10/31/2008

A love letter to Shanghai

Frankly, after bottle of wine and so far the two best movies of 2008 (The Dark Knight and Kunsten a tenke negativt) it is appropriate time to write a love letter. Therefore; I love Shanghai because of...

...arteries clogging traditional Chinese breakfast (Vermont cheddar found its match). Although, most of the Chinese people will eat bowl of noodles for a breakfast, I had a pleasure to be treated with traditional Chinese breakfast (more popular in northern part of the country). These contain oil-soaked & deep-fried baguette-resembling thing which actually tastes good although heavily heavy. Furthermore it contains various kinds of dumplings with meat and other fillings (health warning for all those calorie counting losers).

...Chinese kitchen with all its varieties. Besides noodles, fried noodles, fried rice, vegetable dishes, dumplings of 1,000 kinds you have also province specific cuisine. Shanghai is heavy on seafood, Beijing on a duck, Sichuan is spicy and Hunan is absolutely hot. Besides that you can fill yourself up in Korean, Japanesse and occasionally European style dining eateries. What is the most important for all us - budget constrained students - it is all sooooo cheap :) Besides unbelievingly cheap university canteens (huge three course dinner/lunch can be purchased for 13 kuai - 1.5 euro) restaurants are fairly inexpensive (all fair-skin warnings and toilette rush alerts apply!). Those who dare, can eat on street for virtually nothing - in total for cost of higher toilette paper consumption.

...tailor market. The best place for clothes shopping in Shanghai is offering tailored shirts, suits, coats and anything else made from fabric for reasonable prices (depending on your bargaining ability). I do not know about any other place where you can buy tailored shirt for 85 kuai (9 euros). Eventually you end up buying suits and shirts you really do not need - just for the fun of it (I'm thinking of getting made two button suit - Paul Smith style :D - in addition to five shirts I have already bought). Anyway, my biggest problem is how to get all these clothes back home as I flew in 15 kilos overweight already. Only possible solution I can envisage is that anybody coming for a visit will fly in light-weighted (meaning one empty luggage) :)

...fake market. The best place for "super brands" shopping anywhere east of Paris. And what is the best - it is all fake and really really cheap (again depends on your bargaining ability). You can buy Fred Perry, Paul Smith, Louis Vuitton and anybrand you can imagine here (I do not even dare to start about watches :) ). Of course you have to be careful as quality of fake can be deceiving. There are several levels of fake; from really cheap ones which would last up to first "stress test" or which are easily recognizable as fake by close look, to those which are virtually same as original. All above is reflected in the price of fakes.

...bargaining. Anything can be bargained for and unless you are rich and do not care, everything you should bargain for. Usually it takes three walk-outs from the shop and shop attendant chasing you in the halls till you get reasonable price (the one you asked for the first time :) ). Furthermore, unlike in Europe or Americas, you can try and taste the fruits at the market so you know what are you buying - at least the taste of it. As a "fair skin" you have to watch out all the time as you are easy target for the sellers to ask/get more than from the natives.

...People's park Sunday dating sessions. In one of the People's park meeting points each Sunday meet people who post their profiles (one page flyers) on surrounding benches, trees and strings in between them. Usually these people are 40 and above (all the way up) and allegedly you can meet concerned parents searching for the future bride-to-be. As I was told such parents are worried that their only child is not able to enter the relationship and a "little" nudge is needed. This is Chinese version of western civilisation internet dating scene :)

...non-drinking Chinese students. Virtually, you can get drunk only with your fellow international students as Chinese people do not drink or their drinking stamina is fairly low. On the other hand when drinking they drink till the bitter end :)

...my student life. I almost forgot how good it is to drink beer and wine freely at noon. Luckily I was reminded this week at Czech National Day celebration organised by Czech consulate. I almost forgot how good it is to study and torture your brain. Luckily I am reminded everyday as my Chinese lessons require plenty of preparation and students here are just used to study like crazy and spend their weekends self-studying in classes - I follow their example (occassionally) as I prepare for all the crap I signed up for. I almost forgot how good it is to visit lectures of renowned professors and rise on the intellectual ladder :D Unfortunately I was reminded by a lecture given by prof. Kenneth Arrow at Fudan. Unfortunately any further rise is prevented by my duties at least until end of this year. Then the ascent of the monkeys will continue!

...doing sports. Unfortunately I am getting beaten all the time and it becomes more and more frustrating :)

...difficulty of Chinese language. Although nowhere near of being a lingua franca, Chinese is spoken and understood by c. 1.3 billion people (the highest estimate quoted as there is c. 1.4 billion people living in China these days). After 5 weeks of studying Chinese and 20 characters a day I come to conclussion that whoever submits himself voluntarily to intensive Chinese course he is either crazy, masochist or plain stupid. I guess the third option applies to me as I did not climb the IQ ladder high enough. On the other hand, it is very nice to see the actual results of your studies in a daily conversation (so far one-to-two word sentences).

10/15/2008

Volatility forever...

Is it true that we entered the age of turbulence and volatility as former FED chairman suggests in the title of his book?* Should we expect even bigger swings on stock markets or the worst days are already over? Will the vision of the latest Nobel prize laureate Mr. Krugman (btw congratulations!!!) come true and the US will experience severe recession if not depression? Below you can find some thoughts re latest markets development and outlook.

In past two years (2007 and 2008) we experienced unusual financial markets development with wild swings both up and down perfectly illustrated by single day plunges of 679 points (Oct. 9) and 778 points (Sept. 29) and 936 points increase (Oct. 13) all withing 11 trading days**. And for the simplicity purposes we happily ignore intraday volatility which presents us with some really quirky numbers. As all reaction has its action, even this new found volatility is not self-invented. Whether it is just a prelude for the upcoming recession or has less simple explanation is a still open discussion. One of many reasons might be return to pre-Volckerian monetary policy (interest rates as main tool for fine-tuning of economy) and focus of new chairman (Mr. Bernanke) on bringing more clarity into it as opposed to "if it's not broken, don't touch / don't repair / don't explain" approach of Mr. Greenspan.

Mr. Bernanke's background (inflation targeting expert and promoter) and well documented remarks in first years of his tenur might have had exactly opposite impact than the one intended and eventually could have brought confusion and increased volatility to markets . That the volatility of the US markets (precisely Dow Jones Industrial Average index - which is the best measure of the US financial markets anyway) increased in past two years is confirmed by computations summarised in the table below. If we adjust data for a first 100 days "grace period" the difference increases (mainly due to exclussion of 1987 financial market meltdown from Mr. Greenspan datafile which he could not affect or eliminate anyway), showing that in fact we are entering the age of turbulence. More detailed analysis of annualized volatility rates*** (both for actual trading days in a year and 252-trading days year) is presented at the end of the text.

Standard deviations of continuosly compounded day-to-day DJIA closing values


Greenspan Bernanke
Standard deviation (Stdev.) 0.0111 0.0126
Stdev. adjusted for first 100 days 0.0100 0.0133

But is this volatility to continue? All evidence points out to the possitive answer to this question, meaning more uncertainity and damage to all investors. As previous slow-downs suggest higher volatility of financial markets in the periods of distress (see below and link) we should remember that technically we are still more or less not in the recession - although heading there at Jorg Haider speed. If Mr. Krugman's prediction will come true and the US and EU experience recessions in the immediate future (i.e. 2009 and beyond) we can expected increased volatility of financial markets in next years with new records for daily decreases and increases on pretty much regular basis. Ultimately this mean that smart investors can gain loads of money by entering and closing shor-term and/or intraday positions. On the other hand, all others (including me - to a great displeasure of my dad) should brace tehmeselves for a rough ride as they try to weather the downturn.

Unfortunately, governments with their bailout plans do not help to quickly resolve financial market crisis as participants keep testing the limits of government pockets and push for more (even by throwing word "panic" into the mix). By enabling them to do that, ultimately I might end up living in the country with the highest company private ownership participation rate in the world. Just don't tell me it is so bad or I am that smart and picked it upfront - all of us know it is not true :)

Note: * Be warned that as I did not read the book, basically I do not know what I am talking about. I did not have spare time for this type of "light reading" literature in past two years.
** For more details please refer to DJIA development chart available at any major financial portal.
*** Volatility is the most commonly measured as a standard deviation of continously compounded returns. This standard deviation is usually annualised in order to show comparable measures. Circa 252 trading days are within one year (in our sample it was the most common number of trading days) although differences arise (most notably in 2001 and the incomplete years at the begining and end of each chairman tenure).


Annualized volatility

Greenspan Bernanke

act. days
252-days act. days 252-days
2008

0.2784 0.3110
2007

0.1452 0.1455
2006 0.0302 0.1073 0.0937 0.0979
2005 0.1028 0.1028

2004 0.1082 0.1082

2003 0.1653 0.1653

2002 0.2540 0.2540

2001 0.2122 0.2139

2000 0.2074 0.2074

1999 0.1611 0.1611

1998 0.1985 0.1985

1997 0.1880 0.1876

1996 0.1201 0.1197

1995 0.0866 0.0866

1994 0.1090 0.1090

1993 0.0868 0.0866

1992 0.1035 0.1031

1991 0.1461 0.1458

1990 0.1635 0.1631

1989 0.1429 0.1429

1988 0.1823 0.1819

1987 0.3436 0.5427

10/12/2008

Chinese medicine / Dumplings = Education

After several days of "normalcy" finally something interesting happened. In line with my noble resolution of increasing daily amount of sport I decided to play basketball on Thursday. Of course as usual, my clumsiness prevailed and after three long minutes of hard on-court action, my head met with shoulder of an opponent I was supposed to guard. Bottom line of this are three stitches over my eyebrow. Hereafter follows the description of days and events that followed.

I have to admit that the cut on the eyebrow was deep and initially I was bleeding like a pig at hog-killing (or slaughterhouse). Opposed to my wishes (lazy by nature I did not want go through stitching-it-up procedures as any amount of stitches would require multiple visits to doctor and hospital) doctor from our university clinic insisted on my visit to hospital and seeking out stapling job. Maybe it was post-traumatic shock or endorphins released into blood which was still inside my body, but all the way to the hospital I was happily chatting (more precisely attempting to learn new words by wildly pointing to things around) with the cabdriver. Considering his zero knowledge of English and my trickling blood problem we had to look like really odd taxi. I think he had more fun than I had as he almost caused two accidents while vigorously attempting to explain proper pronunciation of bicycle, three-wheeler and other means of transportation in Shanghai.

Visit to the hospital was quick and efficient as I was pointed in the right direction or showed by nurse to the proper room like complete idiot. Ultimately I ended up in the room with doctor whose English was to my surprise almost flawless (seriously - hands down her English was better than English of some of my professors at University back in Prague). On my second visit (healing progress check up) she disclosed that she recently spent three months on some training/internship/whatever program in the US. Ultimately three stitches cost me only 50kuai (local currency) plus 30-something kuai in "hospital hospitality visit charges". Considering local stitch-job prices and fun I had during my encounters with the staff in white dresses, I am not only strongly inclined towards playing basketball again but also towards exploring some more adrenalin forms of self destruction (e.g. with my friends we might undertake indoor climbing exercise next week).

Anyway, as my little brother put it nicely, this patch up job might only help my face and I might finally look like Bruce Willis at the end of Die Hard movies (he took great pains in pointing out that I am bald enough already). That no harm was done to any of my motoric functions was proven next day when four of us played badminton (losing a bet - tickets to a cinema - I blame entirely on limited vision from a patch I was wearing that afternoon). Note to the fellow badminton players in Prague; beware - the beast downhere in Mordor is gathering it's strength again :)

Over the weekend besides usual parties (this time with the hiking club who had it's annual dinner) I have visited 7th Shanghai Biennale in Shanghai Art Museum taking full advantage of my student status (5kuai instead of 20 :) ) and my host for the day (I got from her also my first traditional Chinese breakfast which are little too heavy for me :) ). Surprisingly the exhibition was very nice and some of the pieces were worth every mao we paid. It is obvious that I still do not understand Chinese culture and way of thinking. One of the pieces showed collection of c. 20 T-shirts with various quotes including "dumplings = education". First hand explanation was that without eating nobody will survive and thus he cannot educate himself. If you can come up with the better one please let me know :)

Enjoy!

10/05/2008

Wugong shan / TIC

During week-long* vacation due to Chinese National Day (1 Oct) me and three other international students joined hiking club "expedition" to Wugong shan in Jiangxi province. Besides us there was another 10 hikers from various Shanghai universities or already graduated friends of the club members. Plan was to hike along the ridge of Wugong shan for four days (c. 60-65km) climbing the various peaks along the way (Wugong shan is the highest peak of the range with elevation of 1,918m above sea level). Hereinafter follows the account of this adventure with selection of pictures attached in the gallery at the sidebar (in the following days).

Day 1: After meeting at South Shanghai Railway station and successfully smuggling two out of four gas cartridges through security checks at the station (caring gas and other dangerous objects is prohibited and X-ray detectors are installed on all stations) we boarded train destined for Shenzen (probably). Our destination was Ji'an in Jiangxi province where we were supposed to be picked up by shuttle bus and driven to our "base camp". After the 10.5 hour long journey when only 12 out of 14 people had seats reservations (this is China) international students realized that shuttle bus transfer is to be negotiated upon arrival. This proved to be more difficult than expected as drivers were uncharacteristically unwilling to lower their price during negotiations. Who would do it if he is supposed to drive 14 muffs for two and a half hours at midnight to some remote place without any prospect of getting some customers on a return journey? Finally, after our failed attempts to reach out to competition we relented and pressed ourselves with our backpacks into single vehicle size of Ford Transit. During ride to final destination we experienced something what certainly Russian tanks did on their way to Berlin - breakneck pace on the breakneck roads of some backwater place. When we arrived to the destination or more precisely, driver lost his patience and pulled in the middle of the second village we got lost in, we camped and built our tents on the porch of house in the middle of this village. This is China.

Day 2: Awaken by 5.00am by barking of dogs and shouts of surprised villagers of Jinding who found 10 tents built overnight on their main square, our leaders realized that we are c. 1 hour drive from the intended and paid for destination (this is China). Luckily, villagers were very very nice to us (mainly thanks to the fact that there were three of us of fair skin which was fairly big attraction along the whole way as we were only white people we met and due to fact that we had miraculous machines making pictures of people and everything around - we promised to send these pictures to them) and fed us and provided means of transportation (truck and a motorcycle) to a start of the trail. The trail led us up on the top of Wugong shan (1,918.3m). During the ascend we passed Budhist temple where all internationals received blessings and amulets to protect our fortunes and lives. Also we drank (sipped - due to health reasons) from well of eternal life. Considering the things we saw on cups we drank from we expect our lives to be seriously cut (basically negating the effects of amulet and water). Anyway on the top we visited several ancient Taoist temples built well before most of the cathedrals I have visited in Europe. Their size corresponding to the size of early Christian churches from Roman times. Camping was provided in front of a hut operated by our guide's family/acquitances in a village just bellow the peak.

Day 3: Third day was the hardest day (walking-wise) of the trip as we were supposed to cover c. 30 km. During the day we ascended and descended over six major peaks along the ridge of Wugong shan range. Hills** were not high but the character of these hills required deep descents and long ascends as peaks were separated and standing in mohyla like formations. All the way we experienced cloudy and misty weather not allowing views. What significantly affected our experience was amount of trash left along the trail by other groups. It appears that abuse of nature is prevalent in parks and nature areas too as plastic bags, bottles and other kinds of trash are freely disposed along the paths (this is China). On the other hand it appears that young generation is environment conscious and tries to minimize its imprint on the environment. All of our group members were trying to collect trash and carry it with ourselves and some of them went to the lengths of asking other tourists to clean their trash or not to throw away it. Fayunjie (day's destination) was reached just before darkness allowing enough time for camp set up. The dinner provided was so far the best one in China with spicy local specials without excessive use of oil (so often in Shanghai) and plenty of vegetables of various kinds. The food during the trip was of very good quality and unless new symptoms will show up in the upcoming days, relatively safe. After the dinner I had the honor to experience Korean army shower (after refusing to shower for the second day in a row next to local shithole - this is China). Besides the most gayish thing I have went through up to this day, it is very useful tool to keep your pants dry while cleaning your upper body (hands down, Korean army got hygiene figured out).

Day 4: Night was cold and morning was even colder with most of us developing sore throats during this night and thus partially ruining my joy of capturing the sunrise in the Wugong shan (a really beautifull event). Fourth day was the toughest (environment-wise) of the trip. We walked for c. 17 km in thick jungle up and down the hills. I have to admit that I was slapped by tree branches more than by my father during whole childhood :) As we were unable to refill our water supplies during the day by the evening we were thirsty like drunks with terrible hangover after long long night. Anyway, when we discovered the mountain hut providing soy milk to passers-by, our flock literally destroyed their supplies (who would not when it costs 1 kuai and is melanine free :) ). Some of us also refiled our alcohol supplies (which were non-existing up to that day) envisioning humble celebration of our last night in the hills. Upon reaching our destination (Yangshimu) and building our tents we performed this while playing card games and discussing dangers of drinking water in Shanghai (e.g. you should not drink tapped water at any costs - although filtered for solid particles it still contains heavy metals - therefore our Association of international experts recomends Nongfu Spring).

Day 5: Last day of our hiking trip contained descent from Wugong shan range to the civilisation. After two-hour-knee-shattering descent of "stairs to heaven" - a concrete manmade stairs which were built for tourists acending the mountain and which we took in opposite direction - we visited hot spa (compared to places we lived in past four days, a steril clean place). During our journey to train station we were notified by our handlers (hired powers) that there are only five tickets available for us and thus we will be forced to buy these tickets at the train (we were assured by them that they will handle it and will help us with their purchase). Eventually we boarded the train with tickets for next stop and paid surcharge upon arrival to Shanghai (this is China). When road from Shanghai to Ji'an was an Experience than our return journey was THE EXPERIENCE!!! I was already warned that travel during Chinese 7-day holidays is generally not recommended. While on the way to Ji'an I can safely estimate that for each 100 seats carriage 130 tickets were sold (forcing significant number of people to stand) on the way back for each 100 seats carriage we can estimate 160 tickets sold (Sunday was the last day of holiday). Entering the train is basically possible by pushing (literally pressing your way in) people in front of you into the carriage and wrecking havoc inside. There could be seen people sleeping underneath the seats (which is btw really smart idea as there is plenty of space) and people standing or sitting on the floor for 12 hours during the night (among others also our group). On the other hand, we experienced something what I would not expect in European trains. Unknown people offered to share their seats with us (eventhough only for several hours, a gesture deeply appreciated and for which we are still very gratefull) or squeeze to make room for some of us (absolutely amazing niceness of Chinese people). This is China.***

Monday after: Unfortunately I have to report that my previous statement about smog levels similar to Prague and other European cities got shattered this Monday. Today was the smogiest smogfest I have ever seen with the visibility limited to 500 meters and smog hanging over city preventing any outdoor sport activity. Hopefully this will change quickly and pre-hike levels will be restored.

Anyway, I have to admit that this trip showed us real China - considerably different from Shanghai. Enjoy!

Note: * week-long vacation means literally 7-days holiday. Usually besides national holiday (1 Oct - Wednesday) two off-days (Thursday and Friday) are provided to employees. Furthermore, additional two off-days are switched for weekend preceding the holiday (this year it was Monday and Tuesday - 29 and 30 Sept). The same principle is applied during Spring festival.

** for clarification and future use this blog uses definition of mountain as follows: Mountains is a landmass that projects conspiciously above its surroundings and reaches altitudes of more than 2,000 meters above sea level. Anything else is just hill (sorry my Czech friends :P ).

*** for those really really slow: TIC stands for This Is China.