Those Shoes are Killing Me

A tragic story posted in www.shanghaiist.com about a Christmas shopping excursion gone terribly wrong:

Man leaps to his death after girlfriend refuses to stop shopping

When his girlfriend insisted on prolonging their Christmas shopping marathon, 38-year-old Tao Hsiao leapt from a seventh-story walkway and killed himself in a Jiangsu shopping mall.

Tao and his girlfriend (whose name has not been released) had reportedly been in the Golden Eagle International Shopping Center, in Xuzhou, for some five hours before a rather routine relationship scuffle escalated drastically out of proportion.

Tao told his girlfriend that "she already had enough shoes, more shoes that she could wear in a lifetime and it was pointless buying any more," according to a witness. Tao was then accused of "spoiling Christmas," and the shouting match likely would have continued had Tao not chosen that moment to hurl himself over the seventh-story balcony.

Tao fell through elaborate christmas decorations and crashed into a shopping stall on the mall's ground level, injuring no one but himself in the process. He died on impact.

World’s Academic Ordering – Asians on Top

 

 

Let’s first dispense with two distortions in the above graphic. First, Shanghai’s score at the top, while interesting, is an oddity to the result. Though some local Shanghai residents might think otherwise, the place is a city, not a country. It is not administratively autonomous, and it happens to be China’s wealthiest and most elite urban entity. Thus, comparing test results from Shanghai to the US is like comparing a nugget of gold to a rock quarry. It just ain’t the same thing.  Second, and in a related manner, whinging about the overall scores of a country such as the US is a waste of breath. No country is more heterogeneous than the US (“bring us your tired, your poor, your huddled masses yearning to watch network television”) and with a population of 300 million diverse and economically unequal citizens, the country is not going to do well when taken as a whole. Specific areas such as Massachusetts and Connecticut (and probably the San Francisco bay area, if it were segregated out) score meaningfully better than the national average.

 

The 2012 test was conducted with approximately half a million students in 65 nations and educational systems through the Program for International Student Assessment, or PISA, which is coordinated by the Paris-based Organization for Economic Cooperation and Development, or OECD. The Shanghai distortion notwithstanding, Asia’s leadership is still remarkable across the board. Special mention goes to Vietnam for poking itself up into the Top 10 in Science.

 

Yahoo News summary

The Peak of Hong Kong Property

Hong Kong’s Opus: a case of twisted loftiness?

When the smart money gets out of the market, who should be going in? That question will be on many real estate buyers’ minds when they consider the current state of the top end of the Hong Kong residential market. And lofty it is. As detailed in this SCMP article on Peak homes sold, a house on Barker Road in HK’s Peak district has just sold for $69 million. At 5,700 square feet, that works out to a whopping $12,000 per square foot. This latest deal follows on the back of another sale last week of a 6,800 square foot house on the same street that sold for $95 million, or $14,000 per square foot. This earlier deal represented the third most expensive home ever sold in Hong Kong.

 

This flurry of activity at the nose-bleed end of the the market is likely to encourage over ultra-premium property holders to sell. An apartment unit at the Frank Gehry-designed Opus could sell for over $60 million, or $11,000 per square foot, which would make it the most expensive flat in Hong Kong, and perhaps all of Asia.

 

These numbers are particularly extraordinary considering the restrictions that the Hong Kong government has been imposing to cool the wok-hot market. Mortgages are limited to 40% of appraised value, and transaction stamp duties for luxury dwellings range from 4.25% for primary residences to 8.5% for secondary residences. For the Opus apartment alone, the stamp duty would represent either $2.56 million or $5.12 million, depending upon first or second home status. Those additional costs alone would buy a palatial home in other most places in the world.

 

Buy or sell? When it comes to real estate, it’s always safer to follow the smart local money.

How to Get Rich – Literarily!

 

A money manager for the ages

Everything I needed to know about managing money I learned from... classic fiction? So asserts this thought-provoking article from the Wall Street Journal's Marketwatch column. Who are the suggested literary Midases and what do they espouse that could put you into the financial 1%?

 

- Daniel Defoe (Robinson Crusoe), on having the appropriate emotional detachment and perspectives about money

- Charles Dickens (Little Dorrit) and Anthony Trollope (The Way We Live Now), on avoiding bad investment decisions and fraudsters

- George Eliot (Middlemarch) and Gustave Flaubert (Madame Bovary), on curtailing potential ruinous consumer credit

- Charles Dickens (A Christmas Carol), on saving, not hoarding

- Leo Tolstoy (Anna Karenina), on performing due diligence and knowing the value of assets.

 

Okay, these historical folks may not have been a Rothschild or Morgan, but they certainly knew a thing about how emotions and circumstances can impact many outcomes in life, including wealth accumulation. So one might characterize these books as a holistic approach towards asset management, one which also confers wisdom on loads of other things (not to mention dispensing hours of entertainment). Therefore, instead of heading down to your local private banker, perhaps give the local library a try. An added benefit awaits you - you won’t get charged a 2% front-end load.

JP Morgan: No Thanks to $2 billion China Deal!

Spotlight too bright for JP Morgan these days

Okay, now the US SEC’s investigation into JP Morgan’s hiring of Chinese princelings to win deals is really starting to take a bite. As reported in this Wall Street Journal article and elsewhere, JPM has resigned from acting as a bookrunning lead manager for a $2 billion offering for China’s well-regarded China Everbright Bank. What?? An investment bank turn down a cherry piece of business in a strong market? NFW. Banks almost never walk away from such promises of money. Unless...

As it turns out, JPM had once hired Tang Xiaoning, son of the chairman of China Everbright Group, a state-backed conglomerate that owns China Everbright Bank as well as a brokerage and insurer. Might Mr. Tang have helped his then-employer win a deal that his Dad had a hand in awarding? No one is commenting for the record. However, relationships such as this are now casting a lengthening shadow for companies caught in the spotlight of regulatory scrutiny.

Biggest Church Begets Biggest Scandal

Senior pastor David Yonggi Cho accused of siphoning off millions in church funds; his camp denies the allegations

By Cho Yeon-hyun, religion correspondent
The HankyorehNov. 15, 2013

http://english.hani.co.kr/arti/english_edition/e_national/611326.html

30 elders from Yoido Full Gospel Church, the world’s largest megachurch, held a press conference at the Korea Ecumenical Building in Seoul’s Jongno district on Nov. 14 to allege that senior pastor David Yonggi Cho and his family funneled off hundreds of billions of won from church donations.

Yoido Full Gospel Church (left) and senior pastor David Yonggi Cho

The sheer scale of the amounts alleged by the elders to have been misappropriated is beyond the imagination. The elders made public a report from an investigation into three alleged improprieties by Cho made by a special investigation committee and ethics committee formed within the church last year. This time around, the allegations came from members of a group called the Prayer Meeting for Correcting the Church, including elders Kim Dae-jin and Kim Seok-kyun.

First, they claim that Cho returned only 64.3 billion won (US$60.2 million) of the 163.3 billion won (US$152.9 million) he borrowed from the church while building the CCMM Building between 1992 and 1998, when he was chairman of the church‘s Mission Society. The remaining 99 billion won (US$92.7 million), they say, was never returned.

By the elders’ account, construction payments of 28.5 billion won (US$26.7 million) and 16.6 billion won (US$15.5 million) were made at the time to Next Media Corporation and Facility Management Korea, companies managed by Cho’s eldest son Hee-jun.

It is also being claimed that Cho’s third son Seung-jae’s International Club Management Group bought three floors of the building from the church for 29.5 billion won (US$27.6 million) and sold them back three years later for 37.2 billion won (US$34.8 million) - pocketing the difference of 7.7 billion won (US$7.2 million).

In addition to allegedly appropriating 34.2 billion won (US$32 million) in Kukmin Ilbo newspaper lifetime reader memberships from 50,000 people for stock investments, Cho Hee-jun was also accused by the elders of making off with a total of 240 billion won (US$224.7 million) in assets related to the church.

They also claimed that David Cho’s wife Kim Sung-hae, president of Hansei University, has yet to account for 10.5 billion won (US$9.8 million) paid by the church as support for Bethesda Christian University, an institution she runs in the US. The elders also view US real estate purchased by the university for around US$15 million as having been bought with church money.

In total, the elders are accusing the Chos of embezzling as much as US$500 million or more in church money.

Associates of David Yonggi Cho insisted he had “no connection with any direct exchanges of money.”

Kim Sung-hae’s camp said the details of the Bethesda Christian University situation would be brought to light by prosecutors, who are currently investigating, but added that the elders’ claims were “merely allegations, not facts, and not worth responding to each one.”

The most explosive part of the allegations is the sheer amount of money supposedly received by David Yonggi Cho. The elders claim he received a severance payment of 20 billion won (US$18.7 million) when he stepped down as head pastor in 2008 - and that even that was decided without their knowledge or any voting by major church decision-making bodies. They also said no information was available on the whereabouts of 12 billion won (US$11.2 million) a year paid between 2004 and 2008 - 60 billion won in total - for “special missionary expenses.”

The elders gave a yearly total of 100 billion to 120 billion won (US$93.6-112.3 million) in donations received by the church. This would mean the annual amount taken in by the headquarters dropped by almost half from about 200 billion won a year when Cho spun off the Jisungjun center in downtown Seoul around the time he handed over senior pastor duties to Lee Young-hoon in 2008. Nevertheless, it remains the largest amount received in donations by any religious body in South Korea.

The elders also claim that Cho continued controlling the church even after his “retirement” by making decisions as “governor” - to the point where his successor Lee had difficulty exercising his authority on appointments and finances.

One of the former elders at the press conference, Ha Sang-ok, previously admitted to taking part in giving 1.5 billion won (US$1.4 million) while collecting the book “Madame Butterfly in Paris” from a female vocalist in France named Jeong who anonymously wrote the account about an affair with Cho.

“A sect leader might violate the commandments and do as he wishes, but a pastor cannot do that,” Ha said. “Over the past 14 years, I have met with Rev. Cho many times to try to persuade him to repent and return to being a great pastor, but the corruption has continued. That‘s why I had no choice but to disclose it to the outside world.”

The elders also made public a statement allegedly made by Cho saying he would give Jeong 1.5 billion won in exchange for her making no future mention of their extramarital relationship, along with copies of receipts for the two transactions totaling 3 billion won.

The church’s public relations office said the claims were “a personal matter that the church has no comment on.”

Lee Won-gun, an elder who functions as Cho’s “chief of staff,” said Cho is “unconcerned with money, to the point where I’ve never once seen him talk about giving money or not giving money to somebody.”

“There will be a response from this side after looking at the elders’ claims,” Lee added.

Cho is currently on trial for alleged causing 15.7 billion won (US$14.7 million) in damages to the church by instructing it to buy 250,000 shares of his eldest son’s stocks at a rate four times market value.

During the press conference, a physical altercation occurred when a number of Cho’s supporters attempted to rush the platform at the press conference and accused the elders of “insulting” the pastor.

Blood Money

Prime Minister Wen Jiabao: “That’s my girl!”

When it comes to the New York Times’ and the US SEC’s investigation into JP Morgan’s relationships with China’s princelings (first blogged here in August 2013), the digging goes on. The emerging details are impressive, as set out in this New York Times updated article and, from last year, this New York Times chart of the Wen family and its dealings. The article focuses on Wen Ruchun (aka Lily Chang), daughter of ex-Prime Minister Wen Jiabao, her advisory firm Fullmark Consultants and the myriad business deals that she did with JP Morgan in the years leading to and around the 2008 global financial crisis. The names of individuals and entities directly involved (including China Railways Group, Ping An Insurance, the China Banking Regulatory Commission) is elite, and the likely sums that went around this network of influence peddling and pocket-lining is staggering. The full amount of money involved in the various schemes may never be publicly known.

As eye-popping as this one case in isolation may be (together with the fact that the Wen family made several billion dollars on their Ping An dealings alone), it sheds light on the fact that the hiring of princelings and other insiders by large banks and corporations has been “business as usual” for decades. Anyone claiming to be ignorant of this practice must have been doing business on Mars. In some respects, it’s not dissimilar to Lance Armstrong crying out that he doped because everyone else did. How could he be competitive otherwise? The differences between Lance and the banks are many, of course, not the least of which is that cycling’s practice was conducted behind a dark shroud of secrecy, rather than merely a thin veil.