Years of Poems and Spirits

Watched the movie “Michael Clayton” tonight. Really enjoyed it: a simple story tightly developed into a brilliant thriller; Excellent casting, scripts and acting.

In terms of acting, we thought Tom Wilkinson’s stands out. I never saw his performance before but a five-minute dialogue between him and Clooney reminded me of Ian Holm in Joe Gould’s Secret. Very typical English stage acting IMHO.

Clooney wasn’t bad either. I liked the movie partly becuase I liked where Clooney is going: he is not afraid of taking on serious topics–topics that demand the “silent majority” to do some collective soul-searching. He is the “righteous guy” from the left and he is happy to throw in his fame and fortune at it too.

Is this Clooney’s new niche? I also liked Syriana. If that movie was a little too dark to be popular, Michael Clayton’s triumphant ending can certainly make a difference here (but I would act differently if I were him. $10 million is enough to buy a life, let alone truth).

One thing I noticed was that the villain in the movie is played by the only female character–is this Clooney’s view on gender equality?

Incredibly, I just read this story on WP: “A former Qwest … executive, appealing a conviction for insider trading, has alleged that the government withdrew opportunities for contracts worth hundreds of millions of dollars after Qwest refused to participate in [the evasdropping program].” Nacchio’s case was a high-profile one. It was all over the news when it came out. Now this new twist? Only WP put it on its web front page. No others mentioned it ever. Looks like NSA got everything covered now that Nacchio is allowed to leak the story.

Just read this article, “How China Turned Around A Dismal Air-Safety Record” on WSJ. After a slew of bad publicity of everything China, this article is a welcome relief.

Some quotes:
“Today, China is an acclaimed global leader in air safety. Despite frequent double-digit annual growth in the number of hours its airlines fly, their most recent fatal-accident rates are lower than America’s and Europe’s.”

“The combination of top-down mandates, aggressive enforcement and expert advice yielded results.”

“China has emerged as the envy of developing countries struggling with too many planes, too few pilots and inadequate airports. The FAA wants to use the CAAC model to help India expand its aviation safely. “

A discussion during the International Finance class got me thinking: what are China’s options with so much trade surplus?

We all know that at least 70% of China’s trillion dollar foreign reserves are in dollar denominated assets, mainly in treasury securities which yield around 4-5%. Take out the inflation factor, it is more like “deposit” than “investment”.

What is the alternative? Buying higher-yield securities at the expense of higher risk? It is easy to say but rather difficult to execute. For example, it is not a scaleable solution.

What else? How about buying capital goods from the U.S. (goods used for production) and produce more at home? For example, buying heavy equipments, high-end computers, etc. from the U.S. and produce more domestically. Instead, the Chinese choose to buy financial assets from the U.S., some of which will come back as FDI.

It is as if the Chinese are saying, we may have all the production factors–land, natural resources, labor, infrastructure, etc.–but we don’t know how to use them to generate returns higher than 4%. Therefore, we will give you the money and take just 4%.

It is a strange conclusion but seems to be a logical one. I asked the professor about the difference between buying financial assets and capital goods. I wonder whether it is the same as having the U.S. acting as a financial advisor/asset manager plus entreprenuer. I am not sure whether she got my question or not.