Practising with my D90

Hello people. Happy New Year! Hope you all have a nice year of 2009, the year of Ox/Bull/Cow.

Since I bought the D90, I've been trying to bring it to different occasions, to practise with it, get used to it, before we go to Melbourne and Tasmania in the end of this month.

Here are some highlights of what I've taken so far.

Boxing day

Belated Merry Christmas to everyone. Hope you all enjoyed your holidays.


Spent today at one of the four famous gardens of Guangdong with bobo and my family.


I wanted to get myself some presents for Boxing Day, but due to various reasons, it got delayed by a few days. Fortunately that it's still on time. Thank you my friend for your help on this.



When we finally got all the contents out, I was a little bit confused with what I bought for several thousands HKD. Can you tell?

Expect the unexpected

How can you expect the unexpected? A 5-day work trip to Tokyo was unexpectedly extended to 10 days (double!!!), Bobo unexpectedly flew over for the weekend, unplanned trip to Enoshima, unexpected view:

pretty toys
Enoshima Electric Railway
Oh my god! It's Mount Fuji, finally! And it's gorgious!

This month, I've spent 15 days in Tokyo. It really sucks.

Imagine...

On Sunday, we were shopping in Causeway Bay looking for various easy-to-do, DIY and cheap kinda ways to make our home better. When we were walking through Delay No Mall, we came across 3 weird looking chairs, behind a receptionist lady. We asked her what the chairs are, who look like space capsules, sitting comfortable in the middle of a small pond. She replied, "Resting chairs". Informative enough. We noticed that there are leaflets in her counter, saying by any purchase within the mall, customer will be entitled to 20 minutes of "rest" in the chairs. Being adventurous as we are, we went straight to hunt for goods.

We got these two books in the end.
(will share images later)

They are not the point though. With the two receipts we have, we are now entitled for 20 minutes of rest on the "rest chairs" for free! Here we go, took off our slippers, change to their slippers, jumped on, head phones on, lid closed, zzzzzzzz...

Ooops, I had a coffee at home in the morning before we went out. Cannot fall asleep, while I am sure my bobo is already deep in her dreams. However, the chair, being a "rest chair", is not only good for a nap. It's got reflection of water flowing (that's why they put the chairs in the middle of a pond, to get the water reflection to be projected on the chair lid) and calming musics, to keep you relaxed. As a result, while I was inside it (or on it), I was able to focus so much on thoughts.

Half way between total consciousness (when you are totally aware of everything around you, hence kept being distracted) and dreaming (when you are not really controlling what you think), I rode on my thoughts:

Music -> No words -> Jazz -> reading a book just before we came to these chairs saying why there are no long surviving jazz bars/restaurants in Hong Kong -> opening one -> where is the best -> Happy Valley -> capital? -> have to find investments from music lovers -> in the meantime bobo always wants to have a restaurant/cafe for her own -> ..........

Actually there IS a restaurant like that (I would think there are more than one, just that I don't know them), see here.

Keeping on riding on my thoughts:

My old imagination of a flat, light-weight photos and movies player with the size of a photo frame, accepting memory sticks, CDs, USB, now they are everywhere -> next generation? -> 3-D display! Not displaying 3-D images on 2-D panels, but really 3-D display! -> I should do some research, apply for scholarship and do a PhD on this -> Using tinnie winnie LEDs lining up in a cube like structure, each having its own coordinates, showing colours each to form 3-D images -> how can you make the "black" ones look transparent? -> but such device will be immensely useful for demonstrations of e.g. art pieces, design, architecture, bikinis!

A quick blackle search today, there is already such thing, and done in an elegant way! See here for details.



You may say, I am a dreamer.
But I am not the only one.

Life

Two photos to share my life this week :-)

While stocks last

Smiling Cappuccino at Mandarin Oriental

Some pics.. can you guess where they were taken?

Picture A - hint - it's an island

Picture B - hint - it's in New Territories

Don't need to guess this one, it's our new 4 seater sofa

My understanding of current economy #3

Credit crunch

So what happened in summer last year? House prices began to fall, the collaterals which support the MBS depreciated, sub-prime mortgage payers struggled to make the payments (Reason? May be because they didn’t have a job?), values of MBS dropped dramatically (because they are leveraged products).

How US house prices dropped

So we saw the first tide of “write-downs”. What it means is: Bank B had $3 trillion worth of assets, or at least thought they had. The value is calculated using latest trading prices. But suddenly the trading prices dropped, and some of them even disappeared (depending on individual product, some MBS may cease to exist when many of the mortgage payer defaults), Bank B’s assets suddenly dropped in value. They had to fill the hole in the balance sheets (accounting regulations), they had to report losses to shareholders, they had to announce: I need to move $30 million to fill the hole left by sub-prime MBS which disappeared.



Biggest recession since great depression?

Since the credit crunch started last summer, when lots of well-known banks have multi-million dollars write-downs, a lot more have happened. It’s because in a free market, everything flows together. In a chain of implications, it looks like:
- banks have multi-million dollars write-down
- some banks realise the problem and sell all mortgage-related assets (e.g. JP Morgan)
- prices go down further
- more write-downs
- people lose confidence on economy, house prices, creditability, government, basically everything
- job losses
- more defaults because people cannot afford mortgage interests, forced to foreclosure
- more write-downs
- banks have no assets, no cash, cannot run business as usual by lending money to other banks and ordinary people; businesses don’t have operating cash, one falls after another
- etc..

In between, Fannie Mae and Freddie Mac lost so much that the US government had to tell the world – “don’t worry about the MBS in your portfolio sold by these two guys, we’ll back them up”. And there is no more major independent Wall Street investment bank:
- Bear Sterns went broke and bought by JP Morgan
- Merrill Lynch was acquired by Bank of America
- In the same weekend, the 158 year-old Lehman Brothers filed for bankruptcy. You should remember how its share prices dropped by 80% each trading day before its doomsday.
- Morgan Stanley and Goldman Sachs transited from investment banks to bank holding companies

Why people say that this recession would last longer than the ones before, and can be compared to great depression in the 1930s? I don’t know why they say that obviously, but I will guess.

From the beginning of my long entry, you can see that I deliberately started with investment banks. One of the reasons for the crisis we have today is little regulations in the world of financial product trading, and individual’s greed can be fulfilled in this world. The greed has previously built up the property bubbles, equity bubbles, FX bubbles and among others, and it has finally bitten back – the banks lost. But of course similar to previous bubble bursts, ordinary people lost more.

So the lesson to all governments is: you have to control your financial market tighter, in one way or another. Nationalisation of banks (e.g. Northern Rock, Fortis, all the big ones in Iceland, and so on) is not a good and final solution, but it was the only thing that those governments had to do and could do. The way that Chinese and Russian governments control their banks may also be too extreme. So another model needs to be found, different from all capitalism, socialism and communism.

During the transition stage from traditional banking to the next model, perhaps everyone will suffer a little – recession and slow growth. Simply because most businesses rely on banks nowadays. As of today, there doesn’t seem to be a solution to end the credit crisis which sees very little and strict lending from banks.

How does it affect you?

Since the problem began, many people has lost their jobs and savings. If you live in the UK, you must know about ICE Save. Iceland has done tremendously well as a country with fewer than 300,000 people (that’s about the same as population in Tin Shui Wai, see here) in the past few years. They had good business models, and attracted a lot of European countries to put their people’s savings in Iceland. At some point they were taking over Premier League football clubs in England e.g. West Ham.

Now, we all know that they made their money by spending UK residents’ savings on fancy financial products. When the stock market and other things go the other way (in fact, when everything like equity prices and property prices is shooting up, no body really thinks they’d ever go down), they lost all the money. They were on the brink of going bankrupt, as a country.

If you live in Hong Kong, you must have heard about Lehman Brother mini bonds. The fact is, Lehman Brothers had a lot of products in the market e.g. warrants, structured products, Credit Default Swaps, and others. So when they go bankrupt, many of these products became junk.

Just imagine that you’ve paid HKD $5,000 to a fruit shop owner, and in a contract that you both signed it says the owner will provide you fruits every day for 3 years (good deal, eh? Just under $5 a day). Now the fruit shop has disappeared. You won’t get your money back. You can file complaints to the party who made you sign the contract. But it could be your wife who convinced you, or your greed in your mind.

When will the story end?

I don’t know. As I said before, the world now needs to come up with a new and better model for banks to operate properly. No more business as usual, because it will be different.

I’d say, as a risk management consultant as Thomson Reuters, banks need to look at their risks PROPERLY. Not just spend some money on software and have fancy reports, but really look into it to analyse what risks they are exposed to, and take actions to hedge them, not hide them.

What can we do now?

Observe and learn. Similar to all lectures, there will be costs e.g. the money you lose when participating in the market. But this could be once in a life time event.

Some ripples in the financial world, high unemployment won’t kill the world. Nuclear war and/or global warming will. You still live, so enjoy it.