Difference between a pessimist and optimistist

A pessimist thinks things can't get any worse.

An optimistist knows they can.

 

I Bond, one way to beat inflation

You can say I can finally sleep without the worry of mounting inflation.

I-Bond, wihich you can buy at www.publicdebt.treas.gov, at no additional fee. The interest will be 1% higher than inflation rate. From now until April 2006, it's 6.73%, which is twice of what I am getting from ING Direct.

 

It's also free from local (state) tax and deferrable for federal tax.

 

Sounds too good to be true? Here's the catch. If you redeem I-Bond within the first 5 years of issurance, you lose 3 months interests.

Found what I am looking for in SF

Today KQED aired The Grateful Dead Movie,

 

Duration: 2:13:04 CC Stereo TV14
Over 30 years ago, in 1974, The Grateful Dead decided to take a break from playing together. Knowing that this might be the close of an era, they filmed 5 consecutive concert nights in San Francisco at Bill Graham's Winterland Arena. This ambitious project, complete with trippy animation, came to be known as "The Grateful Dead Movie". The director and crew captured the concert, interviews and backstage camaraderie with 7 cameras. On the final night the band invited former drummer Mickey Hart to join them onstage. Jerry Garcia then spent 2.5 years editing this "love letter to Dead Heads," and was originally released in 1977. This historical and musical journey of the band has now been painstakingly restored in its original widescreen version and remixed in stereo surround sound.

 

Watching the movie, I am really moved by the long haired people in there. They were the spirit of SF. I can still see people like that in Berkeley, but not at Union Square. I bet some of the same crowd in the concert crowd was in today's Auto Show, but they have shortned their hair and shaved their beard since then.

 

 

梦想

This is photo.net's Picture Of the Week.

Haven't been there for a while. Still the best place with so many talented people.

And my dream,

is to become one of them.

 

May (2002)

For me, this is the first truly scary movie after Dawn of the Dead. Kudos to McKee's debut.

Both of them are so scary that I can't finish watching without a 5 min pause in the middle to take a breath.

Whether you like it or hate it, you won't forget it.

 

Below is a review stolen from http://www.imdb.com/title/tt0303361/

 

Make Sure You Rent A Comedy...For Afterward!, 9 August 2003
Author: Christopher T. Chase (cchase@onebox.com) from Arlington, VA.

Some movies use gore to distinguish themselves from other horror movies in a unique way, and boy, do they ever succeed. DEAD-ALIVE, EVIL DEAD, RE-ANIMATOR. Others, rather than settle for OTT gore, try to creep you out with old-school tactics that wriggle under your skin into places that are anything but comfortable...places that you only visit in your dreams. THE OTHERS, THE SIXTH SENSE and SIGNS are those kinds of films.

And then you get those rarities...those exceptional films that are not for everyone, that manage to be both creepy and gory at the same time, in a way that's not quite easily classifiable, and so they are never considered "mainstream" by mass audiences in the multiplexes, or critics into selling sound-bites rather than writing decent reviews.

Films like TOURIST TRAP, THE FUNHOUSE, George Romero's MARTIN, ALICE, SWEET ALICE, SISTERS and SILENT SCREAM are some prime examples. To this list, we can now add MAY.

The less you know about this film going in, the more shocking the denoument is. And even those who have heard quite a bit about it, shouldn't be too quick to make assumptions. MAY goes in a direction that most films of this genre hint at, but never commit to. The result is a tale alternating between twisted tenderness and tremendous terror, like nothing you've seen in a long while. And in the true tradition of creepy/gory/blackly comic films, there's no middle of the road with this one. You will love it or absolutely hate it, but either way, you will not walk away from it unaffected. First-time writer/director McKee has seen to that, and then some.

Angela Bettis may need some serious therapy, following up her role in the CARRIE TV remake with this one. I'd be tempted to call it a pattern, since May does share a lot of similarities with Carrie White; the overprotective, overbearing mothers, the role of societal outcast set at an early age. But that's where the similarities end. Where Carrie's weapon of choice was her soon-to-be-not-so-latent telekinetic powers, May's power lies in her very deceptive talent to appear shy, docile, reclusive and weird, but supposedly "harmless." Obviously lacking in the social interaction department, she still has a quality about her that elicits our empathy and sympathy. The characters she meets in the story feel the same way and...well, you have to see what happens to belive it.

Indie faves Jeremy Sisto (SIX FEET UNDER), Anna Faris (the SCARY MOVIE series) and James Duval (A RIVER MADE TO DROWN IN) round out the principal cast. Not to mention May's first 'friend' that serves as a catalyst for the story...a doll given her by her mother, which may have you swearing off dolls for the rest of your life!

I'm not going to give away the main plot, leaving that to other reviewers and their assessments. I will say this: if your horror movies usually have to be series sequels with a number plastered in front of them, MAY might be too much imaginative derangement for you to handle. But if you're in the mood for something completely different, then rent it NOW, by all means. Just make sure you have a good, stupid comedy to take your mind off of it afterward. Trust me on this; even if it's DUDE, WHERE'S MY CAR? for the fifteenth time, TAKE IT. You'll feel...well, maybe a little better after watching this.

Do you know enough trivia about movies

As if those quiz shown before the movie shows are not enough, you can find and even create more here.

http://funtrivia.com/

 

 

Karl Rove is such an impressive genius

This summary is not available. Please click here to view the post.

Finding more ways to interact with the outside world

From my own experience, I realize that I got addicted to certain things, mainly because  I am to used to and later confined myself to a limited number of ways to interact with the world.
I buy too much junk online, because I don't know any other ways to express my appreciation to a new product than filling out my credit card number and click submit.
I took too many mediocre photos, because I don't know other ways to express my enjoy my brief stay in a fantastic place, except being trigger-happy.
Facing a computer, I routinely open a browser, because I don't know how to start the other fancy things that a computer can do. 

If I were to have a new year resolution, let it be: having more ways to interact with the outside world.

 

Just think of another line:

Sitting in the car, I can only press the pedal for throttle or brake.

But I guess there is little I can do about that, except getting a satellite radio.

A quote from AZN's Singapore short film project

"God gives us memory so we have roses in December."

--- A nurse said, stopped fanning her bed-bound patient to wipe off the tears from his closed eyes.

Bush-it in Kyoto and Beijing

Talking about political freedom in China, I am all for it. But to hear such comments from a totalitarian moron like Bush, just make the whole thing becomes more fishy.

 

Every time Bush talks about freedom, he is either trying to threaten with a up-coming war, or making his case to justify an existing war. If even the Republicans don't trust him, why should any sensible people that has no rights what so ever?

关于国内房市的讨论

http://www.tianya.cn/new/publicforum/content.asp?idwriter=4037834&key=379271611&stritem=house&idarticle=15070&flag=1&hotid=340

http://www6.tianya.cn/new/Publicforum/Content.asp?idWriter=797268&Key=875914826&strItem=house&idArticle=15147&flag=1

USToday: Burn your business plan!

Posted 11/9/2005

By David E. Gumpert, Gumpert Communications

Reprinted courtesy of EntreWorld.org

(Published: January 2003)

Back in 1995, when I co-founded an Internet
marketing company, NetMarquee, one of the first tasks my partner and I
took on was to write a thorough business plan in order to raise money
for our new venture. After all, isn't that the first lesson you learn
in any course having to do with starting a business? Isn't that what
the business media recommend in hundreds of articles and books?

My partner and I sent our plan around to venture
capitalists and met with several to make presentations. No money came
of this effort, and at several points during 1995 we contemplated
giving up on the venture. But we had recruited a board of advisors with
broad experience in growth-company strategy, finance, and marketing,
and the members advised us to spend less time massaging our business
plan and more time making sales. The financing will come later, they
suggested.

So we made a few sales, enough to stay afloat
through 1996. In 1997, when we made a major change in our strategy and
product offerings, and sales failed to grow as quickly as we expected,
we decided to try the financing route again. This time, we figured,
financing should be easier to obtain, since we were fairly well
established.

Once again, our advisory board told us not to
bother. Professional investors don't want to back a company that
actually needs money. They're like bankers in that they like to support
companies that don't necessarily need the funds. Get out there and
promote yourselves and make more sales, they advised us, in what was
becoming a regular refrain.

Banking on the plan

But we were stubborn. We dusted off our old
business plan from a couple years back and spent many hours rewriting
and updating the document. We went off seeking financing and, once
again, it was thumbs down. Down certainly described our feeling, since
it seemed that every new Internet-related venture in the world was
obtaining financing. The numbers would suggest that, as the amount of
venture capital — a seemingly substantial $7.7 billion in 1995 — had
grown to $16.4 billion by 1997, according to the MoneyTree Survey,
sponsored by Price Waterhouse Coopers, Venture Economics, and the
National Venture Capital Association.

Our choice at this stage was stark: Find ways to
grow the business without financing or fold up the tent. We took the
first choice, and lo and behold, the business began to gain traction.
We engaged public-relations professionals, and they succeeded in
getting several of our most successful corporate clients written up in
business and industry trade publications — with mention of our agency
as the key force behind these clients' online success. Those write-ups
got the phones ringing with new prospects, several of which turned into
clients that generated additional sales.

Even as the business grew, though, we were
vigilant about monitoring our expenses and aggressively collecting
receivables. We got a kick out of the stories of venture-backed
Internet start-ups purchasing fancy $1,200 conference room chairs. Our
conference room chairs were mostly desk chairs we wheeled in from
vacant workstations for meetings, and then wheeled back out when
meetings ended. At one point, we partnered with another agency, with
venture backing, which confided that many of its receivables were six
months or more past due. Once again we had to chuckle, because we had
become obsessive about phoning clients on day 31 if invoices weren't
paid, and thereby maintaining a healthy cash flow.

By 1999, we were operating profitably at $2
million annual revenues, with nearly 20 employees. The amount of
venture capital being invested nationally had soared to an astounding
$55.5 billion, but we paid little attention, as our interest in outside
financing had dropped significantly. (Venture capital availability
would soar even further in 2000, to a peak of $85.5 billion.)

Rethinking the plan

My point in recounting our financing experience
is twofold. First, the venture capital route is closed to the vast
majority of businesses that seek it out — even during good times. While
it might have seemed back then that nearly every business that wanted
it was receiving venture capital, the reality is that most
entrepreneurs have the same experience my partner and I had: their
carefully crafted business plans are rejected out of hand by venture
capitalists. Second, it's often amazing what you can accomplish without
the financing you are convinced is essential to stave off failure.

As for the rest of the story: our success in
1998 and 1999 attracted the attention of a publicly held company that
was seeking the expertise we offered in developing and managing online
content, and in December 1999 this company acquired NetMarquee. Even
though an acquisition is really an investment situation, the acquirer
never asked to see our business plan; it only wanted to see financial
projections under several different scenarios.

I came to realize then that in three potentially
significant financing-related events for our company, namely seeking
financing in 1995 and 1997, and then selling the company in 1999, a
written business plan had been of absolutely no use to us. You might
say, "Well, just having gone through the process of writing a plan
probably helped you grow the business." I wish I could say that, but I
have doubts about that as well. The written plans we put together
assumed faster growth based on having received funding. The plan we
actually followed was a slow-growth plan that wasn't part of our
write-up.

The realization about planning was especially
important to me, since prior to launching NetMarquee, I had authored
two widely read books about how to write a business plan: Business
Plans That Win $$$: Lessons from the MIT Enterprise Forum (with Stanley
Rich) and How to Really Create a Successful Business Plan. After we
sold NetMarquee, I decided to revisit the whole subject of business
planning. I spoke with entrepreneurs who had obtained financing, and I
surveyed venture capitalists to learn the real role of business plans
in raising money. I confirmed my experience as an entrepreneur. A lot
of potentially deserving entrepreneurs never get their plans funded,
and many others that do obtain funding actually do so without ever
writing a business plan.

Act, don't plan

I decided to write a book challenging the preeminence of the written business plan, with the same title as this article: Burn Your Business Plan! What Investors Really Want from Entrepreneurs
(www.lausonpub.com). It argues that entrepreneurs should focus their
company-building efforts on such tasks as creating a website that
communicates their business model, obtaining publicity, keeping the
finances under control, and making sales before thinking seriously
about writing a business plan.

According to the conventional wisdom, we're now
in the third year of tough economic times. Business is quite difficult
in many industries, and financing seems to be unavailable to young
companies. Yet it's interesting to note that during the first three
quarters of 2002, venture capitalists have invested nearly $17 billion,
more than all of 1997, which at the time seemed like a great year.

Increasingly, though, I am convinced that the
key to the success of most young businesses is to ignore all the
venture capital statistics and admonitions to write business plans, and
instead use all the creativity and diligence you can muster to tend to
your business. Put another way, you should be doing, rather than
writing about what you will do.

interesting comment on blogging

When asked why she has not got a blog of her own, a former New York
Times reporter said, the first thing you learn about being a reporter,
is that, without an editor to keep things in check, a reporter will
inevitably ruin an article into personal ranting, and that's what a
blog is.

5D full review posted on dpreview

http://www.dpreview.com/reviews/canoneos5d/

But the bottom line really echoes with me, who has been spoiled by sigma 14mm for D70 and a Tamron 11-18 for 350D.

"For everyone else however it's a hard decision. If the EOS 5D had been introduced a couple of years ago before the availability of designed-for-digital ultra-wide angle zoom lenses it could easily have walked away with a clear lead against 'cropped sensor' models. However there are many photographers quite happy with the results they get from their current cameras, only history will tell if the EOS 5D is the start of a full frame revolution or simply the first of a new niche format."

A very insightful article from economist

http://www.economist.com/opinion/displaystory.cfm?story_id=4079027

The global housing boom

In come the waves

Jun 16th 2005
From The Economist print edition

The worldwide rise in house prices is the biggest bubble in history. Prepare for the economic pain when it pops

NEVER
before have real house prices risen so fast, for so long, in so many
countries. Property markets have been frothing from America, Britain
and Australia to France, Spain and China. Rising property prices helped
to prop up the world economy after the stockmarket bubble burst in
2000. What if the housing boom now turns to bust?

According to estimates by The Economist,
the total value of residential property in developed economies rose by
more than $30 trillion over the past five years, to over $70 trillion,
an increase equivalent to 100% of those countries' combined GDPs.
Not only does this dwarf any previous house-price boom, it is larger
than the global stockmarket bubble in the late 1990s (an increase over
five years of 80% of GDP) or America's stockmarket bubble in the late 1920s (55% of GDP). In other words, it looks like the biggest bubble in history.

The
global boom in house prices has been driven by two common factors:
historically low interest rates have encouraged home buyers to borrow
more money; and households have lost faith in equities after
stockmarkets plunged, making property look attractive. Will prices now
fall, or simply flatten off? And in either case, what will be the
consequences for economies around the globe? The likely answers to all
these questions are not comforting.

The increasing importance of house prices in the world economy prompted The Economist to start publishing a set of global house-price indices in 2002 (see article).
These now cover 20 countries, using data from lending institutions,
estate agents and national statistics. Our latest quarterly update
shows that home prices continue to rise by 10% or more in half of the
countries (see table). America has seen one of the biggest increases in
house-price inflation over the past year, with the average price of
homes jumping by 12.5% in the year to the first quarter. In California,
Florida, Nevada. Hawaii, Maryland and Washington, DC, they soared by more than 20%.

In
Europe, prices have long been at dizzy heights in Ireland and Spain,
but over the past year have also spurted at rates of 9% or more in
France, Italy, Belgium, Denmark and Sweden. Both France (15%) and Spain
(15.5%) have faster house-price inflation than the United States.

By
contrast, some housing booms have now fizzled out. In Australia,
according to official figures, the 12-month rate of increase in house
prices slowed sharply to only 0.4% in the first quarter of this year,
down from almost 20% in late 2003. Wishful thinkers call this a soft
landing, but another index, calculated by the Commonwealth Bank of
Australia, which is based on prices when contracts are agreed rather
than at settlement, shows that average house prices have actually
fallen by 7% since 2003; prices in once-hot Sydney have plunged by 16%.

Britain's housing market has also cooled rapidly. The Nationwide
index, which we use, rose by 5.5% in the year to May, down from 20%
growth in July 2004. But once again, other surveys offer a gloomier
picture. The Royal Institution of Chartered Surveyors (RICS)
reports that prices have fallen for ten consecutive months, with a net
balance of 49% of surveyors reporting falling prices in May, the
weakest number since 1992 during Britain's previous house-price bust.
The volume of sales has slumped by one-third compared with a year ago
as both sellers and buyers have lost confidence in house valuations.
House-price inflation has also slowed significantly in Ireland, the
Netherlands and New Zealand over the past year.

Since 1997, home
prices in most countries have risen by much more in real terms (ie,
after adjusting for inflation) than during any previous boom. (The
glaring exceptions are Germany and Japan, where prices have been
falling.) American prices have risen by less than those in Britain, yet
this is still by far the biggest boom in American history, with real
gains more than three times bigger than in previous housing booms in
the 1970s or the 1980s.

The most compelling evidence that home
prices are over-valued in many countries is the diverging relationship
between house prices and rents. The ratio of prices to rents is a sort
of price/earnings ratio for the housing market. Just as the price of a
share should equal the discounted present value of future dividends, so
the price of a house should reflect the future benefits of ownership,
either as rental income for an investor or the rent saved by an
owner-occupier.

Calculations by The Economist show that
house prices have hit record levels in relation to rents in America,
Britain, Australia, New Zealand, France, Spain, the Netherlands,
Ireland and Belgium. This suggests that homes are even more over-valued
than at previous peaks, from which prices typically fell in real terms.
House prices are also at record levels in relation to incomes in these
nine countries.

America's ratio of prices to rents is 35% above
its average level during 1975-2000 (see chart 1). By the same gauge,
property is “overvalued” by 50% or more in Britain, Australia and
Spain. Rental yields have fallen to well below current mortgage rates,
making it impossible for many landlords to make money.

To
bring the ratio of prices to rents back to some sort of fair value,
either rents must rise sharply or prices must fall. After many previous
house-price booms most of the adjustment came through inflation pushing
up rents and incomes, while home prices stayed broadly flat. But today,
with inflation much lower, a similar process would take years. For
example, if rents rise by an annual 2.5%, house prices would need to
remain flat for 12 years to bring America's ratio of house prices to
rents back to its long-term norm. Elsewhere it would take even longer.
It seems more likely, then, that prices will fall.

A common
objection to this analysis is that low interest rates make buying a
home cheaper and so justify higher prices in relation to rents. But
this argument is incorrectly based on nominal, not real, interest rates
and so ignores the impact of inflation in eroding the real burden of
mortgage debt. If real interest rates are permanently lower, this could
indeed justify higher prices in relation to rents or income. For
example, real rates in Ireland and Spain were reduced significantly by
these countries' membership of Europe's single currency—though not by
enough to explain all of the surge in house prices. But in America and
Britain, real after-tax interest rates are not especially low by
historical standards.

Betting the house

America's
housing market heated up later than those in other countries, such as
Britain and Australia, but it is now looking more and more similar.
Even the Federal Reserve is at last starting to fret about what is
happening. Prices are being driven by speculative demand. A study by
the National Association of Realtors (NAR) found that 23%
of all American houses bought in 2004 were for investment, not
owner-occupation. Another 13% were bought as second homes. Investors
are prepared to buy houses they will rent out at a loss, just because
they think prices will keep rising—the very definition of a financial
bubble. “Flippers” buy and sell new properties even before they are
built in the hope of a large gain. In Miami, as many as half of the
original buyers resell new apartments in this way. Many properties
change hands two or three times before somebody finally moves in.

New, riskier forms of mortgage finance also allow buyers to borrow more. According to the NAR,
42% of all first-time buyers and 25% of all buyers made no down-payment
on their home purchase last year. Indeed, homebuyers can get 105% loans
to cover buying costs. And, increasingly, little or no documentation of
a borrower's assets, employment and income is required for a loan.

Interest-only
mortgages are all the rage, along with so-called “negative amortisation
loans” (the buyer pays less than the interest due and the unpaid
principal and interest is added on to the loan). After an initial
period, payments surge as principal repayment kicks in. In California,
over 60% of all new mortgages this year are interest-only or
negative-amortisation, up from 8% in 2002. The national figure is
one-third. The new loans are essentially a gamble that prices will
continue to rise rapidly, allowing the borrower to sell the home at a
profit or refinance before any principal has to be repaid. Such loans
are usually adjustable-rate mortgages (ARMs), which leave the borrower additionally exposed to higher interest rates. This year, ARMs have risen to 50% of all mortgages in those states with the biggest price rises.

The
rapid house-price inflation of recent years is clearly unsustainable,
yet most economists in most countries (even in Britain and Australia,
where prices are already falling) still cling to the hope that house
prices will flatten rather than collapse. It is true that, unlike share
prices, house prices tend to be somewhat “sticky” downwards. People
have to live somewhere and owners are loth to accept a capital loss. As
long as they can afford their mortgage payments, they will stay put
until conditions improve. The snag is that eventually some owners have
to sell—because of relocation, or job loss—and they will be forced to
accept lower prices.

Indeed, a drop in nominal prices is today
more likely than after previous booms for three reasons: homes are more
overvalued; inflation is much lower; and many more people have been
buying houses as an investment. If house prices stop rising or start to
fall, owner-occupiers will largely stay put, but over-exposed investors
are more likely to sell, especially if rents do not cover their
interest payments. House prices will not collapse overnight like
stockmarkets—a slow puncture is more likely. But over the next five
years, several countries are likely to experience price falls of 20% or
more.

While America's housing market is still red hot,
others—in Britain, Australia and the Netherlands—have already cooled
(see chart 2). What lessons might they offer the United States?

The
first is that, contrary to conventional wisdom, it does not require a
trigger, such as a big rise in interest rates or unemployment, for
house prices to decline. British home prices started to fall in the
summer of 2004 after the Bank of England raised rates by a modest one
and a quarter percentage points. Since 2002, the Reserve Bank of
Australia has raised rates by exactly the same amount and unemployment
is at a 30-year low, yet home prices have fallen. The Federal Reserve's
gradual increase in rates by two percentage-points over the past year
has done little to scare away buyers, because most still have
fixed-rate mortgages and long-term bond yields have remained unusually
low. But as more Americans have been resorting to ARMs, so the housing market is becoming more vulnerable to rising rates.

Rung at the bottom

British
and Australian prices have stalled mainly because first-time buyers
have been priced out of the market and demand from buy-to-let investors
has slumped. British first-timers now account for only 29% of buyers,
down from 50% in 1999. And, according to the National Association of
Estate Agents, buy-to-let purchases are running 50% lower than a year
ago. As prices become more and more heady in America, the same will
happen there.

British experience also undermines a popular
argument in America that house prices must keeping rising because there
is a limited supply of land and a growing number of households. As
recently as a year ago, it was similarly argued that the supply of
houses in Britain could not keep up with demand. But as the expectation
of rising prices has faded, demand has slumped. According to RICS,
the stock of houses for sale has increased by one-third over the past
year. America has faster population growth than Britain, but its supply
of housing has also been rising rapidly. Economists at Goldman Sachs
point out that residential investment is at a 40-year high in America,
yet the number of households is growing at its slowest pace for 40
years. This will create excess supply.

Another mantra of housing
bulls in America is that national average house prices have never
fallen for a full year since modern statistics began. Yet outside
America, many countries have at some time experienced a drop in average
house prices, such as Britain and Sweden in the early 1990s and Japan
over the past decade. So why should America be immune? Alan Greenspan,
chairman of America's Federal Reserve, accepts that there are some
local bubbles, but dismisses the idea of a national housing bubble that
could harm the whole economy if it bursts. America has in the past seen
sharp regional price declines, for example in Boston, Manhattan and San
Francisco in the early 1990s. This time, with prices looking overvalued
in more states than ever in the past, average American prices may well
fall for the first time since the Great Depression.

But even if
prices in America do dip, insist the optimists, they will quickly
resume their rising trend, because real house prices always rise
strongly in the long term. Robert Shiller, a Yale economist, who has
just updated his book “Irrational Exuberance” (first published on the
eve of the stockmarket collapse in 2000), disagrees. He estimates that
house prices in America rose by an annual average of only 0.4% in real
terms between 1890 and 2004. And if the current boom is stripped out of
the figures, along with the period after the second world war when the
government offered subsidies for returning soldiers, artificially
inflating prices, real house prices have been flat or falling most of
the time. Another sobering warning is that after British house prices
fell in the early 1990s, it took at least a decade before they returned
to their previous peak, after adjusting for inflation.

Another
worrying lesson from abroad for America is that even a mere
levelling-off of house prices can trigger a sharp slowdown in consumer
spending. Take the Netherlands. In the late 1990s, the booming Dutch
economy was heralded as a model of success. At the time, both house
prices and household credit were rising at double-digit rates. The rate
of Dutch house-price inflation then slowed from 20% in 2000 to nearly
zero by 2003. This appeared to be the perfect soft landing: prices did
not drop. Yet consumer spending declined in 2003, pushing the economy
into recession, from which it has still not recovered. When house
prices had been rising, borrowing against capital gains on homes to
finance other spending had surged. Although house prices did not fall,
this housing-equity withdrawal plunged after 2001, removing a powerful
stimulus to spending.

Housing-equity withdrawal has also fallen
sharply over the past year in Britain and Australia, denting household
spending. In Australia, the 12-month rate of growth in retail sales has
slowed from 8% to only 1.8% over the past year; GDP
growth has halved to 1.9%. In Britain, too, a cooling of the housing
market has been accompanied by an abrupt slowdown in consumer spending.
If, as seems likely, home prices continue to fall in both countries,
spending will be further squeezed.

Even a modest weakening of
house prices in America would hurt consumer spending, because
homeowners have been cashing out their capital gains at a record pace.
Goldman Sachs estimates that total housing-equity withdrawal rose to
7.4% of personal disposable income in 2004. If prices stop rising, this
“income” from capital gains will vanish.

And after the gold rush?

The
housing market has played such a big role in propping up America's
economy that a sharp slowdown in house prices is likely to have severe
consequences. Over the past four years, consumer spending and
residential construction have together accounted for 90% of the total
growth in GDP. And over two-fifths of all private-sector
jobs created since 2001 have been in housing-related sectors, such as
construction, real estate and mortgage broking.

One of the best
international studies of how house-price busts can hurt economies has
been done by the International Monetary Fund. Analysing house prices in
14 countries during 1970-2001, it identified 20 examples of “busts”,
when real prices fell by almost 30% on average (the fall in nominal
prices was smaller). All but one of those housing busts led to a
recession, with GDP after three years falling to an
average of 8% below its previous growth trend. America was the only
country to avoid a boom and bust during that period. This time it looks
likely to join the club.

Japan provides a nasty warning of what
can happen when boom turns to bust. Japanese property prices have
dropped for 14 years in a row, by 40% from their peak in 1991. Yet the
rise in prices in Japan during the decade before 1991 was less than the
increase over the past ten years in most of the countries that have
experienced housing booms (see chart 3). And it is surely no
coincidence that Japan and Germany, the two countries where house
prices have fallen for most of the past decade, have had the weakest
growth in consumer spending of all developed economies over that
period. Americans who believe that house prices can only go up and pose
no risk to their economy would be well advised to look overseas.

这几年美国房地产市场一直火爆的原因，我的拙见

这几年美国房地产市场一直火爆的原因，绝对不在于房屋本身的供需关系。因为美国的人口增长一直很平。与房地产价格的飞涨完全不成正比，也不单单是因为利息低，因为美国20年来的利息一直就没怎么长。

为什么911以后这几年房地产价格背离这两条基本线突然起飞？
只要看看变化的因素: 政府从Clinton时代的surplus, 变成赤字$51 Trillion, 相当于GDP的4.5倍。

要付Baby Boomer的Medicare, Social Security账单，更要付Iraq每月5.8 Billion的账单。只有多印钞票，就是通货膨胀。如果说飞涨的石油价格还不足以说明通胀(与石油公司操纵市场有关)，牛奶，大豆的价格总可以了吧。
这种时候，利息一定上涨，否则银行贷出去的钱就贬值了。但是利息升得迟，升得慢。这时候消费者应该做什么才能防止政府用通货膨胀来明火持杖的抢钱? 当然是从银行贷更多的钱，然后锁定低利息。贷来的钱做什么，当然是买房子。不光要买美国的房子，还要买中国的房子，欧洲的房子，因为美元通货膨胀，人民币和欧元相对美元升值了。

为什么现在房价平了? 一个是季节（冬天买房的人少），一个是利息涨上来了。

但是$51 Trillion的账总要通过某种方法转嫁到老百姓头上（中国的老百姓也不能幸免，因为中国政府买了美国$264 Billion的Treasury Bond）。所以房地产市场还会继续火爆，直到利息涨到跟通货膨胀一样的程度。

If China Bubble burst

今天碰巧读到很多关于中国经济的报道。于是想，即使有那么多银行坏账，中国经济的泡沫是不会爆的，因为所有的跨国大公司都已经泥足深陷，想撤也不可能了。
最坏的情况，政府也可以用通涨让十几亿老百姓买单。
但是作为一个被苛捐杂税盘剥的草民，如何才能从这浇了水泥的泡沫里捞到点什么呢？

Asia Times: The Great Wall of shopping

The Great
Wall of shopping
By Pepe
Escobar

SHANGHAI - "Adore the world. Be
after it. Be in it."

This
boardwalk advertisement
greets at least half a million passers-by
every day on Nanjing Dong Lu, Shanghai's
premier commercial thoroughfare, where almost 40
years ago hordes of vigilant Red Guards waved Mao
Zedong's Little Red Book. It is promoting - what
else - a new shopping mall.

And
Shanghainese are indeed more than adoring, "after"
and "in" this (shopping) world. Still growing at a
dizzying 12% a year - to the cries of
"unsustainable" by rows of economists in bad suits
- conspicuous consumption in this greatest of Asian
cities peppered with 40 mega-malls and counting,
is the rule. So long live the consumer revolution.
In the first Ferrari showroom, opened last summer,
a "pedestrian" Maranello costs a mere US$475,000.
At Giorgio Armani's flagship Chinese store, facing
the Bund, a Shanghainese-Milanese fusion explodes
in silky minimalism. Even the jewelry design is
sinified. Communist Party cadres aren't hip to
Armani yet, but anyway the Milan fashion icon has
already cornered the luxury market. A man's
jacket costs only 10,000 yuan ($1,220) - more
than the annual disposable income of a
Shanghainese mid-level executive.


Smart Shanghainese chic, MTV-style, shopping
till they drop in the mall row of Huaihai Road, week
in and out, look as though they could be in
Los Angeles, London, Bangkok or Sao Paulo. And if you're
in no mood to shop, the party forces you
to. State holidays are longer - some a week long,
like the upcoming Chinese New Year in
early February, encouraging internal tourism. The
six-day week enforced by state-owned enterprises (SOEs)
is no longer the norm. Power cuts,
according to Shanghainese, always happen when
the government transfers electricity from factories
to malls. There's an ongoing credit-card boom. And
everybody still saves as much as 40% of his income. For
the right product and the right marketing, the
(polluted) Shanghainese sky is the limit. Talk
about the latest, supreme object of desire, the LG
G920 cell phone, retailing at 4,999 yuan ($609),
is it.

But in a country where in 2003 (the
latest data available) the average per capita
disposable income in urban areas was 8,472 yuan
($1,033) a year, while for farmers it was only
2,622 yuan ($319) a year, who's really climbing
the Great Wall of shopping?

Middle
classes unite
No less than 46.8% of Chinese
now believe they belong to the middle class,
according to a recent poll by the Chinese Academy
of Social Sciences (CAAS). This may be an illusion
of success, but it is nonetheless relentlessly
reinforced by the advertising industry in order to
fuel mass consumption. Chinese TV is a notorious
deluge of ads, occasionally interrupted by soap
operas, news and sports. For Shanghainese serial
shoppers, desire is indeed reality.


According to Li Chunling, a researcher at
the CAAS/Sociology Institute, the Chinese middle
class only materialized in the mid-1990s: she says
the concept is a media-fabricated myth. Without a
precise definition, many Chinese would arguably
have doubts about placing themselves in this
category. But certainly not the Shanghainese.


The CAAS research identified, as far as
profession is concerned, five categories
considered to be part of the middle class: Party
cadres, business managers, chief executive
officers in the private sector, qualified
technicians and office staff. In terms of revenue,
researchers selected people with a higher revenue
than the average local monthly salary. This varies
a lot from region to region. In Beijing, the
average monthly salary is 10,000 yuan ($1,220),
but it's much lower in provincial cities. In terms
of lifestyle and consumer preferences, researchers
identified four groups of products, and attributed
points to their ownership - from the
indispensables (color TV, refrigerator and washing
machine) to luxuries (computers, private cars).


Many in the Chinese press applied the
Chinese Academy of Social Sciences criteria to the
2000 Chinese census and came up with only 2.8% of
the Chinese population as middle class. So they
started labeling serial shoppers as part of the
"elite culture". In big cities like Shanghai,
Beijing, Guangzhou and Shenzhen, too many malls,
too many cars, too many insurance policies and too
many holiday packages to Europe convey the
impression of a middle-class bubble. That's not
necessarily a bad thing, according to Li Chunling
of the Academy of Social Sciences: they may be few
in relative numbers, but as they make their mark
in big cities like Shanghai and are relentlessly
glorified by the media, "the members of the middle
class considerably influence the rest of the
population with their lifestyle."


The Chinese Business Executive Survey by
Beijing-based CTR Market Research, the leading market
research company in China in four big cities -
Beijing, Shanghai, Guangzhou and Shenzhen - only
reinforced the conclusions by the CAAS research. It
polled 340,000 senior executives, owners of
enterprises and heads of key departments - 41,7% of them,
as expected, are based in Shanghai, 32.2% work
in state-owned enterprises (SOEs) and only 12.5%
in foreign-owned companies. They work 10 hours a
day on average. Apart from Mandarin, English
is their primary language. Significantly, only
5.67% have an annual income of more than 200,000 yuan
($24,390), and only 2.14% an average annual income
of more than 500,000 yuan ($60,975). The average
annual income is 82,000 yuan ($10,000), while the
average annual household income is 130,000 yuan
($15,853). Hardly enough to fill an Armani
shopping bag.

The results also confirm the
CAAS research in the sense that half of the
executives say that advertisements "enhance their
confidence" and influence their choice of brands.
And once they find their favorite brand - which
they want to reflect their social status - around
77% never change their minds, and they recommend
the brand to others.

Xintiandi, the
model unit
Popular housing,
communist-style, was usually referred to as "model
units". Now welcome to the model unit for
superpower China as a mega-shopping mall - but
always under tight political grip, as the Little
Helmsman Deng Xiaoping himself formulated after
his visit to model Singapore in the late 1970s.
Welcome to Xintiandi.

Xintiandi, which
literally means "new earth and sky", is two square
blocks of shikumen - "stone gate" houses
built in the 19th century along long tang,
"narrow alleys". From the 1850s to the 1940s, 60%
of Shanghai was shikumen. In the
shikumen, European townhouse architectural
styles are in fusion with Yangtze River delta
architecture. This translates into splendid
communal living - common walls, courtyards,
attached terraced houses. In 21st century China,
shikumen had to become - what else - a
shopping arcade.

The story of Xintiandi
tells everything one needs to know about the ideal
development model for all of China. Its main
character is 56-year-old Vincent Lo, chairman of
the Hong Kong-based Shui On Group. In Shanghai, as
well as in Beijing, he is rightfully known as "the
king of guanxi". Without guanxi
(connections) nothing gets done in China, as many
a foreign enterprise had to find out at its own
expense.

Lo had his eyes set on
Shanghai in 1984, at a time when Pudong, on the other
side of the Huangpu River, was nothing but rice
fields. In an extraordinary book edited by the
Shanghai People's Fine Arts Publishing House,
amateur photographer Xu Xixian vividly documents
the changes in the city. In a 1983 photo of
Suzhou Creek, we only see a steel bridge, the Soviet
Embassy building and a few barges. In 2004, behind
the bridge, have mushroomed, as if by magic, the
dozens of futuristic towers of glass and steel of
futuristic Pudong.

When Lo got to Shanghai
in the mid-1980s, he built a hotel for the local
Communist Youth League. The hotel opened at the
time of the Tiananmen Square student massacre in
June 1989. The Youth League didn't have the money
to repay loans. Lo stuck with them - and the
gamble paid off, as one of those with long
memories was Han Zheng, the Youth League secretary
who is now the mayor of Shanghai.

It was
only through impeccable guanxi - Zheng, the
current mayor, plus Xu Kuangdi, the former mayor,
with whom he also did business - that Lo finally
got the right to develop Xintiandi: a fabulous
50-hectare sprawl of prime land, including a
two-hectare complex of chic restaurants, bars and
boutiques. The whole project cost $170 million.
Xintiandi even engulfed - also metaphorically -
memorable 76 Xingya Road, the "Memorial Hall for
the Site of the First National Congress of the
Communist Party of China", held in 1921 by Mao
Zedong and his 12 colleagues. As market Leninism
prevails, Mao memorabilia remains dutifully on
sale at the memorial hall shop.


Ideologically, Xintiandi is also crucial
because it is a living embodiment of recently
retired former first comrade and president Jiang
Zemin's doctrine of the Three Represents. The
Three Represents stated that the party could not
only represent workers and peasants anymore - its
traditional Marxist constituencies - but had also
to represent "the interests of the vast majority
of the population", of "advanced productive forces
and "advanced cultural forces". Jiang meant, in
other words, that to remain strong the party had
to become more bourgeois. More middle class. More
"Xintiandized". According to Jiang, "the great
door to Chinese Communist Party membership should
be opened to all advanced elements of the Chinese
people. If we do this we can solidify our party
and we will face no dangers." (The Three
Represents, now enshrined in the Chinese
constitution, says the Communist Party shall
include capitalists and entrepreneurs within the
its ranks, still a source of deep division because
some say it widens the gap between rich and poor.)


Xintiandi is not only a radically designed mall cum
entertainment center appealing to the
Three Represents constituency - with such places as
the Tou Ming Si Kao (TMSK) restaurant, creating
what could be called the post-modern Tang Dynasty
style. As a symbol of the new swinging Shanghai,
Xintiandi is a fabulous marketing tool for the
Shui On Group. Beijing party elders were
delighted, as well as the Shanghai government,
which promptly offered Lo the keys to develop the
rest of the 50 hectares into luxury townhouses,
office buildings and hotels. Shui On made a
killing selling loads of $3,000-per-square-meter
apartments.

The art deco Corporate Avenue
office building is defined in its brochure as "in
step with lifestyle fashion" - a killer mantra
bound to seduce those thousands of executives in
both the Chinese Academy of Social Sciences and
the Crowding the Rim (CTR) Asia-Pacific Research
Center. It features, among other tenants, a
fabulous spa, the BMW Lifestyle boutique and the
Citing Wealth Management Center. Right beside it,
there's 88 Xintiandi, which started its life as an
executive residence, turned out to be too
expensive for the average business traveler and is
now rebranded as a still prohibitively expensive
hotel (one bedroom suite for $328 a night, plus
15% tax).

Xintiandi even spun off its own
Xintiandi Saint Emillion 2000, "hand selected", as
the corporate literature insists, by none other
than Bordeaux luminary Christian Moueix, the
owner, among others, of the Chateau Petrus
vineyard. Inevitably, such a success story like
Xintiandi had to be cloned. The next one, Xihu
Tiandi, will be in Hangzhou, southwest of
Shanghai.

Lo's and Shui On's corporate coup
de grace was to predict that China not only would
be involved in a giant development boom in the
east, also would have to invest massively inland.
Ten years ago - and five years before Beijing
launched its "Go West" campaign - Lo bought his
first cement plant in ultra-polluted Chongqing, in
Sichuan province. Shui On is now one of the top
three cement producers in China. It did not hurt
Lo to invest in faraway Chongqing, just as an old
friend from Shanghai became the city's vice mayor
and another friend, a former minister, became
Chongqing's party secretary. This auspicious
confluence of interests has generated another-
what else - Xintiandi for Chongqing, bigger than
the original in Shanghai. And the next
Xintiandi-bound city will be Wuhan. Deng
Xiaoping's vision was to build a thousand
Singapores in China. He would have been overjoyed
with an additional thousand Xintiandis.


The wrecker's ball

Xintiandi may be unique because redevelopment in this
case is connected to historical protection.
Almost 3,000 families living in this area of the
former French concession had to be relocated. They
seem to have been well compensated. But in
the wrecker's ball that is 21st-century Shanghai,
that's not always the case. Anonymous Shanghainese
confirm that the confluence between local
government and wealthy real estate developers,
local or from the Chinese diaspora, usually holds
no respect for property rights, no proper
compensation for them and no negotiation or due
process. Residents usually learn they are going to
be thrown out by officials from the local council.
They are told they cannot negotiate, are offered
cash or a relocation somewhere to a drab
mini-condo overlooking a viaduct, and given two or
three months to vacate their premises. Families
living in three-story houses may be offered
something like $3,000, the price of one square
meter in a new tower block. It's take it or leave
it.

The case of Zheng Enchong still
resonates in Shanghai. He is a local lawyer who
sued the city on behalf of 500 families that have
been evicted. He lost, and his license was
revoked. Then he was asked to be an adviser in
another suit on behalf of more than 2,000
families. A few days after the case began, he was
arrested in his own apartment by the Public
Security Bureau, accused of fabricating tales of
social unrest to foreign non-governmental
organizations, tried in a closed court and
sentenced to three years in jail.

On the
other side of Xintiandi, across the Huangpu River,
market Leninism at work can be observed in its
full glory at the Shanghai Stock Exchange -
located in the gleaming Pudong financial district,
where 1,600 trading terminals surround a central
trading floor. It's virtually empty. The silence
is almost sepulchral. No wonder. When hundreds of
state-owned enterprises were privatized, Beijing
in each case rarely sold more than a third of the
shares. The Chinese government remains the main
shareholder - and the business community is still
its lackey.

Shanghainese businessmen
insist - or rather pray to Confucius - that the
city's economy will not follow the lead of its
slumbering stock market. They hope that the bubble
of those $3,000-per-square-meter property prices
and of the frenetic Great Wall of shopping will
deflate, inevitably, but gradually. And they bet
on non-stop prosperity, of course, to solve all of
China's problems - such as all those mountain
ranges of bad debts.

As for Shanghai the
city, the Shanghai Landscape Administration Bureau
insists the authorities are now devoting "more
energy to the promotion of a new round of
landscape construction in a three-year action
program", and working hard to "form forestation
networks composed of rings, corridors, gardens as
well as forest". As a result, they say, this "will
make the sky bluer, the ground greener, the water
cleaner and residences more comfortable". Oh, and
the malls fuller, of course.

买房失败后记

After narrowly (or widely, depends how much the winner bid over my
price) escaping from this potential half million debt, I started having
a whole new perspective of the world.

1) Appreciating every freedom I can have now, when I think of the fact
that these days are counted before I will spend half of my income just
to pay for the interest.
2) Spending more thriftly when I recall the hefty 2nd loan cost.
3) Enjoying the closeness of my apartment, when I realize I can't
afford anything within 20 min drive if I were buying instead of renting.

Anyway, the seller's rejection literally gave me a 2nd chance in life.
Let the bubble burst...... let it be 17 month from now...... When I can save enough to buy with a single loan.

Asia Times: China's revolution for everyone and no one

China's revolution for everyone and no one
By Francesco Sisci



The Chinese government, while aware of the problem posed by China's rising Gini
coefficient, still feels it has plenty of time to react. One major reason for
this is the cultural context of Chinese poverty: in China, poverty is shameful
(in contrast to some other societies with many poor people, such as India,
where the poor do not feel shame for their impoverished status per se). In
China, poor people hide away, or are told to do so, and feel a "loss of face"
caused by their condition. This predicament can have two effects: on the
positive side, it creates a drive to move out of poverty, an entrepreneurial
push. And on the negative side, it can create resentment for being left poor,
which can lead in turn to
protests, riots, and even a push for revolutionary change (of course,
the effects of revolutions are not always negative).



There is a very widespread perception that street protests are just the first
step in a continuum that leads inexorably to riots and ultimately revolution.
But this is misleading, because there is a huge qualitative difference between
protests and revolution. Revolution requires more than just an urge to change
things; it needs a direction, where to lead the change. And it is precisely
here - the direction of change - where there is the most confusion, both within
China and without.



Most westerners would like to see a revolution for democracy. But democracy
itself is just procedural; it has no prescription for what kind of government
will emerge from the procedures - there can be liberals and conservatives,
fundamentalists and secularists, democrats and republicans. One of the ideas
gaining ground among the have-nots of China is a form of neo-Maoism. But its
prospects appear weak; after all, Maoists ruled China for 30 years and left
many scars of failure behind. The poor of China are looking for something else,
and many other cults are faring better than the neo-Maoists, such as actual
cults of the Falungong type, or pseudo-Christian groups, like the Taipings of
old.



Also doing quite well are triad-like organizations, which have taken control of
the elections in many villages through a mix of intimidation and corruption,
and often help to organize the "floating workers" who come to Chinese cities to
do manual labor. Hardly any social research is available on the impact of
neo-Maoism, cults or triads, but a random questioning of common workers in
Beijing proves that immigrants are much more familiar with these than with
Western democracy. One could use this fact to argue that if there were a
revolution in China, it would be a cult revolution, a triad coup. This is
hardly farfetched, given that most Chinese dynasties, including the current
"Communist" dynasty, have had cult-like characteristics.



But the overall impression is that Chinese are fed up with revolutions, having
had more than their fair share in the past 160 years. This is especially so
given the highly visible improvements in daily life, social differences
notwithstanding. No matter what is happening in relative terms, in absolute
terms life is getting better. Only 15 years ago, school canteens in central
Beijing provided a protein-poor diet. This is no longer true. In addition,
there is more social mobility now than there has been for centuries; more
possibilities to send children to university or to start up a commercial
venture. Lastly, there is no longer anything resembling the clear-cut "struggle
line" of Marxist cliches: the poor are not against the rich; the proletariat is
not the leading class of society; factory workers are actually opposed to
peasants migrating to cities; and intellectuals all want to either get an
official post or go into business.



In modernizing, urbanizing, marketizing China, if often feels as though
everybody is against everybody - hardly a situation ripe for revolution, but
definitely one where the central government is constantly asked to mediate
among different constituencies: the rich against the poor, the middle class
against everyone else, the center against the provinces, the districts against
the provincial authorities. All these perpetual conflicts require central
government intervention more, not less, than a decade or two ago. In those
days, all was clear: the party leaders had everything, and the rest of the
population was out in the cold. The leaders felt isolated, and thus, at times,
besieged. The social divide was very clear: those who lacked power - students,
workers, farmers - could all potentially unite against those with power - the
officials.



The situation today is much murkier. Now, there are people with power and no
money; people with money and no power; and people with both money and power,
the corrupt. There are the rich, the middle class, the poor in the cities and
the poor in the countryside (who are very different kinds of poor, with
different ambitions). There are students, officials, entrepreneurs ... Overall,
society is growing more complex by the day; while this makes it hard for the
government to hold everything in balance, it also creates a huge new space for
balancing action, a space that did not exist 20 years ago. Then the government
had only to exercise its power, not provide balancing actions between class
interests, which had been artificially leveled.



The greater diversity of society has made it objectively more difficult to try
to start a revolution. Which group would an aspiring revolutionary try to
mobilize, the peasants or the workers? It may be impossible to recruit them
both, because the differences in their interests are too great. It is true some
young intellectuals have been playing with the idea of organizing a peasants'
movement; some have even traveled to villages to mobilize peasants, and some
peasants have gone to cities to seek help from intellectuals. In fact, such
activities have been going on for years, but nothing substantial has ever
materialized, and certainly not just because of the presumed ubiquitous
presence of the Chinese security apparatus. It is because the necessary
preconditions for revolution were not there, and still are not.



Furthermore, the government publicly waving the Gini factor suggests something
else: social differences nowadays are a form of social transparency, while
under Mao, social differences were starker, but hidden. In the Maoist period, a
small group of officials, systematically ranked, starting from the Great
Helmsman himself, who was granted the number one position in the hierarchy,
were accorded clear differences in "daiyu", which became a technical term
indicating the differences in privileges granted. Moneywise, the difference was
minimal, but during this orthodox Communist period, money did not buy anything
anyway. Top leaders had a villa with servants and cooks in every province of
China. These were open and operated 12 months a year, even if their owners
never visited some of them. Ministers had large estates with drivers in
attendance, director generals had cars and telephones - and common people
frequently starved. These privileges were enhanced by mystery: no one could
scrutinize the lives of leaders, who literally lived behind closed walls. The
cars which still speed today through Beijing's streets with tinted windows are
a legacy of that past, when top leaders had huge "red flags" cruising at high
speed through deserted Changanjie, the main road in Beijing. Those differences
were immense compared with the present ones.


But: they were hidden, and now the differences are open. Very commonly, people
who made the same living for years are now economically far apart, one still
with a bicycle, another with a BMW. Part of the idea of harmonious society is
that people have to reconcile themselves with these differences, some of which
are engendered by corruption, but most of which have simply emerged due to the
variable business acumen of different individuals.



It appears that the government remains confident of having the upper hand, that
social changes may actually lend the regime more room to maneuver, and that
greater transparency will in fact improve the government's ability to retain
control. Under these conditions, if the government pushes for greater
liberalization, if it moves towards democratization, it will gain more clout
and consensus - not less. In other words, we could see a future China both more
transparent and liberal, moving towards democratization, and yet with an
increased role, power and influence of the Communist party. This is a paradox
for some observers - unless we stop thinking of the Chinese Communist Party as
"communist".



On the other hand, there is perhaps another aspect to consider. Historically,
all major shocks to the power of the Party came not from some alien opposition,
but from within the party itself. The late Zhao Ziyang, now celebrated as the
demigod of liberalization, was a party secretary, and the leading dissident Bao
Tong was his assistant. Even in the case of Falun Gong, the members who in 1999
organized the sit-down protest outside Zhongnanhai which panicked the
government into repressing the sect, were senior party officials, including a
retired aviation general later sentenced to 13 years in prison.



The situation has not changed since then. The party controls everything, and
there is no social organization, or even a religion or triad group, capable of
challenging it. Triad-like groups may be strong and have solid connections with
some officials and police officers, but their reach does not go beyond their
own province, and often their own city. Even the Catholic Church, which for
decades resisted Communist repression by staying united and loyal to the Pope,
and is closely organized, does not influence the population beyond its own
believers. Furthermore, these groups are in competition with each other;
certainly the Catholics oppose the triads, and different triads compete with
each other, as do different cults in the countryside.



Even if the party were unable to keep each of these organizations under strict
control, which for good reasons or bad it is extremely keen on doing, it would
be hard for any of these organizations to prevail both over the party and over
other, competing organizations. In reality, most of these groups are more than
happy, for various reasons, to live with the party without openly challenging
it. This, then, leaves the millions of protesters isolated. The only
possibility for a major political upheaval comes from a serious power struggle
within the party that breaks out in the open, which was what happened in the
Tiananmen incident or, to a certain degree, with the repression of the Falun
Gong.



Will such an internal power struggle happen any time soon? No outsider can say.
Yet the lesson the party learned from Tiananmen, and from the experience of the
botched Soviet coup against Gorbachev in 1991, was that if internecine
struggles break out in the open, then everybody in the party will lose, and
external forces may even step in and take over. To some extent, knowledge of
this fact preempted major power struggles with the demise of the powerful Yang
Shangkun faction in 1992; digested the arrest of the mighty Beijing party chief
Chen Xitong in 1995; and made it possible for National People's Congress
chairman Qiao Shi to leave power in 1997, opening the way for Jiang Zemin.


Even during the Falun Gong crackdown, when many retired senior party officials
were sympathetic to the organization, the party mustered all its strength and
brought everybody back in line, without massive, open clashes. From all these
events, the party has learned a lot; it may even have also learned that the
real threat may come from within its ranks, not from even millions of people in
the streets of Chinese cities.


Francesco Sisci, based in Beijing, is Asia Editor for the daily La
Stampa.

Asia Times: Is China headed for a social 'red alert'?

China Business      Oct 20, 2005

Is China headed for a social 'red alert'? By Francesco Sisci BEIJING - Economic inequality and social protests in China have become a frequent topic in the Western press. The startling figure of 74,000 protests across China in 2004, up from 58,000 the previous year, has popped up in many newspapers, as has China's most recent Gini coefficient of 0.45, suggesting that economic inequality in China has in fact surpassed that of the US and UK with their allegedly cold-blooded "Anglo-Saxon" model of capitalism. (The Gini coefficient, a measure of inequality developed by the Italian statistician Corrado Gini, is a measure of income inequality ranging between 0 and 1, where 0 corresponds to a society where everyone has exactly the same income, and 1 corresponds to a society where one person has all the income and everyone else has none.) Eyeing such statistics, one might be tempted to think that Chinese society is falling apart, and indeed, various books and articles have appeared suggesting exactly that. However, as with many things in China, first impressions can be misleading. The 0.45 figure was published by the official People's Daily, which described it as a "yellow alert", and asserted that if things go on like this China will reach the "red alert" level in five years. [1] Using similar logic, one might extrapolate the protest figures to suggest that if social protests grow as rapidly as the Gini coefficient has, there could be over 80,000 this year, more than 100,000 in a year or two, and so on, endangering the social fabric of China within the next five years, when the Gini coefficient will have reached and passed the "red alert" level. The aforementioned figures seem to find confirmation in other numbers more readily available: 66% of all total bank deposits belong to 10% of the population, with 20% of the population holding 80% of total deposits. Peasants, the majority of China's population, make under US$300 a year, while people in Shanghai, the richest city in China, earn over $4,000 a year. [2] China's coastal region, home to some 300 million people, produces about 70% of China's GDP. If we compare these numbers, it becomes clear that we are talking about the same group: 20% of the population amounts to about 260 million people, roughly the population of the coastal region, and the ten percent holding 66% of total deposits are the 130 million affluent people living in eastern coastal cities. The rest of the country has been left behind. The Asian Wall Street Journal, in a recent editorial, warned against curtailing economic reforms based on these numbers. [3] "It is almost axiomatic that during periods of high growth, some will improve their lots at a higher rate than others," said the Journal, which underscored that China's reform process has already achieved the greatest sustained poverty reduction in the recorded history of the world. By World Bank estimates, China had 29 million absolute poor in 2001, compared to 80 million in 1993 and 250 million in 1979, when the economic reforms started. This feat dwarfed the growth of the Gini coefficient in the same period. In 1980, after one year of reforms, it was 0.33; in 1992, when the late Communist Party leader Deng Xiaoping again promoted reforms after his famed "southern trip" in the wake of the Tiananmen crackdown, it was 0.37, and in 2003, when further reform measures were introduced according to China's WTO commitments, it was 0.4. Therefore, it would be misguided to say that protests and the income gap are simply going to push China over the edge, that the days of the Chinese boom are numbered and will be followed by a 1920s-China sequel - renewed civil war and warlordism, with the next dynasty struggling to establish itself from the wreckage of the old regime. It is important to note that the Chinese leadership is indeed concerned by these facts - we know them because official Chinese media, toeing the party line, published them; otherwise we would never have known. So the question we should be asking is: why does the regime want people to know about the inequality problem? It is not that the figures would have been available anyway, or that social instability has grown so much that it can no longer be hidden: in the universe of China, much occurs that goes unnoticed by the rest of the world. Even the best foreign intelligence might manage to gather a burst of sporadic events, but it could never authoritatively draw a vast picture of tens of thousands of protests all over the country, let alone then authoritatively feed it to the international press and make them believe it. If the Chinese didn't tell us we would never know of so many protests. But the publication of the data is hardly an indication that Chinese leaders have grown more transparent overnight. The actual message is different. The Chinese regime is telling us there are more protests and a higher wealth gap because it is confident it has the situation under control, and it believes that these events cannot rock the boat, either now or in the coming five years. There are several reasons to interpret the protest figures cautiously. For one, the 74,000 figure is only for demonstrations involving over 100 people; the innumerable small gatherings of a handful of people outside the local government office are not included. If the government, at any level, had to confront and repress violently these protests, there would not be enough police in China to rein in the riots, which would spawn other, bigger riots. In reality, protesters are usually bought off easily: money is spread around, requests are granted, and people are appeased. These tactics create a virtuous circle (or a vicious one according to the viewpoint): protests yield money and thus yield more protests. Of course a peaceful result is not guaranteed; in some cases, police are called in, they break some heads, and organizers are spotted and arrested. In early October, the state-run media noted that so far this year some 1,826 police had been harmed, and 23 killed, trying to handle riots. By official accounting, then, the total number of police casualties was about 1 for every 35 protests. If this reasoning is valid, we can infer that a violent outcome, with a fierce confrontation, is not the rule. In other words China has learned that protests can be handled peacefully - this might be one major reason why the government feels confident in handing out the figures. The other reason for telling China and the world these stories is to create the consensus needed to promote the idea of a "harmonious society", a new political slogan of the new leadership. "Harmonious society" is not a simple political slogan dusted off from Confucian times; it in fact underlies the economic effort to spread wealth to the interior and boost domestic consumption, two crucial challenges for China in the next few years. Mr Wang Jian, from the State Development and Reform Commission (SDRC), China's main economic planning body, points out that the eastern regions of China are in a conundrum: they need more land to build houses and factories, yet this is prime fertile land, used to produce grain. [4] Less land for agriculture in China will create, in the long run, pressure on the world grain market. The same was true also in Japan at the time of rapid industrialization, explains Wang Jian, yet the size of the Chinese population is much bigger than that of Japan. "There is not enough grain in the world market to feed the Chinese population," concludes Wang. This may actually not be true - important grain exporters like the US, Canada, Australia and Argentina have plenty of slack capacity at the moment, in fact, the US and EU are literally paying farmers to underproduce - but Wang's comment does reveal a deep sense that China should handle grain differently from the way it has handled, say, oil, where it has a growing dependency on imports. Incidentally, the issue of land requisition for industrial purposes and disagreements about compensation are the most important reasons for the recent protests. The issue is very complicated because if industry pays too much, it would reduce the incentive for industrial development, and local governments have no money to make up the difference to the peasants whose land has been taken. "Local governments have few sources of revenue to finance physical infrastructure and social expenditure," writes World Bank economist David Dollar, explaining some of the reasons why Chinese peasants have low compensation for their land requisition. [5] Opening the west as a solution The problem of limited fertile land has been made more acute by fast-growing pollution, which wastes both water and land. Wang Jian, who in the mid-1980s was the first advocate of economic development along the coasts, now urges a more careful use of land. It is also important to try to open up the western and central areas, where there is plenty of land and almost 1 billion people. Unfortunately, the idea of developing the west has been around for almost a decade but so far has produced little. But the effort goes on. China is said to be considering the creation of new cities along the Yangtze river, and possibly even along the canals that will soon criss-cross the country bringing water from southern to northern China for the gigantic South-North water diversion project. This process could go further west; for example, the government might attempt to move population and industries to Qinghai, a province as large as Western Europe with a population of just 5 million. However, there are many problems associated with this kind of large-scale shift, and political sensitivities are not last on the list. The government is worried about how the international community would regard what could be viewed as a massive invasion of Qinghai - once part of historic Tibet - by Han Chinese. Unquestionably, bringing wealth, development, production, and cities to the western regions is one of China's biggest long-term challenges. Success could create a kind of 'west coast' of China, a shore for trade and development with Central Asian states that could help bring stability and welfare to that region, where Islamic fundamentalism could otherwise become dominant. To achieve this goal, China must learn to cope better with the international community, suspicious of the Han invasion of areas inhabited by ethnic minorities; the ethnic minorities themselves, resentful of the Han settlers; and Muslims and local central Asian people, fearful of Chinese domination of Central Asia. These are large, long-term issues that any government of China, democratic or not, will have to confront. But if the Chinese government were democratic - one head one vote - it could well be more difficult than it is today to hold the hundreds of millions of peasants crowded in Henan, Hebei, Hunan and Hubei from storming the deserted west, just as American pioneers swarmed through the thinly populated prairies of the American West in the 19th century. In a time of fast growth with many poor people fighting for their chance to wealth and climbing up the ladder of success, it would seem axiomatic to lend a hand to signor Gini and his coefficient of economic equality and social stability by quickly opening up the west to fast "colonization" from the east. This move could immediately relieve social pressure by providing a chance and a "go west" dream for millions of peasants. Notes [1] People's Daily, English edition, September 21, 2005, Party school journal warns against China's widening income gap . [2] So defined not necessarily by their trade but by their living quarters, thus they should be considered people living in the countryside. [3] AWSJ, September 23, 2005, "Letting the Gini Out of the Bottle". [4] Wang Jian "Guanyu jianshe jieyuexing shehuide san dian sikao" , internal document of the China Study Society for Macroeconomics, 6th issue, 2005. [5] David Dollar "China's Economic Problems (and Ours)", The Milken Institute Review, third quarter 2005.

Bet on the house market without losing half a million

Brits lay odds on Chicago's house prices

http://www.chicagotribune.com/classified/realestate/realestate/chi-0509250464sep25,1,5185442.column?coll=chi-navrailbusiness-nav&ctrack=1&cset=true


Chicago Tribune.  Published September 25, 2005

In the online betting world, gamblers can lay their
money down on everything from the fifth race at Belmont to the Little
League World Series.

Now they can bet on -- or against -- the housing market.

Pinnaclesports.com, a British odds-maker, has rolled out betting options for U.S. median housing prices.

Gamblers can roll the dice on whether third-quarter home prices in
Chicago or a handful of other metro areas will surpass or sink below
where the Web site's oddsmakers see them going. (The gambling site is
betting that the median home price in Chicago will hit $268,000 at the
end of September, up from $263,600 at the end of June, based on figures
from the National Association of Realtors.)

"With all the talk
there's been about home prices, it just seemed like a natural to offer
it," said Pinnaclesports UK CEO Simon Noble in a telephone interview.

"Early signs are that there appears to be an East-West divide. In
California, people believe that the house market is stagnating or even
falling. On the East Coast, they think it's going to continue to rise."

In the spirit of due diligence, I must point out that the Illinois
attorney general's office tells me that such wagering is not legal
here. And if you go looking for the site, you might not even find the
housing category in question -- the bookmaker tends to introduce and
then abruptly remove these novelty bets (it previously made book on
where gas prices would level off) with some unpredictability.

If you've concluded, as I have, that predicting the housing market is
next to impossible, there's this: The site also is taking bets on
whether it will snow in Milwaukee on Christmas Day.

The fat of the land

If you choose to live in a way-out suburban subdivision, are you more
likely to get fat? A number of planners, health officials and others
have complained in recent years that sprawl discourages walking and,
therefore, encourages obesity.

But two researchers from Oregon
State University looked at the relationship between sprawl and
neighborhood choice, based on residents' weight. They concluded there's
no real connection between living in the boonies and becoming
overweight. Rather, they determined that fit people choose to live in
neighborhoods that allow them to walk to work or to shop, and fat
people prefer places where they need a car.

In other words, for
people who are overweight and sedentary, walking may not be high on
their housing must-have list, so they don't gravitate toward areas
where it's a principal activity, the researchers said.

Press 1 for more options

In what might be the real estate equivalent of wearing a Mickey Mouse
watch, now you can have Donald Trump ring tones on your mobile phone.

Warner Music Group has signed a licensing agreement with Trump and has
secured agreements with Cingular Wireless, T-Mobil and Spring Nextel to
offer Trump accoutrements to their wireless phone customers.

For example, when you get a call, instead of hearing a ring, you could
hear the real estate mogul's voice announcing: "Why not answer your
phone, you could be missing out on some really big business."

Or, for those with a more sentimental bent: "What are you going to do, listen to me all day?"

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Hear Mary Umberger on WBBM Newsradio 780 at 6:21 p.m. and 10:22 p.m.
each Thursday and Friday and 7:20 a.m. each Saturday and Sunday.

mumberger@tribune.com