常容易，扮一下 laissez-faire 也可以令兒子好過一點。要注意的是今時今日在香港當律師中文非常重要，尤其是做中港貿易融資的 solicitor 或打賣魚佬斬傷師奶這類案件的 barrister，如果兒子中四中五那兩年沒有緣分被補習天王點化，暑假回港時一定要請人幫他補補普通話和中文法律寫作，長遠來說比花在國際學校和英文補習班的學費會更為划算。

找換店

今天吃早餐途中經過蟾宮大廈外的找換店，這個鋪位自我在八十年代初搬到銅鑼灣時已經是找換店，不知有沒有轉過手，本來的鐵籠變了現在的玻璃。從前還有利園酒店時，找換店其門如市，主要客路是遊客和菲傭，換的是美元，日元和披索，旅遊前父母會在那裡換外幣，我家的菲傭好像也在那裡換錢接濟家人。那時還沒有歐羅，大陸還像古巴一樣走人民幣雙軌制，人民幣在境外不流通，外國人在大陸要用外匯券消費，人民幣官價和黑市價也有很大的差異。時光飛逝，利園酒店變了宏利保險大廈，Benz 變了 Bentley，水車屋變了飯堂，菲傭變了印傭，說英語和日語的遊客不見了，找換店也好像沒有什麽生意。雖然這裡人民幣的買賣差價和銀行差不多，但香港人一般都會在銀行換外幣，遊客也會光顧羅素街和利園山道的黑店，不會跑到這裡來。這裡的租金應該不會太貴，但究竟蟾宮大廈會不會拆卸，剛翻新了的禮頓中心和附近幾間新開的人氣食肆會不會吸引遊客，冷卻中的大陸經濟會不會令大陸遊客消費減少，這些都是未知之數。下一次經過這裡時，不知道找換店會不會不見了？

Oriental Watch 東方表行

A business school classmate who is a fund manager in the US wrote me on Facebook the other day about Oriental Watch:


Hope all is well! Had a quick work related question for you. I'm trying to reconcile 2 conflicting datapoints on luxury sales in HK and greater China. On the one hand Swiss watch export data to China continues to be strong however same store sales data from Oriental Watch is indicating a slowdown specific to watches. Just curious whether Oriental Watch is a truly high end place to buy an expensive watch or whether there are even more lux shops to go to do buy an expensive watch (think price point of US$5K and up)


My answer:


Nice to hear from you! Let me speak from my personal experience as I haven't read their annual report. 20 years ago, Oriental was THE place to go for luxury watches and I got my first Swiss watch there. While the market has greatly expanded given the influx of mainland tourists, Oriental probably lost market share to the OEMs selling direct and chains like Emperor and Chow Tai Fook that have deeper pockets to rent expensive retail space in downtown Hong Kong (Note: Central, TST and Causeway Bay). That said, I think there will be fewer mainland customers due to the softening of the mainland economy and affluent mainlanders shopping directly in Switzerland given the depreciating Euro and Swiss Franc (pegged to the Euro recently) and the even softer European economy. Oriental should be able to withstand the downturn better as they rely more on loyal local customers. But then this group is aging and you can get a Grade A fake Swiss watch in Shenzhen for about US$100. Some of their locations (Note. intersection of Hennessey and Percival) are there forever and I suspect they own the real estate so a lot of the value of the company is probably tied up there (Note: possible that the real estate is owned by the key shareholders in a separate private entity), but many of these tightly-controlled Hong Kong public companies have considerations besides increasing shareholder value, so proceed with caution ...

Microsoft tablet

Without knowing anything about the Microsoft tablet announced earlier this week, I can predict with a high level of confidence, based on my experience working for, with and against Microsoft, that it is going to fail. Microsoft sells its flagship products, all necessities, via OEMs (e.g. Dell and HP) and channel partners (large retailers and consultants) using a variety of sticks and carrots. Microsoft has never been able to sell directly to consumers and selling tablets is all about selling an experience to consumers directly. If they don't like the experience, no sticks nor carrots will change their minds. And that will not change for such a huge, byzantine company unless something really bad happens or after Bill and Steve move on.


P.S. I know Xbox is the exception. The video games console market is different from the technology market in many ways. Will try to cover that in another post.

Why is Greece so messed up?

Many people are wondering why Greece, the cradle of European civilization, ends up like this. In my opinion, Greece really belongs to Africa or the Middle East even though it is located in Europe. There is too much emotional baggage with European elites that grew up reading Greek classics like Odyssey and Iliad who tried too hard to include Greece in the EU family. When Greece was able to produce "evidence" that it satisfied the conditions of joining the Euro, they quickly welcomed Greece with open arms. There were even rumors that when Churchill was dividing Europe with Stalin after WWII, he was willing to give up Hungary (part of the Austria-Hungary Empire) and Romania to keep Greece in the Western European camp.

What happened to Greece in the two thousand years since the age of Socrates and Homer? A short history of Greece will be helpful here. In the 4th century BC, Alexander the Great united the Greek city states. He was heir-less and his empire was divided by his generals after his death and the Greece portion eventually became part of the Roman Empire. In the 4th century, Constantine the Great divided the Roman Empire into East and West Empires and established the capital of the Eastern Empire in Constantinople which is now Istanbul in Turkey. After the fall of Rome and the Western Empire in the 5th century, Greek had gradually replaced Latin as the lingua franca of the Eastern Empire and all bureaucrats and intellectuals were fluent in Greek classics. The political and religious center of the Eastern Empire was in Constantinople but Athens remained the cultural and intellectual capital. The unintended consequence was that there was a lot of migration to Greece especially Athens from other parts of the Empire. Similar to modern day New York and London, 10th century Greeks thought of themselves as Athenians, Spartans, Romans, Armenians or Turks but not Greeks, even though they spoke Greek, and have arguably never regained their sense of nationality since then.


Greece gradually became part of the emerging Ottoman Empire which finally finished off the Eastern Empire in 1453 with the fall of Constantinople. The Ottoman Empire generally governed the non-Muslim parts under the "millet" system. Turkish military governors with dictatorial powers supported by Turkish legions were installed in big cities and the legions could be dispatched quickly to handle external enemies and internal riots within their territories. Greek tax collectors were hired on a "commission" system to collect taxes from other Greeks and as a result gained political and financial power. Smaller cities and the countryside were pretty much governed by the Greek Orthodox churches and Patriarchs essentially served as spiritual leaders, governors and chief judges.


As the Ottoman Empire declined over time, Greek revolutionists secured independence in the 19th century with the help of the major European powers then, who installed a monarchy after a series of civil wars and assassinations, with kings drawn from other European royal families. The unpopular monarchy was replaced by a short-lived republic that was overthrown by a junta in the 1960s. The junta gradually transitioned power to elected politicians, many of which are from political dynasties like the Papandreous and Karamanlis. In the same period, tax collectors were replaced by bureaucrats that still operated on quasi-commission systems and the Greek Orthodox churches remained as influential on social issues nationwide and political issues in smaller cities and the countryside. Meanwhile, all Western European countries except the UK and Greece went through drastic changes through bloody revolutions (France), military conquests and defeats (France, Italy and Germany), breakups (Austria) and civil wars (Spain) which established modern democracies and national identities albeit with heavy costs and many deaths. In a nutshell, Greece is still running on a medieval system established by the Ottoman Turks, with the Turkish Governor-Tax collectors-Church triumvirate replaced by the Political dynasties-Bureaucrats-Church triumvirate. 


With no natural resources, little arable land and no meaningful exports other than olives and tourism, Greek's GDP per capita was not that much different from its non-Western European Mediterranean neighbors until its admission to the EU in 1981. Given the lack of national identity and the medieval tax collection system, tax evasion was rampant and rich Greeks stored most of their wealth abroad while other Greeks stuffed their drachmas under mattresses. The economy was buoyed by the admission to EU given foreign investments and transfer payments and further buoyed by the adoption of Euro and a global financial boom which allowed Greece to borrow at interest rates only a couple of percentage points higher than Germany. Instead of investing in education, infrastructure and structural reforms, the money inflow was used to enrich the political families, bureaucrats and the politically connected as well as expanding the welfare and pension systems while the money outflow by rich Greeks continued. All these came to an end as the Euro crisis unfolded following the 2008 financial crisis. 

Nobody knows for sure how this is going to end but a possible and frequently discussed outcome is that the Greek economy will decline precipitously and eventually match those of its less resourceful and democratic Middle Eastern and African neighbors. This is sad but comparing to other great ancient civilizations that had more severe declines or no longer exist, Greece at least has enjoyed a few decades of modern prosperity largely because of the emotional baggage of European elites.


Disclaimer: I have never been to Greece.

港式二十四考父母

近來與很多新晉父母討論教仔之道，他們有些是無所不談的好友，有些是知道我的教育背景，希望我指點一二的 friends or acquaintances，但肯定的是他們都是望子（女）成龍的二十四孝父母。 我自己沒有孩子也暫時沒有打算生孩子，尿片都沒有換過， 找我談孩子就等如找神父做婚姻輔導，全都是紙上談兵，但部落格卻正好是紙上談兵的最佳作戰室。

我認識的二十四孝父母可以歸納為以下四種：

類別	興趣班	中小學	大學	目標
Wannabes	英文，普通話，鋼琴，游泳	任何名校	香港大學	專業人士
Experts	芭蕾，劍擊，聲樂，領袖訓練	DGS, St Paul Coed, 國際學校	長春藤，牛津劍橋	出類拔萃
Visionaries	外語，遊學，liberal arts and science	任何名校	耶魯哈佛	改變世界
Laissez-faire	視乎孩子興趣	出名 hea 的名校例如華仁	沒有所謂	開心做人

Wannabes
我的父母是典型的 Wannabes，但在那個年代卻是 Experts 甚至 Visionaries. Wannabes 一般是中產，有專上學位，職業是 middle management，公務員，教師，也有些是沒有專上學位但靠努力成為成功的 small business owner 或 sales manager。他們想子女成就比自己高，也不想他們長大後像自己捱那麼多苦，但社交圈子裏都是其他的中產，自己不是名校校友也沒有能力送孩子到直資或國際學校。他們可以做的是要孩子上一些基本的興趣班例如英語會話，游泳之類，然後透過面試，gaming the system 和抽籤令孩子入到名校。小時候我爸爸希望我考進香港大學醫學系。我說不想讀醫，他就想我讀法律。我說當時正值過渡期，九七後不知道香港法律會變成怎樣，他於是想我考香港政府的政務官。爸爸和梁振英一樣，是工專(理工大學的前身）畢業，最大遺憾是考不進香港大學，所以希望兒子考進香港大學的熱門學系，拿到專業執照和金飯碗，不要像自己要在職場用努力和手段證明自己比天子門生同事優勝。成功的 Wannabe 產品一般成績中上，品格良好但性格內向，生活刻板，成年時生活安穩但遇到在專業範疇以外的事情往往不懂怎樣處理。


Experts
我很多朋友都是 Experts, 尤其是媽媽朋友。他們一般都是名校校友，在海外留過學，本身家境富裕或是月入十萬以上的成功人士。他們有金錢，能力和時間帶孩子上 playgroup，幫孩子考上寶山或基督園這些星級幼稚園和DGS, Coed 和 CIS 這些星級中小學。英文鋼琴這些俯拾皆是的興趣班不用上了，孩子上的是一些比較偏門和昂貴的興趣班例如芭蕾舞，劍擊和領袖訓練。他們到適當時候便會把孩子送到英美的寄宿學校，目的是進英國牛津劍橋或美國長春藤大學然後成為頂尖的教授，基金經理，CEO 或 大律師。成功的 Experts 產品不是狀元便是 national merit scholar，IQ，EQ 都很高而且長袖善舞但自小面對沉重壓力和激烈競爭，偶爾失手或倒楣令考試面試表現失準可能會萬劫不復，之後不能適應“普通人”的生活。

Visionaries
Visionaries 的父母萬中無一。他們絕頂聰明，是本身專業範疇內的佼佼者，也有無比的財力或影響力。Wannabes 和 Experts 朋友要孩子一天跑三個興趣班，三歲時去十五家幼稚園面試，他們冷眼旁觀，覺得費時失事。他們不相信傳統教育制度，覺得只要讓孩子進任何一間名校便可，最重要是自己怎樣培養孩子成為知識廣博，閱歷豐富，有品味，懂思考的人。他們會請私人老師教孩子讀古文，學西班牙語，週末或者帶孩子到醫院觀察醫生朋友工作，或者到深水埗籠屋體驗窮人生活，今年暑假去美國大峽谷解釋岩石形成，明年寒假到羅馬鬥獸場分析帝國興亡。他們目標是要孩子考進世上最好的大學，之後孩子做什麽，住哪裡，進研究院，退學，孩子自己拿主意。他們知道要孩子考進耶魯哈佛，單靠考試成績課外活動表現是不夠的，一定要奇兵特出。成功的 Visionaries 產品香港暫時沒有聽過，我知道的是 Bill Gates 及一些六七十後美國政客和商界金融業鉅子。不過不是每個孩子都有父母的天份和際遇去改變世界，而且成王敗寇，走歪了路可能成為下一個拉登和波爾布特。


Laissez-faire
Laissez-faire 的父母不是太多，我認識的只有幾個，但我懷疑有些是表面 Laissez-faire 實際 Experts 以減輕孩子壓力和避免與 Experts 父母衝突。Laissez-faire 父母與 Experts 父母背景接近，不同的是相信一命二運三風水，有些東西勉強不來，只要孩子開心，不學壞就可以。興趣班孩子喜歡上什麽便上什麽，中小學最好讀一些輕鬆一點的，例如國際學校或風氣自由的傳統名校例如華仁，大學讀那間念什麽到時再算。他們會多聆聽孩子感受，多從孩子角度考慮問題。龍生九種，成功的 Laissez-faire 產品各行各業，各種學歷都有，共通點是性格隨和，善解人意，也有幸福美滿的家庭。


那你應該做那種父母呢？這個是非常 personal 的決定，每人有不同背景不同局限條件，我只是希望提供一些一般父母未必會考慮的觀點，可能是旁觀者清的關係吧。

Euro end game Part 4: 3 trades if I were a professional investor

Warning: not to be attempted at home, not even with professional supervision

1. Long German bunds CDS: Greece, Spain and Italy's problems will eventually be German's problems but German bunds are still seen to be safe havens. Get in before they aren't safe.
2. Long European companies that have significant non-European exposure and short corresponding equity indices: Many European companies are not really European companies and the best example is LVMH. Find out who they are as their stocks will eventually beat their corresponding markets. Conversely, short US companies that have significant European exposure and long the S&P 500 or corresponding S&P sector indices
3. Short the RMB (or specifically by trading RMB NDFs). Decline in European exports, together with internal economic issues, will cause the People's Bank of China depreciate the currency further, which has already reversed direction. 


Any hedge fund wants to hire me?

Euro end game Part 3: What it means to individual investors

If you live in Europe or if most of your investments are in Europe and illiquid, you are screwed anyway and there is no need to read further. If you correctly predicted the crisis a year ago and invested accordingly (and I will be first to admit I am not one of them), you are rich already and there is no need to read further. This targets individual investors that have relatively diverse and global portfolios that want to take advantage of, and more importantly, limit downside risks in the growing Euro crisis.

Euro
The obvious strategy is to short the Euro or buy derivatives or ETFs that have the same effect. In the long run, the Euro should be at most at parity with the dollar even without any country exiting. In the short run, its movement is small and unpredictable. The currency market is different from other markets in that it is extremely large and include not just investors but governments and corporations that need to trade currencies no matter how much they stink from an investment perspective. The currency market is also subject to government intervention and these days governments don't hesitate to intervene given strong national interests, and in some cases, political interests. This is exactly why UBS lost $2 billion after the Swiss central bank pegged the Swiss Franc to the Euro to prevent it from appreciating and hurting exports. It is also possible to use derivatives or ETFs to make levered short bets on the Euro but they are either not available, or are too expensive on a relative basis to individual investors unless you are right most of the time. As such, my recommendation here is to reduce Euro exposure primarily by buying Dollar and Dollar-denominated assets.


Stocks
Forget about European stocks - even your grandma knows there is a Euro crisis which is already priced into European stocks and in particular, European bank stocks. Like last year, US and Asian stock markets will continue to have no direction which makes it extremely difficult to profit. If you have ideas or information on specific stocks, definitely go for them but be cognizant of the transaction costs and liquidity

Gold
I have strong reasons both for and against gold. On one hand, I don't trust governments and central banks and gold is something that they can't control by printing more or giving speeches. When governments collapse and money is worthless, gold is the only place to be. On the other hand, gold just stares at you but doesn't generate income. In general, gold is a good investment when 1) interest rates are low, liquidity is plenty and other investment options are bad, such as during Fed quantitative easing in 2009-2011 and 2) real catastrophe happens and the US treasuries no longer serve effectively as safe havens. Unless you think there will be a global financial crisis more severe than the 2008 one or World War III, I would not go all-in on gold.


Commodities other than gold
Europe produces very little of the world's commodities. Any major effects on commodities will be the result of government and central bank interventions due to the Euro crisis.

Cash and cash-equivalents (i.e. US treasuries)
Right now I think cash in dollars and dollarized currencies (e.g. HKD) is king. While savings accounts and treasuries offer paltry yields, inflation is still low and the treasuries market is unlikely to weaken and will even be bolstered by a worsened Euro crisis.

All in all, play safe and hold lots of cash. Invest strategically and opportunistically. This is not a time to make a big killing but to conserve cash and wait for the next big chance.

香港的探病文化

除了十三歲那年動眼部手術住了一晚外自己沒有住過醫院，今年因親友有病卻頻頻進出醫院，也目睹很多愚蠢荒誕的事情。很多香港人覺得探病和到朋友家作客一樣，態度要親切，要帶禮物，也不用特別注意衛生。如果親友是動小手術或正常分娩的話，這些態度沒有大礙，但大部份情形下，親友住醫院是因為身體出了問題，要被醫護人員監察及儀器藥物輔助，如果用作客的態度去探病，很容易好心做了壞事。近日聽過最驚嚇的例子，是訪客餵病人吃橙，但病人原來消化系統有問題，結果橙原封不動的在糞便裏出現，令忙碌的醫護人員要處理多一個問題。另外一個現象，是親友對醫生和公立醫院不信任。親友不肯面對現實，覺得醫生不是努力把很差的情況改善，而是做錯了事導致病人這樣糟糕。親友也不明白公立醫院的對象是全港市民，醫護人員必須有效率地工作而不能滿足病人親友所有要求及回答所有問題。對系統的不信任會令親友鼓勵病人不遵從醫生指示，私下找尋中醫偏方或找人進行靈療。假如做了不對的事，輕則令病人受騷擾，重則令病人送了命。書中看過的例子，是家人讓病人吃靈芝補品，靈芝本來可以提高免疫力，但原來病人自身免疫系統有問題，靈芝令她過分活躍的免疫系統更加活躍，幸好及時發現停止服用，否則效果不堪設想。


看過有關書籍和請教醫生朋友後有以下建議：
1） 除非醫生同意，不可以吃醫院外的東西，就算是病人要求也不可以。如果偷偷替病人進補而產生反效果，一定要如實告訴醫生
2）病人免疫力一般較低，醫院滿布細菌，探病時一定要帶口罩，勤洗手。如果自己有病癥一定要完全康復後才到醫院
3）中醫博大精深，也可能解決一些西醫束手無策的難題，但中醫一定要完全瞭解病情，親自望聞問切才能對癥下藥，可是香港的醫院尤其是公立醫院是絕少會容許中醫臨床診斷的
4）祈禱念經絕對沒有問題，其他靈療如香薰按摩和符水咒語等要以不影響病情，不干擾醫護人員工作和不打擾病人休息為前提。


最重要一點：珍惜眼前人。平時對身邊的人好，就不用到病了的時候才在醫院表達關懷以求心安理得或彌補過失。

Euro end game Part 2: Q&A

I basically concur with the Ambassador's view and here are a few pertinent points. I am using a Q&A format to make sure I get all the bases covered.

Q: Does expansionary monetary policy help generate growth?
A: This is a trillion dollar question that will elicit 12 different answers from 10 economists. My take is that it does if central banks can fool companies and individuals to believe that the growth as a result of an increase of money supply is real and sustainable which leads to more consumer spending and investment and generates real growth. No one will be fooled in Europe given the current state of affairs.

Q: What about expansionary fiscal policy?
A: This is even more controversial than the previous question and I am not attempting to provide an answer. However, this is 2012 not 2008 and any politician that supports expansionary fiscal policy is attempting political suicide.

Q: What's the chance of any country leaving the Euro in the next twelve months?
A: Very low, less than 10% in my opinion. Political will is one thing. Lack of an exit mechanism and coordination between the ECB and the various EU countries is another. Moreover, no matter Greece stays or leaves the Euro Germany and major European banks are still on the hook, so they may as well keep Greece in the Euro and focus on preventing Greece's problems from spreading to the rest of the continent.

Q: What's the chance of a full blown catastrophe?
A: Low, less than 20% in my opinion. As long as the problem lies within Europe, learning from the 2008 financial crisis, the EU/ECB/IMF triumvirate will not hesitate to use the nuclear option, which is to create an unlimited amount of Euros and issue Eurobonds to stabilize a failing country's debt. Germany will not be in the way because its leader doesn't want to be blamed as the one that dooms Europe, something that even Hitler failed to do. A full blown catastrophe will happen only if something catastrophic happens elsewhere that spreads to Europe, such as a Middle East conflict, a US or China financial crisis.or who knows what can go wrong in Russia.

Q: What's the most likely scenario?
A: Permanent stagflation as suggested by the Ambassador. Tighter fiscal and political union between the EU countries with more power centralized in Brussels. More social turmoil, riots and extremism given tension between Brussels and EU countries and emergence of fringe political parties and movements. Major wars unlikely as EU countries are too complacent and demilitarized to fight among themselves and the US can protect them from non-EU enemies. 

Euro end game Part 1: Pattaya

When I was in Pattaya last month, I was introduced to my neighbor who is the Ambassador to Thailand of a European country and had the opportunity of asking him off the record about his view of the Euro. His first reaction was that the Euro would never be broken up. The Euro was a political creation to begin with and there is too much political will to hold it together, which explains why there is no mechanism for countries to exit the Euro voluntarily or involuntarily. Given that, his prediction was that Europe would be on a road to permanent stagflation: inflation because the only way to solve a genuine debt crisis is by printing money (default is the other option but doesn't work for Europe because default means triggering credit default swaps ("CDS") that will blow up major European financial institutions) and stagnation because of the original lack of productivity growth in Europe (except Germany and a few other countries) aggravated by the debt overhang and low confidence. Buildings and churches will fall into disarray and more social disorders will take place but European governments will choose to bite the bullet and deal with these problems as they occur. I asked him if the political will to hold the Euro together has to do with avoidance of wars between major European countries and he said yes. I wanted to tell him that after 60 years of peace, his wife wouldn't want to receive food rations and his son wouldn't want to be driving a tank instead of surfing in Pattaya, but decided I would offend a very nice gentleman that I met for the first time if I said that.  

Death 死亡

Just heard that a friend of a friend around my age passed out after spending a week in the ICU. I thought death is something far away until my uncle's death two years ago. Death has struck even closer this year with three people I know leaving this world. May they rest in peace.

剛聽到一個和我年紀相若，朋友的朋友在醫院深切治療部熬了一個星期終於不治。在我叔叔兩年前過身時一直以為死亡是很遙遠的東西，但今年已經有三個相識的人離開這個世界，頓時覺得死亡原來已經越來越切身。願他們一路好走。

考琴文化

昨天和家人飲茶，談到小孩子學琴的問題。小時候我和弟弟學琴時，父母的目標是要我們考到八級。弟弟對彈琴沒有興趣，在父母強逼下考到八級便功成身退。我其實在古典音樂方面有些天分，但家人不想我的學業受影響，所以一直替我選擇一些願意上門教琴的庸師，到我高中時在機緣巧合下遇到好老師時已經太遲。我告訴媽媽：“考琴制度完全破壞細路仔對音樂既興趣，佢地平時讀書考試已經辛苦，點解要每年連續幾個月彈三首歌同做埋咁多無聊野？” 媽媽說：“咁我點知個仔學得幾好？”我答：”你明白音樂同留心觀察既話，自然知道佢有冇興趣同天分。考琴制度系比唔知頭唔知路既師奶同其他師奶 show off 自己教仔成功既方法，但點解要為咗證明自己系好阿媽而搞到個仔叫苦連天呢？”媽媽說：“你講得太深奧，我聽唔明。”

道理一點都不深奧：我們幫人和教仔的時候，很多時候幫的不是別人，而是自己。但這個顯淺的道理我也是近年才明白的。

法庭盤問指南

近日有朋友被官司纏身，找我幫忙預備法庭上的對答。我不是律師，但認識不少律師，在公事上也與不少律師交過手，為此寫了一個刑事案盤問指南，希望他可以鎮定作答，說服法官還他清白


被己方(辯護）律師盤問要注意地方:
- 說話要很慢，清晰和有自信，尤其是那些用紙筆記錄或聽力有問題的法官
- 大部份時間望法官，小部份時間望律師和觀眾，千萬不要東張西望 
- 說話不要有太多情感，但在說到被委屈的時候，流幾滴眼淚也無妨
- 你需要說事實，但不需要說出事實的全部，只需說對你有利的事情。不應主動說一些容易招惹控方律師盤問又對自己沒有什麽幫助的東西
- 法官一天到晚都在聽故事，也已經看過雙方敘述詳細案情的文件，答問題時不需要提供詳細案情，而要簡潔地陳述對你有利的論點。每個答案最好不要長過一分鐘
- 不要花心機記憶，細節可免則免，要專心思考，用心聆聽


被對方（檢察官）盤問要注意地方:
- 法庭是一個證明你無罪的地方，不是考試也不是問答比賽。假如對方律師問你很長很複雜的問題，可以叫她把問題重複，把問題簡化，或把問題拆成幾部份發問
- 當對方律師把同樣問題用不同方法發問，只需重複第一個答案
- 不要撒謊。在法庭上編造謊言只會令法官覺得你不誠實，影響你說真話時的可信性。如果有一些東西你不想正面回答，你可以說“我唔知道”,“ 我唔記得”或“我只系小市民，好多你地律師考慮既野我唔明白，麻煩你用簡單中文再問一次”
- 當你的口供與控方證人有出入時，無需解釋，只需告訴她不計較控方證人說過什麽，你只是說事實和事實的全部
- 不要隨便說一些對自己不利的東西，必要時律師會協助解困

Why do I blog? 爲什麽做博客？

Simply stated, I have too much time and too many ideas but don't want to clog my friends' Facebook newsfeed and want some feedback and provoke some discussion. This blog is unique because posts will be in Chinese, English or both depending on the context. Most of the topics will be related to economics, finance, social psychology and technology initially, but there should be a fair amount of less serious stuff.

很簡單，因為有太多時間，太多偉論，但不想阻塞朋友臉書交通，也希望得到一些回應，帶動一些討論。我會因應主題及對象用標準中文，廣東話，英文或中英對照方式發表文章 - 這是部落格獨特的地方。開始的時候大部份題材會和經濟，金融，社會心理學和科技有關，但也會家插一些不太重口味的東西。