Why smart people did such blatant stupid things?

We are talking about David Sokol, the heir apparent to Mr. Buffet's empire Berkshire Hathaway. So he bought shares of Lubrizol and then recommended the company to Mr. Buffet for consideration. No matter how you slice and dice the issue, it is just blatant stupid in every aspect. Warren Buffet tried to save face by getting half (or maybe 90%) of facts out fast was another insult to our intelligent. I am truly disappointed this time.

Well, if you live long enough and you care too much about the legacy, you are going to end up doing stupid things that you would never do.

So why Mr. Sokol did it? Yes he profit around 3 million with his purchase. Was 3 million worth the CEO jobs he hold, the reputation he has build for his whole life so far, given that 3 million probably doesn't mount to too much for him? Are WSJ reporters and national tabloids' reporter going to dig up everything about him?

I'm not talking celebrity, vanity, CBS. I'm talking about when you're nearer the end of your life than the beginning. Now, what do you think you think about then? The future? In the future I'm going to do this? Become that? What future? No. What you think is "How will I be regarded in the end?" After I'm gone. Now, along the way I suppose I made some minor impact. I did Iran-Gate and the Ayatollah, Malcolm X, Martin Luther King, Saddam, Sadat, etcetera, etcetera. I showed them thieves in suits. I've spent a lifetime building all that. But history only remembers most what you did last. And should that be fronting a segment that allowed a tobacco giant to crash this network? Does it give someone at my time of life pause? Yeah. -- Mike Wallace, from "The Insider"

Which country is more open?

Today at the sunday worship, a visit pastor Stephen Tong from Indonesia gave us a very good and inspiring sermon. At the very beginning he shared with us some photos of his church the Messiah Cathedral in Jakarta, Indonesia (which includes a 4600-capacity auditorium and it was completed in 2008, we were told), and talked a bit of details on the church interior, and how long it took to get the permit (a 16 years effort). Here is the fact: Indonesia is the country with the largest Muslim population. But their government eventually came through and approved the building permit. It is a magnificent building. The insider is even better, it even has one of the best concert hall in the world!!! You may still remember all the up-roaring and complaints that were filed against Muslim buildings near the ground zero in NYC, and in other places, (not to mention the burning just happened).  Now, let's put these into context and we should ask the question: which country is more open and tolerant? USA, or Indonesia?

As a Chinese, I also dream a day that a as wonderful Christian church building would be build somewhere in China. A building is more than a million words.

Remember, always give your best. Never get discouraged. Never be petty. Always remember, others may hate you. But those who hate you don't win unless you hate them. And then you destroy yourself. -- Nixon

The Big Short, or big shock

I just finished the The Big Short by Michael Lewis (of the Liar's Poker  fame). He seemed to paint a picture that because the top guys at the top wall street firms didn't know what they were doing (or what their traders were doing, or what exactly were those alphabetical soups financial vehicles, or understand how to manage risk etc) that cause the subprime crisis. 

I enjoyed reading the story (or stories) told in the book and treat them as folklores. But I disagree with his conclusion. I would just give one example LTCM (When Genius Failed). LTCM people were top guys, they had Nobel prize winners, they had super models, they were partners, and they certainly have their own money in the game yet LTCM failed spectacularly. 

Financial crisises were just financial markets' own making that was inevitable, given the financial market's logic, in the sense that you could possibly create a computer program to model the financial markets and given a initial push, the model would create all these financial crisises we been through: the internet bubble, the subprime bubble, the saving and loan crisis.

Could peer pressure play a role as well, in witness of all the major wall street firms double downed on the subprime markets almost at the same time?

In hindsight everything looks so obvious, clear, and easy. Michel Burry's investors, even with his clear explanation,  all tried to get out his fund which almost killed his CDS trades.  He was lucky that he found some bylaw in his fund contract to allow him to side pocketed his trades thus prevent his investor from pulling money out. Julian Robertson wasn't so lucky with his Tiger Fund in the earlier of 2000 decade.

Anyway, Big Short was a good reading, and gave you one angle of the story that is still unfolding before us. We don't know yet when we will come out of it.

Tax not done yet, sigh!!!

As I mentioned in the previous blog, my wife is doing the tax this year with some help from me. We have spent about 5 hours -- one hour per night whenever we have time. And we just finished the Federal return part. We were checking every instruction to make sure we understand the tax code and try to get as much return back as possible. The tax code is really broken in this country. We shall see if Mr. Obama is able to do anything about it, to close all the loopholes and to close all the exemptions.

As for this year, I just hope we could get the NY and NJ state return done in another 3 to 4 hours, and then file them away.

Washable iPod Touch?

A friend of mine told me this story. His younger son left his iPod Touch inside his Jean pocket one day. Oh, you guess what happened next? Yea, that is right. The Jean went in to the wash machine for a full cycle of soaking and cleaning. And it turned deadly dark upon its exit from its water fun. So my friend took it to the Apple store to see if he could get a exchange. Lo and behold, the Genius bar people just plug it in to the "hole" to give it a final try, and the darn thing dared to come to life.

Wow. My friend himself is a Microsoft guy, but boy he is impressed with the build quality of Apple's iPod touch. He knew me is sort of a Apple fanboy and told me the story to feed my admiration for Apple and SJ.

UN's resolution on Libya

Ever late to the game, UN's resolution against Libya "shocked" me. UN security council's credibility has suffered big hit in the past decades as it failed to act on the Rwanda, Bosnia, Kosovo, Afghanistan etc. I am surprised to see UN finally was able to make a move this time given China and Russia's huge interest in Libya. Is this vote signal a paradigm change in UN security council? Would Iran now stop its nuclear weapon program? I bet Gaddafi was surprised by this resolution. He probably wish that UN security council has passed this resolution a week ago so that he didn't launch his attack campaign on rebel and gave himself a safe exit strategy. We will see if he could still exit without a bruise.

Then I learned both China and  Russia abstained from the resolution vote. And on Monday they both criticized ally's missile attack on Gaddafi. Come on, really, guys, you meant you cannot foresee what is going to happen once the UN resolution passed? I think UN security council should have a rule that if a country abstains too many times from a resolution vote they should waive their voting right for a year or so.

I am wondering what concession China and Russia got from abstaining from the vote.