I agree that moral hazard is the worst thing that the economy has to face.
moral hazard has always been with us in the 20th and 21st century.
Rockfeller's Standard Oil's hostile M&A and market monopoly was perhaps the first famous act of moral hazard that effected the econmoy and the stock market.
Sherman Act of 1890 was the groundstone for Fair Trade Comittee that enforced laws to rightfully organize the market harmed by Standard Oil and US Steel. Clayton Act of 1910s followed and US has been fighting against moral hazard ever since, FTC's power most enhanced when it decided to split AT&T, the largest company in the world for series of the years at the decision time, decades ago.
Enron accounting fraud 2001 pulled Enron down from the most admired company for many consecutive years to bankrupcy. Enron's moral hazard was heavily punished, sentencing ones behind the fraud more than 100 years in the prison. Mass media followed the criticism and the whole country got together to punish and self-reflect the moral hazard.
Recent moral hazard happened two years ago. Subprime Mortgage Crisis that effected the whole world economy for once and for all. For instance, grades in universities in Korea became important only a few years ago, when the air in society changed and jobless problem became big due to the economy depression that started from US. It happened to directly affect me too. I used to dream of becoming an investment banker, but the crisis made me reconsider the situation.
consider NBC's In America Today's Lehman brothers, the next Enron
link: http://www.youtube.com/watch?v=9IRqwhxlarU
Bankers and Investors behind the derivative products knew that something wasn't right and should be stopped. However, they chose not to and started sending hot potato to other financial firms continuosly making derivative products out of credit that did not exist. Insurance companies, IBs, commercial banks, consulting firms, securities companies, all did not stop to rightfully admit that they cannot gain profit from nothing. Instead, they just took a part of the festival and thought that bigger it got, the harder it would be to be destroyed. Amazing moral hazard. Worldclass moral hazard.
Largest US bank, bank of America might've gone bankrupt if it hadn't been for public fund that is of course, the taxes of US citizen.
Question.
When the profit's made, stockholders share the profit. When loss is severe, public fund is rent to cover the loss. The proletarian class is helping the loss of the leisure class. The gap between the rich and poor is increasing to the level never seen before, but why aren't the rich noble enough to accept the consequences of their choice? Is it not a giantic moral hazard? What's wrong with our system?
The diffence between Enron and Subprime is that in Enron, moral hazard was that of only a few, but in subprime, everyone took a part in the big fraud. Everyone could not be punished and US government had to formulate trillion dollar worth of fund to stop the country from going moratorium.
Subprime was not an accident. One of the biggest crime that was commited to the 'world' citizen.
2010년 11월 29일 월요일
2010년 11월 17일 수요일
Mr. Hitch
[i wonder if it is an argumentative post]
I am watching Mr. Hitch on the IPTV right now. about halfway through the movie, but i am familiar with the plot, because i've seen it in the movies before. then, it hit me. how should a guy ask a girl out?
Personally, i think straight forward is good. That's because i believe that 'only the brave can have beauty'. why? That's because a perfect girl usually have someone she's seeing and if perhaps she is free, you should not miss the chance. Of course you should not rush and make sure that you give her enough room to have a good look at the relationship she might get involved in. Also, don't forget that you have to listen and understand what she has to say. Showing your interest to her do much better than making her have interest to you.
Going back to Mr. Hitch, he loses his great confidence as soon as he falls in love. And that's the point where the woman starts to open her heart to Mr.Hitch. Clever movements, nice looks, sweet talks all did not do as good as honest himself.
which one do you favor?
ps. You really should watch Mr.Hitch.
Where he gets food allergy and shouts for more Benadryl is hilarious. And, he is carrying a bottle of benadryl with a straw too^----^.
Personally, i think straight forward is good. That's because i believe that 'only the brave can have beauty'. why? That's because a perfect girl usually have someone she's seeing and if perhaps she is free, you should not miss the chance. Of course you should not rush and make sure that you give her enough room to have a good look at the relationship she might get involved in. Also, don't forget that you have to listen and understand what she has to say. Showing your interest to her do much better than making her have interest to you.
Going back to Mr. Hitch, he loses his great confidence as soon as he falls in love. And that's the point where the woman starts to open her heart to Mr.Hitch. Clever movements, nice looks, sweet talks all did not do as good as honest himself.
which one do you favor?
ps. You really should watch Mr.Hitch.
Where he gets food allergy and shouts for more Benadryl is hilarious. And, he is carrying a bottle of benadryl with a straw too^----^.
2010년 11월 15일 월요일
Yuan Revaluation, another Plaza Agreement?
G20 Summit, Last Thurs/Friday was hot on Coex. The subjects handled can be abstracted into a 'battle' between the developed and developing countries. More specifically between the G2, US and China. The main topics were the currency rate and regulating the trade surplus/deficit. namely, US argued that the trade surplus/deficit should be controlled in the +-4% range. Trade surplus/deficit regulation was postponed to the next summit(China reached 20% years agos and still ranges around 9%), but the currency rate revaluation is still hot.
To be honest, a country offering another to adjust currency rate is absolutely outrageous. Currency exchange rate directly affects the book value of products and therefore has huge impact on the gross profit of the trade. Recall the subprime mortagage crisis two years ago and the suffer of the countries(citizens too, of course) due to the currency rate was very obvious. Korea and Asian countries that suffered IMF crisis 1998, faced amazingly painful economic depression due to the dropping currency exchange rate. There are stories of the Korean diplomats who had to carry dollar bills in the pockets of their coats to Bank of Korea(they could take large bills from a country to Korea, because they were diplomats and therefore extraterritoriality).
Currency rate directly affects a country's well-being as a whole. Japan used to rule the world economy in the 80s and threatened US's #1 place in the economy. Japanese flourishing funds started buy American soil including the Rockepeller center. However, when Plaza Agreement took effect and the value of Yen was appreciated to a double value, everything changed. Export of Japanese goods started to drop harshly and Japanese companies had to resell American real estates at a less than half the value they bought due to the changed exchange rate and the lack of fund in the Japanese homeland.
Afterwards, Japan started an amazingly long era of recession. (Still recovering)
America is asking China to repeat what Japan did decades ago. (This time, China bought American bond instead of the real estates) Really, even the stupid know that the economy is important(Bill Clinton said this).
The majority of the countries do not agree on a currency revaluation, not to mention believing that it is fair.
Former assistant secretary of Ministry of Finance and Economy of Korean government who I am currently taking a course of, mentioned that this is only a power game. In the cold war era, it was military, now it has changed to the economy.
The fact that America can suggest this kind of subject show what a super power that US has in the 21st century. Such that no countries in the prior history ever had. Nevertheless, I cannot stop thinking that US's movement was very naive and somewhat desperate.
To be honest, a country offering another to adjust currency rate is absolutely outrageous. Currency exchange rate directly affects the book value of products and therefore has huge impact on the gross profit of the trade. Recall the subprime mortagage crisis two years ago and the suffer of the countries(citizens too, of course) due to the currency rate was very obvious. Korea and Asian countries that suffered IMF crisis 1998, faced amazingly painful economic depression due to the dropping currency exchange rate. There are stories of the Korean diplomats who had to carry dollar bills in the pockets of their coats to Bank of Korea(they could take large bills from a country to Korea, because they were diplomats and therefore extraterritoriality).
Currency rate directly affects a country's well-being as a whole. Japan used to rule the world economy in the 80s and threatened US's #1 place in the economy. Japanese flourishing funds started buy American soil including the Rockepeller center. However, when Plaza Agreement took effect and the value of Yen was appreciated to a double value, everything changed. Export of Japanese goods started to drop harshly and Japanese companies had to resell American real estates at a less than half the value they bought due to the changed exchange rate and the lack of fund in the Japanese homeland.
Afterwards, Japan started an amazingly long era of recession. (Still recovering)
America is asking China to repeat what Japan did decades ago. (This time, China bought American bond instead of the real estates) Really, even the stupid know that the economy is important(Bill Clinton said this).
The majority of the countries do not agree on a currency revaluation, not to mention believing that it is fair.
Former assistant secretary of Ministry of Finance and Economy of Korean government who I am currently taking a course of, mentioned that this is only a power game. In the cold war era, it was military, now it has changed to the economy.
The fact that America can suggest this kind of subject show what a super power that US has in the 21st century. Such that no countries in the prior history ever had. Nevertheless, I cannot stop thinking that US's movement was very naive and somewhat desperate.
2010년 11월 3일 수요일
scientist
Music has always been a large part of my life. I played flute and participated in the Washington DC youth orchestra for a year i was in the states(i was 12). I was in the hiphop crew during my middle and high school years in Korea. In college, I was in a rock band and played drum. Karaoke is the last and almost the main part that concludes my friends gathering.
Ungratefully, my ipods(classic 80g and nano 1g) slept in the drawer for some time rescently. what was the matter? i can't really point at the reason, but the closest answer would be that i was caught up by the life. yes, like everybody living in 21st century is, busy. music's too slow and even annoying for busy person who can't spare 5 minutes to give someone's beautiful poem and well coordinated beats some attention.
It was a single song that brought me back to the music. Coldplay - scientist. i came across the song that was played automatically on a blog of an annoymous during a research.
last weekend in seoul, i went out early for an appointment, picked up a carmomile blend tea and sat on a busy subway station with headphone that played scientist again and again. during the hour, it was as if the time had stopped and felt absolutely, amazingly relaxing. everyone rushing. me stopping.
materialism, plastic surgeries, boutique cosmetics, luxury purses, girl groups,,,, but less love, less kiss.
if you reach the top place that you longed for, would you be satisfied? was cinderella uncomparably happy? maybe we are merely a target. for the markeing companies. and wasting our precious feelings on the attractive themes companies spread out. instead of significant people around us.
how do you feel listening to chris martin who is married to Pepper Potts(someone that any man would do anything just to talk, or is it just me?^^) sing "oh take me back to the start"
wouldn't it be a miracle to have busy people in the subway station on the kill-hills say"i'm going back to the start".
really, there's no taking back the time, but you can surely go back to the start. start from now, this present time. it's simple, easy, and every single child do that, even today.
conclusion: life's good. seize it!
maybe you can take afive minute break with the song^^
oh, yes the name of the band i played in is carpe diem
http://www.youtube.com/watch?v=tmjPrdTNxQ0
Ungratefully, my ipods(classic 80g and nano 1g) slept in the drawer for some time rescently. what was the matter? i can't really point at the reason, but the closest answer would be that i was caught up by the life. yes, like everybody living in 21st century is, busy. music's too slow and even annoying for busy person who can't spare 5 minutes to give someone's beautiful poem and well coordinated beats some attention.
It was a single song that brought me back to the music. Coldplay - scientist. i came across the song that was played automatically on a blog of an annoymous during a research.
last weekend in seoul, i went out early for an appointment, picked up a carmomile blend tea and sat on a busy subway station with headphone that played scientist again and again. during the hour, it was as if the time had stopped and felt absolutely, amazingly relaxing. everyone rushing. me stopping.
materialism, plastic surgeries, boutique cosmetics, luxury purses, girl groups,,,, but less love, less kiss.
if you reach the top place that you longed for, would you be satisfied? was cinderella uncomparably happy? maybe we are merely a target. for the markeing companies. and wasting our precious feelings on the attractive themes companies spread out. instead of significant people around us.
how do you feel listening to chris martin who is married to Pepper Potts(someone that any man would do anything just to talk, or is it just me?^^) sing "oh take me back to the start"
wouldn't it be a miracle to have busy people in the subway station on the kill-hills say"i'm going back to the start".
really, there's no taking back the time, but you can surely go back to the start. start from now, this present time. it's simple, easy, and every single child do that, even today.
oh, yes the name of the band i played in is carpe diem
http://www.youtube.com/watch?v=tmjPrdTNxQ0
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