A lehman brothers deal

So, would you still market your product using the 'lehman brothers' brand?

Don't peak yet, think.

The sentiment on property market in Hong Kong has turned, and property investors are eager to offload their investments. But how do you make your ads stand out from the crowd?

You call it a "lehman brothers deal". This branding strategy is cited from some creative sales ads in Hong Kong - see picture below. If that is not enough, we also have some 'financial crisis deal' to go along.

How did Mortgage-Backed Securities bring down the Investment Banks

So I have been thinking about this question: given that Mortgage-Backed Securities (MBS) are risky investments, but once they are securitized and sold to investors, they are off the balance sheet of the investment banks, so why would the subprime fallouts bring down these investment banks.

I have tried to ask around, but none seem able to give me a satisfied answer. Articles from newspaper had always skipped on the mechanics, most of them offers nothing more than the old “investment banks have lost a lot of money from these MBSs, therefore they are in trouble”. But why are they in trouble if they have securitized these assets and sold them off?

After some research, I have come up with some hypothesis, and this is what I think: the investment banks buy mortgages from the mortgage underwriters, these mortgages are then pooled together before they are separated into various trenches. Each trend has a level of risk and coupon rate, much like senior debt versus junior debt, where senior debt is less risky but offers a lower yield. So the ibanks resell these mortgages of various trenches.

Now, ibanks retain some of these mortgages, and as it turned out, they retained the ones in the lower trench – the ones that are the riskiest but with highest yield.

In an up market (like 2006 and 2007), most of the MBSs performed and the lower trench MBSs were the most profitable, that is why ibanks earned some record profits in 2007. However, as the market begins its downturn, some of these mortgages defaulted, and the MBSs in the lower trench were the first one to hit. So follows the problems with the ibanks.

If you have another view, or that mine is simply off the mark, I will be happy to learn from you. But please remember to explain the mechanics in layman terms.

Spoiled Asian Flyers

It was an interesting read on today's SCMP column, of an interview on Tony Tyler, CEO of Cathay Pacific Airlines.

Some passenger was also interviewed and he shared his experience with Cathay:

"...Others say that faltering cabin crew morale is having a divisive impact. 'On a good day, Cathay is still the best in the world', judges another frequent flier, 'but you can't be sure of a good day. I travel ecnomy because business is tooexpensive. On one outbound flight recently, I felt like royalty, the crew were superb. The inflight manager, whom I had never met before, talked to me at length even though the flight was full. All the crew greeted me by name, made sure I got Perrier with lemon, my meal choice, little things that don't cost anything except professional effort, wonder, Cathay is the best."

"On the return sector, it was the exact, dismal opposite. I was carrying some flowers. The inflight manager commented as I got on board, 'Nice; are they for me?' That was the last I saw of her"

"No one offered to put the flowers in the chiller, as good Cathay or a Japanese airline would have done automatically. The service was mediocre, and the crew spent time in the galley chatting about what to do on their layover..."

So as I read the 'bad' service this passenger saw on his return flight, I thought, hey, that is 'good service' on a Air Canada flight.

green bean and red bean

So are you a Ron Artest fan? I am not. But he is definitely entertaining...in a bad way.

The link below is Ron's response when asked about Josh Howard's controversy - Josh Howard was filmed disrespecting the US national anthem. Mr. Artest's response, and you gotta like this, is "I think Josh Howard's comment is a reflection on education...".

http://sports.yahoo.com/nba/blog/ball_dont_lie/post/Ron-Artest-weighs-in-on-the-Josh-Howard-controv;_ylt=AkakI74v_mz1FVbGuyvkfhm8vLYF?urn=nba,108744

Reflection of education? And this is from Ron Artest? Are you kidding me? Is it the same reflection of education when Ron went in to the fans and started the biggest fans-versus-athletes brawl in NBA history on the night of 22 Nov 2004?

Management Profile

check out the picture below, this is the management profile page I found from Evergrande Real Estate Group's company website (恒大地產集團) - http://www.gzhengda.com.cn/cn/big5/group/group.aspx.

Ok, if you don't read Chinese, then let me translate (or the picture is just small, then I am sorry, so let me translate anyways). 在讀 means "working on", so 碩士在讀 means "working on a Master Degree". So simple counting has 4 of the 10 executives working on some Master Degree.

So what you say? Well, it is the first time I see a company has 40% of their executives working towards some advance degree all at the same time. Second of all, they actually advertise it. I guess they can't wait to tell us until those degrees were actually granted.

So who said putting "working towards a CFA certification" on your resume is unprofessional, or even unethical?