Elliott Ng

I’ll be headed to China tomorrow and staying there until November 19.   My work at UpTake has caused me to be terribly out of touch with many of the people that I met with and worked with in China prior to getting involved in UpTake.  So I wrote a quick update on myself at CN Reviews.

More details on my China trip and itinerary are on CN Reviews.  The exact travel dates are on that post, so if you’re in China at the same time and want to meet up, contact me and lets see if we can make it happen!

I provide a short update on what I’ve been up to at that post.  I also wrote a longer update at my new VisualCV, an online resume product that I’m testing out because of their partnership with The China Business Network, which I’m informally advising.

Via niubi on Twitter I discovered an excellent post from John Maudin’s Thoughts from the Frontline entitled “Who’s Afraid of the Big, Bad Bailout?” (credit: John@FrontlineThoughts.com).  You need to sign up for his newsletter to see the entire article but it is well worth the read.  Here’s an except that helps to explain the whole credit crisis and how subprime mortgages, RMBS, CDOs, and credit default swaps (CDS) all fit together:

Dear Joe,

I understand your reluctance to vote for a bill that 90% of the people who voted for you are against. That is generally not good politics. They don’t understand why taxpayers should spend $700 billion to bail out rich guys on Wall Street who are now in trouble. And if I only got my information from local papers and news sources, I would probably agree. But the media (apart from CNBC) has simply not gotten this story right. It is not just a crisis on Wall Street. Left unchecked, this will morph within a few weeks to a crisis on Main Street. What I want to do is describe the nature of the crisis, how this problem will come home to your district, and what has to be done to avert a true, full-blown depression, where the ultimate cost will be far higher to the taxpayers than $700 billion. And let me say that my mail is not running at 10 to 1 against, but it is really high. I am probably going to make a lot of my regular readers mad, but they need to hear what is really happening on the front lines of the financial world.

First, let’s stop calling this a bailout plan. It is not. It is an economic stabilization plan. Run properly, it might even make the taxpayers some money. If it is not enacted very soon (Monday would be fine), the losses to businesses and investors and homeowners all over the US (and the world) will be enormous. Unemployment will jump to rates approaching 10%, at a minimum. How did all this come to pass? Why is it so dire? Let’s rewind the tape a bit.

We all know about the subprime crisis. That’s part of the problem, as banks and institutions are now having to write off a lot of bad loans. The second part of the problem is a little more complex. Because we were running a huge trade deficit, countries all over the world were selling us goods and taking our dollars. They in turn invested those excess dollars in US bonds, helping to drive down interest rates. It became easy to borrow money at low rates. Banks, and what Paul McCulley properly called the Shadow Banking System, used that ability to borrow and dramatically leverage up those bad loans (when everyone thought they were good), as it seemed like easy money. They created off-balance-sheet vehicles called Structured Investment Vehicles (SIVs) and put loans and other debt into them. They then borrowed money on the short-term commercial paper market to fund the SIVs and made as profit the difference between the low short-term rates of commercial paper and the higher long-term rates on the loans in the SIV. And if a little leverage was good, why not use a lot of leverage and make even more money? Everyone knew these were AAA-rated securities.

And then the music stopped. It became evident that some of these SIVs contained subprime debt and other risky loans. Investors stopped buying the commercial paper of these SIVs. Large banks were basically forced to take the loans and other debt in the SIVs back onto their balance sheets last summer as the credit crisis started. Because of a new accounting rule (called FASB 157), banks had to mark their illiquid investments to the most recent market price of a similar security that actually had a trade. Over $500 billion has been written off so far, with credible estimates that there might be another $500 billion to go. That means these large banks have to get more capital, and it also means they have less to lend. (More on the nature of these investments in a few paragraphs.)

Banks can lend to consumers and investors about 12 times their capital base. If they have to write off 20% of their capital because of losses, that means they either have to sell more equity or reduce their loan portfolios. As an example, for every $1,000 of capital, a bank can loan $12,000 (more or less). If they have to write off 20% ($200), they either have to sell stock to raise their capital back to $1,000 or reduce their loan portfolio by $2,400. Add some zeroes to that number and it gets to be huge.

The letter goes on with more examples and makes the case for action.  Unfortunately, the House Republicans voted the bailout bill down.

I’m remembering Alicia Titus today. My prayers and thoughts are with her family.

She was on my team at Netcentives in 1999, and then left to learn photography and ultimately to become a flight attendant based in Boston for United Airlines. She was on United Airlines flight 175 when it crashed into the World Trade Center at 9:03 am EST / 6:03 am PST (full timeline of events on Wikipedia).

Every year I try to drop a quick note on her guestbook at her tribute site, SweetAlicia.org. I also posted about her on the then Kango (now UpTake) blog here.  Pat Jenkins at UpTake also posted on September 11 Memorials around the country.

Here’s a few pictures of Alicia from SweetAlicia.org:

While Alicia was Netcentives and worked on my team, it wasn’t until after she died that I realized that there was a lot I didn’t know about her. The crazy dot-com bubble days, where I felt like Keanu Reeves in Speed trying to keep the bus from exploding, wasn’t conducive to really spending time with people and building deeper relationships. Anyway, on 9/11 I often read her tribute site and other tribute pages like this one on BrokenHeartTrading.com and on Sep11Memories.org.

During this past year, I found an old waterproof film camera that I had failed to develop over the years. I developed it and found pictures of Alicia and my other team members on one of my most memorable offsites. I uploaded a those old Netcentives Offsite Photos from 1999 onto Flickr.

In the photo below, Alicia is 3rd from the right:

In the photo below, Alicia is 5th from the left:

In this photo below, Alicia is #2 from the left:

You come into contact with so many people in your life.  Seasons come and go.  There are so many people in this picture that I care about and consider friends, and yet we’ve lost touch.  Paul Erlicht, Deann Fairfield Work, Bethany Selland, Jonathan Blatt, Ashwin Verma, Tom Harvey, Lisa Cross.  And that’s just the people that decided to go surfing at that offsite.  It was a blessing to work with so many amazing people during that season of my life.

9/11 and Alicia reminds me to make an effort to go one level deeper in getting to know people, beyond the normal course of business.   I wish I had done so with Alicia.

Remembering her on this day.

I used FriendVenn to look at who I subscribed to vs. who subscribed to me. Use at your own risk because you need to put in your FriendFeed password into the app.

I then went through and added some people that I know or wanted to follow that I wasn’t subscribing to, and also pruned some people that I was subscribed to for no reason that also wasn’t subcribing back to me. I didn’t really scrutinize the 90 reciprocal subscriptions.

Here are the results:

You have 229 subscriptions and 181 subscribers. Here’s how they break down:

James Fallows has been blogging from the ‘jing about the security preparations in the capital.

His blog seems to be down and I was only able to retrieve stuff via Google’s cache. I’ll paraphrase and quote extensively from his post.

Fallows received an email from a person that he seems to suggest is ethnically Chinese and now a citizen of a Western country, and has some familiarity with defense matters. The main point of this person is that the central government is taking extreme security measures because they have limited intelligence on the real threats that might be there, so they can’t afford to take chances.

Here’s the email (heavily paraphrased by me to avoid duplicate content detection, in case some patriots shut down the original site):

I don’t want to an apologist for what the government has done to itself. But the reality is that their system is not prepared to deal with the range of threats that they might face when the opening date arrives.

The country does not yet have the kind of early-warning methods that are in place like those like the leading countries in the West. These Western countries have real-time monitoring abilities, can analyze traffic patterns, etc. Therefore, they get an early-warning when a storm is on the horizon.

Despite all this talk of all the human “James Bonds” who are working for them abroad, they just don’t have the same capabilities of the Western system. An example is the riots related to T1b-t. There was not good intel, preparation, or any way to really spin-control the situation after it happened.

Bottom line: less than 4 weeks until opening date. Recommendation: create a PR and security SWAT team to handle collateral damage like press visas being denied. However, this team would really need to understand the West. There doesn’t seem to be any awareness from the central government or city government that “they are over their heads”.

Not sure I agree with the assessment. Its possible that internal bureaucratic infighting and CYA behavior may be creating a dynamic where the most conservative people are winning and the most “cosmopolitan” people who understand the collateral PR damage are being silenced or forced to go along for the ride.

I think examples of that can also be found in the US handling of Homeland Security during this post-9/11 era. And we have the benefit of the best intelligence gathering apparatus in the World by far. That doesn’t preclude bureaucratic agencies outside of the No-Such-Agency to overreact or to react in a much less nuanced way that the intelligence agency could presumably equip them to act.

There is also the need to mask the precision of the intelligence. Enemies can detect intelligence capabilities by observing the resulting response to their actions. This action-response feedback loop can allow enemies to develop a sense of intelligence capabilities and then try to find ways to avoid detection. So a “blunt” vs. “fine-grained” approach may also have the benefit of preventing the enemy from seeing what intelligence capabilities there actually is.

I tend to think the easiest explanation is the bureaucratic effect of everyone playing CYA. So there may be large numbers of human analysts and even intelligence gathering systems that are gathering information, and “defanged” because of bureaucratic power in other powerful agencies. However, intelligence is also probably very closely held and not shared broadly with all other agencies, so therefore the information being shared between agencies may be pretty “blunt” and thus resulting in pretty “blunt” directives.

This could then result in enemies underestimating the true intelligence capabilities.

I had the chance to celebrate with Shannon his birthday last week at an apres-Supernova conference event.   Shannon is starting a stealth-mode advertising network called Nearness Function.  He shares an introspective retrospective (can you say that?) with his blog readers here.

Here’s a picture of Shannon at the Blogtropol.us lounge at Web 2.0 Expo:

Shannon has an earlier post with tips on being productive.  I like them and thought I’d just capture them here:

1. Dress for success
2. Stay hydrated
3. Vary your posture and pay attention to your surroundings
4. Surround yourself with others who are getting things done
5. Have to-do lists that you refer back to on a regular basis
6. Cross off at least something from your to-do lists every day
7. Snack and eat healthily
8. Get some physical exercise every day

I feel like I already focus on 4-6 and I want to continue to do that better.

Maybe what I’ll tackle next is #8 and #1!  Number 1 is relatively easier to accomplish than #8 which has not been an area of success for me in the past.

Thanks Shannon for the tips

At my wife’s request, I did some yarn shopping in Shanghai. Not knowing anything about yarn, knowing only a little about Shanghai, and being a confirmed uninterested shopper, I set out to a specific intersection provided to me by my wife via her Ravelry friends. True love means overcoming your worst fears and shopping for yarn!

Here’s the storefront.

Here’s the front entrance.

Here’s some of the shelves, chock full of yarn.

Here’s the yarn I purchased.

Here’s how much it cost (in RMB).

Here’s the shopkeeper and me!

This past week was crazy. On Monday 5/12, after the Sichuan earthquake happened, we tried to respond by sharing news of China earthquake pictures and blogosphere coverage, then later compiled an earthquake donation guide that is now up to 40 ways to give. I donated to American Red Cross and Mercy Corps so far, both of which are reputable US tax-deductible organizations with reputable local partners in China, the Red Cross Society of China and the China Foundation for Poverty Alleviation (CFPA). Oliver Ding then created a great slideshow version of the donation post. In short, I wish I could do more. Prayer, donation, and sharing information is what I’ve done so far.

The continued polarization between Western popular opinion and Chinese popular opinion continues. I read Chinese Internet Users Say Enough to International Bullying which talked about the (L) China viral movement. The TechCrunch commmenters, especially the anti-(L) China commenters, were so offensive that I got baited into writing a 450+ word comment on TC. What a waste of my time — I’m not going to change any minds over there. Anyway, I’ll just post it at the bottom here for recordkeeping.

Christine Lu launched her Harmonious Fries award to celebrate people trying to bring people together rather than split them apart. Here’s mine!

Thanks Christine! Follow @christinelu at Twitter!

Here’s my TechCrunch comment:

It amazes me to see TechCrunch haters on virtually every topic here on TechCrunch. I feel blessed to live in the USA where freedom of speech and freedom of the press allows us to express virtually any point of view without serious concern about my personal liberties being curtailed by the state. I (L) USA!

At the same time, it disturbs me that the anti (L) China commenters are so much more judgmental and one-sided than the pro (L) China commenters. Look, I am not fluent in Chinese and can’t read Chinese media or BBS. BUT there seems to be ABSOLUTELY NO EFFORT MADE by most Western audiences to even UNDERSTAND the point of view of the Chinese people who feel Westerners are getting only 1 side of the story.

The amount of global awareness by educated Chinese people is on par with that of other educated people in most countries. It is the developed 1st world, and America in particular, where people have completely taken their freedoms for granted and not sought to engage in dialogue with others, and just take their own preconceived notions and allow events and news to just reinforce whatever they were already thinking.

On balance the pro (L) China commenters seems A LOT more reasonable and cosmopolitan than the anti (L) China commenters, at least on this thread. Doesn’t that surprise you? Aren’t “we” the ones who are free and “they” the ones who are brainwashed and held down by a repressive government?

Look — if “they” can climb over the Great Firewall via proxy servers (which btw is a total pain in the *ss) to see the outside world, maybe “we” can read Global Voices Online or Rolang Soong’s fabulous translations on EastSouthWestNorth blog (www.zonaeuropa.com) to climb in. Visit. Listen. Keep an open mind. Try to understand. Have a dialogue. Then try to convince. That is far superior than staying in our own little world with our own preconceived notions.

America may only have another 20+ years as de-facto world leader to steer the rules in place before we turn over leadership to a more complex multipolar group which will undoubtedly include China, India, EU, and Japan. Let’s regain our moral authority by reengaging the world with more humility and open-mindedness and only then will we get to create the world we want before we have to turn it over. The close-minded comments of the TC haters on this board convince me that we are still “same bed, different dreams” with the Chinese, and most other peoples in this world for that matter.

Saw @Kirsteno tweet about TweetCloud so I thought I’d try it. Here’s my TweetCloud as of 4/11! Warning: it takes about 0.04 secs per tweet to process, and mine took 135 seconds. So a massive tweeter like @davidfeng or @christinelu will have to wait a much longer time.

Here’s the first version with all the @ replies included:

Not surprisingly, the top words (including below the fold) are:

1. Twitter
2. @davidfeng
3. @chrsitinelu
4. post
5. nice

Here the version without the @ replies:

The top 5 words are, uninterestingly:

1. Twitter
2. Great
3. Nice
4. Post
5. China

There you have it. My Twitter zeitgeist.