American soft power?

Yesterday was my performance at the Chinese Students & Scholars Association Lunar Splendor at Skirball Center at NYU. The show went very well. However, I had very long periods of downtime, in which I was able to finish this fascinating book.

It's called Confessions of an Economic Hitman, and it's by John Perkins, a quasi engineering consultant who worked covertly for the NSA (National Security Administration). His job was to go to countries like Ecuador, Indonesia, Saudi Arabia, Panama, Iran, and others, and convince them to take on loans that they could not afford in order to speed up their "modernization"process. The United States and the World Bank would provide these countries with those loans, at first, and then they would feel obligated to return the favor with political benefits (oil grants, trade exclusivity, democratic politics, etc)

Perkins makes the argument that yes, while a lot of these economic deals were struck to keep these countries from communism, they were also done to promote the opportunities of America's "military-industrial" complex, a loose term that refers to the many engineering, construction, and military companies in the US that focus on essentially taking over a country and making them reliant on America.

As a forecaster, Perkins was told to make as optimistic of forecasts as he could, so that the US Treasury would approve, and so that after the two governments met, they would hash out a deal that would often bequeath Perkins' company a lucrative contract. But by doing this, he simultaneously subverted the native population into "modern slavery," which he compares is just as horrifying as the more historical versions.

Why? Because these people have no other options. I was talking to my friend yesterday and she mentioned how these countries, while poor, and knowing that they were getting themselves into a debt that they could not repay, had no other alternative. They HAD to do this in order to get themselves out of poverty. If you try to fight against America, you get labeled a communist, a fascist, a drug dealer, a renegade, etc, etc - and you will be ostracized by the rest of the world at every attempt, suffering from trade embargoes and the threat of potential invasion.

And there are no other economic opportunities for these countries to modernize. But they do it with the understanding that, despite all of America's promises, they will still have large levels of poverty, unrest, a widening rich-poor income gap, and tremendous amounts of debt. They know that in this world if you're against America, you're going to get screwed.

Subway's improving

Over a period of time (within the past 2 years) I had this dislike for Subway and its sandwiches. Maybe it was because of the perceived low quality for it, or because the servers are so rude when giving you food. They will toss food onto your sandwich as if it was the trash pile, and then ask you caustically, "want chips and soda with that?" To which I say no, just a cup for water (cuz I'm cheap) and they would just stay there and glare at me.

But today I went and wow I was impressed. The service was as terrible as usual, but I ordered something I've never ordered before - a footlong Seafood Sensation on their new Flatbread. After adding lettuce, tomato, banana peppers (I'm obsessed with these things), olives, onions, and Chipotle Southwest Sauce (a MUST have for any subway sandwich) I soon bit down into one of the most delicious sandwiches I've ever tasted. The flatbread is an amazing complement to their sandwiches, much better than the other ones. And putting the Seafood Sensation on the 5-dollar footlong is definitely a huge bonus.

Funny enough, there's also a "free lunch" Entourage promotion going on right outside our building. I was tempted to wait there at first (they have some Italian Street Food) but honestly the wait - about 35 people, and the slow service, made it a half-hour wait for some free food that would cost around 5$. Now for someone like me, 5$ is a lot because I don't earn any money. But I still thought, ok, I'm at work, I should focus ON work. Not try and wait for free food.

When I get a real job, of course, I won't care about what I spend on food. I know I won't indulge myself too much, always being frugal, but I will relish the ability to not care if I spend 5 or 7$ on lunch.

Unfortunately, that time does not seem to be coming anytime soon.

Chilling with KTV

I'm at my trading internship right now, and it's pretty funny - our head boss, who's Korean, brought some of his Korean television friends in, and is apparently doing a segment on his company. While I think it's a wonderful idea for publicity, I think it's quite funny that they are doing this segment in the middle of the workday. (Then again, it IS a Friday).

I never imagined that this hedge fund may one day become big, but I sincerely hope it does. The CEO of this company is very nice and has helped me personally many times with my trading. I somehow hope that I can continue trading but unfortunately a series of setbacks have caused me to be less confident than before.

Furthermore, almost everyone from the first class of interns, have left. I'm one of the few left. That makes me kind of depressed - seeing all this new blood, while interesting, also makes me feel old. And a failure, since I didn't really get anywhere except to lose more money.

But what I've decided to do lately was start a new spreadsheet that documents my analysis of each currency, so that I don't forget about it later. Hopefully this will work and help me become more entrenched.

Aston Martin or Porsche?

I'm not a big car guy. In fact, I HATE car analogies. I hate those cocky salesmen who come up to you and say, "let's say you're going to a car dealer. You see a Ford and a Ferrari. What would you rather get?" Maybe that's a good way to sell your product to someone else, but definitely not to me.

I'm not a big car guy. I never knew what a Maserati or what a Bentley was. All I knew was that the higher the MPG, the less you'd have to pay in terms of gas costs. In terms of how smooth the car drives, or how fast it can go, or how sleek and cool it looks... I really don't care.

So if you didn't know, what I do at my Wells Fargo internship is simple - I cold call. Haha, funny right? Cold-calling is one of the most ridiculously hard jobs in the world. Not because it's inherently difficult to do (which it's not, you just have to read a script), but because the mental pressure and anxiety over being rejected is sometimes so oppressive that you can't even pick up the phone.

Anyway, this post isn't about cold-calling. This is about this one conversation I had with this hotshot real estate broker once upon a time. I called him and told him about us, and I told him, we specialize in real estate agents. He said, that doesn't sound appealing to me. I said, you may not have a lot of money right now, but maybe 5 years down the line when you're earning a ton, you'll going to need someone to manage your money. He said, how do you know I don't have a lot of money?

Turns out, he was the real estate agent who brokered an entire office for Paulson & Co, as well as doing some other hotshot deals. He asked me, "what's better, an Aston Martin or a Porsche?"

Everything screamed at me to say Aston Martin, because it simply sounded more luxurious. But since I had never really heard of Aston Martin, I said Porsche. Then the guy hung up on me. That really pissed me off that day, because I had spent over 10 minutes on the phone with this guy, and I really thought he was going to be a lead.

I told my boss about it and we had a good laugh about it afterwards. My boss loves guys like that. He can actually get along with them pretty well. Fast forward a few weeks (almost a month), my boss one day calls me out of the blue, and says,

"Hey, Lionel, Maserati or Bentley?" I said, "uh....... Maserati?" He said "Are you sure?" I said "uh... no, maybe Bentley." He replied "You can't give me two. Choose one." Finally I said, "Ok, Maserati." He chuckled over the phone and said, "that's right, guess who I just called?"

I laughed. "Our friend over at ____?" "Yea, I called him, and the first thing I said was 'Ferrari or Maserati?" Turns out the guy actually had a good impression of me, and he told my boss that he wants to meet.

That phone call made my day. Just goes to show you, never give up on a lead, even if you feel like there's no hope left. People are more affable than you think.

Now, I'm just as hard on other salespeople as that guy was on me. Honestly, if you're a sales guy, you gotta be able to relate to the person, and make them feel like you're on THEIR side.

Like for example, yesterday, I was talking to some Verizon FiOS people who were in my building. They had recently installed the service and were ready to open some accounts. So naturally I went up to them and said, "What's the lowest price you have?"

They said 55$ per month for 15MB D/L and 5 MB upload. I said, that's too expensive. Then this salesman comes out, and obviously, tries to convince me. He asks me what I have right now. I said, Time Warner Cable, but it sucks. He nodded knowingly, and said, "Let's pretend you're going to a car shop. You see a-..."

I stopped him right there. I said, "I HATE car analogies." He took a different track. He used another terrible analogy that I simply hated, and then he said, "it's only 22 more dollars per month than cable." I asked him, how much is that per year. He didn't know. He had to take out a calculator to do 55 * 12.

Now, I'm no math genius so I wouldn't be able to do that calculation on the spot either. But as the sales guy, shouldn't you know off the top of your head, what that # is? You should spit out that 660 the minute it's asked.

So he asked me, what is my major. I was wearing my work clothes - dress shirt and suit pants. What major do you THINK I would be in? He said IT. Clearly this guy doesn't know jack. He asked me where I'm from. I asked him, what do you think? He said, I don't know, California? I said, no, I mean, what ethnicity do you think I am. He said the stupidest answer I've ever heard. "American?"

Honestly, have you never met an Asian before?

So I was hard on him. But honestly if you're going to be that much of a slacker when trying to sell someone, not even being able to figure out what they do, what makes them tick, and have to resort to using cliche car analogies in order to make your selling point, then you don't deserve my business.

Video Game Addiction

Today I was reading this book called "Unplugged: My Journey into the Dark World of Video Game Addiction," in which the author, Ryan Van Cleave, talks about his experiences playing World of Warcraft.

As I used to play World of Warcraft with the same addiction that he did, I wanted to read this book because sometimes reading about other people's experiences is easier than coping with your own. I am struggling with the addiction to another game right now - League of Legends, which unfortunately, is just as fun and exciting as WoW.

Even as I write this right now, I'm still thinking about, how to build my latest favorite champion. I have uninstalled and reinstalled this game countless times over the past few weeks - every day I wake up wanting to play again - I reinstall it, and then, after hours and hours of continuous playing, I feel terrible, and before I go to sleep, I uninstall it.

Unfortunately for me, it's too easy to reinstall. So I keep going back to it, despite hating myself and telling myself, no, don't go back.

Video Game Addiction is like drug addiction. So many people have compared games like World of Warcraft to crack. But here's the difference between the two: World of Warcraft, and other games, are easier to get. And even better - they're not illegal.

Meaning, to get crack, you're constantly under the pressure of having to shell out more money, get caught by the police, face family and societal pressures, etc. With WoW and LoL, all you have to do is pay 15$ a month (or in LoL's case, it's free), and it's completely legal. It's even encouraged by some of your friends and family who think it's a cheap way to spend a night (rather than dump 25$ to go to a bar and get drunk).

Unfortunately, these video games turn you into a monster. They turn you into less than a human being - where you begin to care about nothing else in life except for these games. That is the exact same thing that the drugs do to you, yet this is not drugs, this is a computer game.

So I am ashamed. I feel ashamed to talk to my friends, to talk to my family, because I feel like I'm inadequate. I have struggled with video game addiction for the past 10 years of my life. From Starcraft to World of Warcraft to Puzzle Pirates to Counterstrike to Final Fantasy, unfortunately, when I start playing a video game, I forget about all my relationships in life. I begin to treat that video game as the most important relationship in my life.

This period of time is the most critical for me. As I have stated before, I am trying to find a full-time job for next year. But how can I find such a job if all I am focused on all day is how to defeat the next team in LoL?

Global Economic Updates

So one of our senior traders is talking again, and I will analyze some of his comments.

One of the articles we're looking at is that foreign central banks are cutting holdings of U.S. Agency Debt by 7% this week. While equities have been great (with all the acquisitions), the greenback has been falling badly. This, along with concerns that the U.S. government may hurt mortgage bondholders by boosting home refinancing options, have caused foreign investors to reduce their holdings by about 57 billion.

In terms of commodities, wheat has been going up. Oil is up. Commodities Research Bureau and the other commodities indexes are all breaking out. US weakness has resumed. Dollar Index is around the 81 level, but cannot climb further up. Housing is weak as well.

Tomorrow is FOMC meeting. Investors are concerned about this because there might be monetary policy that will affect the dollar. Chances are the Pound and other commodity currencies will jump if nothing serious is changed (given the weakness of the dollar).

CPI has shown some inflationary signals, but is not good enough for the dollar (given that the government is wary of raising rates anytime soon).

Sentiment that if the Fed begins to hint at quantitative easing, it's not going to look good for the US dollar. QE, again is just printing money, which has incredibly negative effects on the dollar (as it did for the Yen). Obviously, if Fed raises the rates, it'll be good for the dollar. But first thing that will happen is the equity markets will tank.

So Fed is in an incredibly tough position right now. If it keeps its rates at this place, foreign governments will continue taking money out.

One of the other articles that we're looking over is that US Pensions are massively underfunded, and trying to forecast 8% returns despite only being invested in 6% long-term corporate bonds. The article asks where is the other 2% going to come from. However I will assume that they, like every other pension fund out there, believes that their investments will appreciate in value. However, the opposite could happen as well, so perhaps 4-8% is more accurate of a return.

Franc is going crazy right now. CAD is in danger of going down because of the weak CPI and its close correlation with the dollar. AUD is still trending higher based on good economic data and high interest rates.

Strong currencies: AUD/CAD/NZD

Weak currencies: USD/JPY/GBP

Unknown/Random: CHF/EUR

Success and Failure

Recruiting for a full-time analyst position at a bulge-bracket bank is incredibly hard. No wonder there are so many folks out there who have been disappointed again and again in just trying to get an interview at these places (I'm talking about GS, MS, JPM, Barclays, WF, BaML, etc).

My plan starting from high school was to enter one of these banks and make 120k within my first year. Plan? More like dream. I did not work hard enough over the 4 years of college to deserve myself of this honor.

Many of my classmates will be entering the workforce come this spring, and believe me some of them WILL be earning 120k. They have worked incredibly hard - one friend I know, started out in CAS (the liberal arts division of NYU), and stayed there for 2 years, and then transferred to last year. Then he got an internship at JPM, and bam, he gets an offer and he's set.

Am I attributing his success to luck? Definitely not. I was lucky, I got into Stern immediately rather than having to risk/work my ass off for 2 years just to be able to get into the business school in the first place. But he took his situation, and instead of whining or sulking about it, he instead doubled-down his efforts, and voila... here he is.

On the other hand, what am I doing... sitting in this cold hedge fund, trying to blunder my way through the FX trading world, without any mentor to really guide me. (Yes, there are senior traders who talk a lot, but they don't have time to focus on me specifically). If I was working at JPM it would be a different story.

But who am I kidding? This is just a temporary situation. I put myself into this, by repeatedly playing games over the years, and not working as hard as I should have. Instead of studying for my classes I was playing games, watching TV, or doing music. Nothing wrong with any of them (especially doing music), but if your goal is to get a full-time analyst offer at one of those bulge bracket banks, wasting time on other stuff is simply... stupid.

And yet, I can't deny myself the sinking thought that maybe this isn't the correct area for me in the first place. After all, I've always wanted to be in music. When I ask myself at before sleeping, what is my dream, the first thought in my head is, I wish I could be a professional composer. And when I wake up, the same thought crosses my mind.

Is that why I can't be in this field, or is it because I haven't tried hard enough? Regardless, this period of time (September-early October) is the most crucial time for me to FOCUS. It's funny, I spend 3 years preparing for this, yet it's during the most crucial moments that I falter and begin to wonder if I made the correct decision.

I just have to try my best. Get a few interviews, and go into those interviews with my head held high and a smile on my face. I shouldn't be scared of failure. Failure is never something to be scared of, but regret is.

It's far better to work your hardest and realize that you simply weren't good enough, than to not try hard enough and think that you could have done better.

Commitments

I made a commitment a while ago to join this Chinese lunar festival show. I agreed to help out by playing the piano, and perhaps arranging a piece.

Yesterday, my mom called and asked if I could go back home (to Maryland) for the Lunar Festival. She said that my cousin, who I have not seen for a long time, will be flying back from Berkeley, and that she wants me to be there too. After all, in Chinese culture the Lunar Festival is a period of time where you celebrate being with your family.

Unfortunately, I had already made a commitment to this Chinese show, and I think the directors are relying on me to get my end of the deal held up. So I told my mom, sorry, I can't.

Sometimes you make a commitment and you wish you hadn't. I do that all the time. It's one of those things that just eats away at you. For example, let's say you marry. 5 years later, your marriage is in shambles and you're filing for a divorce. Both of you are wondering why you made that choice, that commitment, which ate up 5 years of your life when you could have been finding someone better.

Maybe that is a rather cynical view of marriage, but I feel like making commitments is something that a lot of people (including myself) take too lightly. Let's say you make plans to get dinner with a friend one night. That day comes, but then another friend (who you like even more) asks you if you want to grab dinner, so you cancel on that first friend. After all, who cares about commitments, why not do whatever you want?

I used to think like that. I would break off commitments just so I could do the thing I wanted to do most when I felt like it (I'm a very spontaneous person). But then I realized how terrible of a habit that is.

Breaking commitments shows people you have no respect for them, that you have no backbone. That you aren't reliable enough to be held accountable to your word. Your word means nothing.

Of course, you may never see that person again (and believe me, they'll never want to see you either), but that kind of habit eats away at your soul and eventually turns you into this sporadic person that no one really can trust. Once you're that person, you'll lose everything.

So if you don't think you can hold your end of the bargain, don't make the deal/commitment. It's better to say no, than to later cancel because you had something else come up. Of course, that "something" may be an emergency, but most of the time (and we all know this) it's something that is totally irrelevant.

Rules and careers

I was thinking about my career today (or lack thereof). As an entry level graduate, I pretty can choose any path in the world - but since freshman year, I chose the finance path. I always wondered, was this the right choice for me? After all, finance is certainly not for everyone - especially the more aggressive forms such as investment banking and trading.

Throughout the years I learned that finding a career that suits you really depends on some key aspects of your personality. I'd like to talk about one of those aspects today: your inclination to either follow rules or break them.

Now, I'm not talking about the middle school vagrants who chewed gum despite being told not to do so, or talked loudly in the back of the class during lectures. These kids were not "breaking" rules - they were not following them. They were being disobedient. That is an issue of character, and does not apply to what I'm talking about.

What I mean by your inclination to break rules - or "norms," is when instead of doing something in one fashion, you choose to try something new. For example, let's say you're working on an essay for your English class. Merely disobeying the rules would be to go to one of those "pay for an essay" websites and get someone to write for you. But breaking the rules would be, instead of writing an essay, you write a short story.

So why did you do that? Maybe because you felt like, an essay could not convey your point of view as well as a fictional story could. Maybe because you felt like the confines of an essay are too limited for your expanded mind. Maybe because you'd rather have an entertaining piece of work to read, rather than a boring, drolling, 5-form structured AAPL approved piece of student trash that no one else would ever read besides your exhausted teacher who has to read over 120 of them.

Do you see what I mean? The kind of people who would rather write a short story than an essay are the type of people who are inclined to "break" rules rather than follow. And let me begin right off the bat - if you're this kind of person, you should NOT be in finance.

Finance is all about following rules. There are a ton of conventions to follow when pricing equities and calculating profits and figuring out the bid-ask spread. Bankers usually leave the rule-breaking to the academics, who then create new rules for the Bankers to follow. If you love following rules, you should be in Finance.

So now you're wondering, wait, Lionel, did you say you're in Finance? But you like to "break" rules? What are you going to do?

I honestly don't know. This is why I am thinking about just going into Sales. Sales is an aspect of banking that is much more client-focused than the other sides, and some creativity is encouraged rather than suppressed. But honestly, if I had to choose another career, I'd much rather have chosen music.

Because in music, you don't follow rules. You break them and people cheer you on. But in finance, when you break rules, all you do is lose money.

Lesson learned.

Film Music

It is my opinion that John Williams' music is 2-3 levels above everyone else's. Don't get me wrong, the other composers write fantastic music, and a lot of it is emotional, intricate and poignant. But in terms of complexity, I don't think anyone's music compares to that of J Williams.

A huge part of music is all about managing your audience's expectations. The challenge for a film composer is to understand what the audience is looking for, and then go one to two steps ahead of that. Meaning, if the audience is expecting an ominous theme, then the music written should not just be ominous, but fearful. I can't really put it into words.

What always amazes me about JWilliams' music is that it radiates form and structure, despite the fact that he eschews the usual chordal forms. It is erratic, it is shocking, and at times it just plays into your soul and makes you wonder what kind of magic is out there.

(BTW, I am listening to one of JWilliams' soundtracks right now - http://www.youtube.com/watch?v=tztuGMPLAmI)

A lot of film composers are good at writing music that "fits" the ambiance, or is emotionally beautiful. That's great. But JWilliams' music is an entire new world in itself. Some of the musical theory he uses is so intricate, and utterly brilliant.

Let's take a comparison soundtrack, for example. Everyone always compares JWilliams to Howard Shore, because HShore has some of the most epic music (in LOTR). But when you listen to HShore, you think, I could write that. The music has a lot of chordal symmetries, the instrumentation is excellent but not mindbreaking, and the structure of it all is quite comprehensible to the human ear. Do you guys see what I mean?

I'm not trying to undermine HShore's music. I'm just saying, while it is extremely beautiful, the structure is clear and there are patterns that begin to emerge (such as a timpani emphasizing the beats, or the lower strings providing a significant bass, or the upper strings holding the melody).

These patterns are great but they make the listener too comfortable. When you're listening to JWilliams, you just don't feel comfortable... you feel a hidden energy in you that you never knew existed.

What makes a good book?

Honestly, I don't read as much as I would like to. I used to be a huge fan of Harry Potter - and by huge, I mean, crazy. I read Harry Potter fanfiction every single day for a period of time, sometimes staying up all night to read stories written by other people about J.K. Rowling's universe.

What an amazing experience, growing up with Harry Potter in your world. Back then, it was the greatest thing that ever happened to us teenagers - we happened to be the same age as HP, and it was almost like, we were growing up together in two separate worlds, but there was that connection.

I've always felt the HP series encased something much more magical than just a good story/world. Many critics have criticized it for not having enough "character development" (i.e. the characters' maturities levels do not really improve over the series). But that's just one part. I feel like what Rowling does well in her book is that she makes you actually care about what happens. Meaning... is the evil bad enough? Is the good humble/likable enough?

Too many books have their main characters be completely absurd - i.e., even though they are fighting for a good cause, they frequently have selfish outbursts, and periods of deep self-contemplation that seem to excel all reasonableness. Eventually you start thinking, jeez, when are you going to get over your friends' death and start saving the world already??? We have a certain expectation of book characters, and honestly if they start to perform outside our acceptable limits, we start feeling annoyed/apathetic to what happens.

I'll give you guys an example. One of the more recent popular series is Suzanne Collins' Hunger Games series. Now, while it is a good book, there are just so many things wrong with it that bring it far below J.K. Rowlings' masterpiece.

(spoilers ahead)

First of all, the main character Katniss is too headstrong. She randomly does things that are completely absurd (such as running out into an open battlefield) or trying to fall in love with two guys at once. This is simply too much for the reader to handle... choose one guy and move on! We don't need to see you squibble and squabble for three entire books trying to figure out who is right for you.

And even though she is given the task of being the Mockingjay (the symbolic leader of the rebellion), she continuously questions it. I get it, you find it hard being the leader of a movement that in itself has questionable issues. But sooner or later you just get over it and do what you need to do.

All this nig-nagging has a hugely detrimental effect on the reader's enjoyment, and finally, the quality of the book. At many moments I just wanted the story to end, and I forced myself to keep reading. Instead of taking the moment to savor every page like I did the HP series, instead I found all the emotional hubbary to be simply unbearable.

I get it. There's a lot of pain, and a lot of suffering. But you don't have to PORTRAY it that way. Even in the HP books, when evil was looming above everyone's shoulders, Rowling managed to keep you hopeful, entertained, and looking forward to the next page.

This quality is in my opinion what separates a good book from a GREAT book. Screw the usual critics' notions of character development and innovative plot twists and moral and ethical themes. These don't matter nearly as much, as the simple ability to keep the reader turning the page, have them become enveloped into the story, and wish that it would never end.

Every book has moments where it can do that, but only the truly great ones are able to hold your attention and keep it.

China Vs. United States

Noah (the head trader) and another trader in my office are having a very interesting conversation. Regarding North Korea, the other trader (I don't know what his name is) is saying, why does US need North Korea? Both China and US need North Korea, because US wants to have a presence in Japan and in South Korea, and without North Korea as an enemy, those two countries will refuse to be allies with US and allow US to keep a military force there.

It's a lot like what my dad says. US has to have a war in order to continue economically. He says that with the deficit growing higher, there is little chance of increasing the money supply in order to boost the economy. So either suffer a double dip - or start a war, which will boost profits in the short-term.

However, I think this idea has faults. The deficit itself is only bad if the USD loses its status as the world's reserve currency. Until then, no one will stop investing in T bonds, and the deficit, while high, will still be relatively harmless compared to what is happening in other countries.

If everyone has their own nuclear bombs, it's not in China's best interest either that North Korea to have Nuclear Bomb. If America leaves, then NK will get these capabilities. Therefore, both of them want America to still be in North Korea, and stay the way it is right now. The US is also cooperating with China right now, because they don't want the situation to escalate.

China is in an unique spot right now. Environment, one child problems, corporation corruption problems. They are quickly growing, but they have to take care of their own disputes. According to the trader, China's thinking is still in the Qing dynasty. Same with the USSR - all the people born before the Communist party, still have the same ideas and concepts. Only the new, younger generations can eventually change the world.

China's operations in Africa - they are currently a "force for good," according to Noah. China is building a lot of infrastructure in Africa, especially for very cheap prices. However, with such a huge footprint in Africa, they get nervous about foreign influences. In Zimbabwe, there was a strike because the mines are owned by the Chinese - and according to Noah the Chinese just started shooting everybody. So everyone is thinking how about what happened in the past (15-20 years ago), where China had no human rights. However, it is also that without China, Africa would not be where it is right now. US and Europe still do not have markets in Africa because of logistical reasons, and therefore the introduction of China is critical for Africa to grow.

In terms of food, all countries HAVE to produce their own food in order to survive. They cannot allow their food supply to be relied on imports. 2% of America produce food for the entire country, and they are subsidized because of it. Even though people have been moving into cities in all countries in the world, without food production a company simply cannot survive. Same with energy - you do not want to import your energy from anywhere else.

As a Kenyan, Noah has a very unique perspective on all the geopolitical events that are occurring. There will be a geopolitical shift soon, and time will only tell.

The rich-poor gap

I've been blessed. You've been blessed. The fact that we're able to be on the internet right now posting our own thoughts, means that we are more blessed than 60% of the world right now, who don't have access to internet, who don't have access to computers and other luxuries that we take for granted.

I'm always dogged by seeing poor people on the street in NYC. It's like thinking, wow, what if I were in his/her shoes? When someone asks me for money, I always feel terrible not giving them any (because I am quite poor myself). But I want to give them money. I want to give every beggar I see something.

I think about the people in Africa and Asia, some people who do not know whether their next meal will come or not. Well, in a lot of places economic growth has really been recovering, but regardless, it's still weird seeing someone who you know has never flown on a plane in their entire life. Imagine that, being stuck in one place for your entire life... it's depressing to say the least.

Sometimes the fortunes of other people in America itself makes me feel bad. People who lose their loved ones, their children, their friends, their homes, etc, they have suffered misfortune and I feel bad as a result. A lot of people equate suffering with the fact that "God" does not care about us, but I don't think that's the case. The reason why suffering is so prevalent among everyone is because our expectations are too high.

We frequently see media portray life as some kind of party, where everyday is filled with all the pleasures of the world. Unfortunately, when we see our real life, we feel depressed that it does not mimic that of the media world. In that regard - I feel less bad for the people in Africa and Asia, than I feel for the poor people living in America. Why? Because those in the poor countries usually are not subject to this sort of mental torture - seeing someone live a life you wish you had - and they cherish their lives. They are much happier because of it.

Meanwhile, in the "land of opportunity," it's always a question of, am I doing better than that guy? Am I succeeding? Am I happy? These kind of questions are some of the most depressing questions, because the answers are rarely positive. Instead, why can't we focus on "am I taking care of my family?" Or "Am I being a good person?" These kinds of questions are much better, and will make you happier if you focus on them.

So the rich-poor gap may be there, but guess what, it actually doesn't mean that much. People's happiness is not dependent on their money, but rather on their expectations. How they manage those expectations will determine how amazing their lives are.

And everyone's life is amazing. Let's just face it. It's a magical thing to be alive.

US Economy Updates

So this week was a very important week for the US economy. A lot of economic indicators came out - Trade Deficit, Beige Book, TIC, Unemployment Rate, PPI, and CPP. According to one of our head traders George, all numbers are pretty positive. Surprising huh - a week of good US economic data! Since mid-June, first bit of solid, good US economic data. Of course, elections are coming, all numbers will be revised, and the future is unknown. I personally think fears of a double-dip recession are too paranoid... HOWEVER, there is a risk of deflation...

The relationship between equities and bonds, (when equities are going up, yields are going down) is converse. So according to him, the USD/CAD should go down because CAD, a commodity currency, will benefit from a lower yield. It's currently trading between the .99 and 1.07 range, an 800 pip range.

Next week he's waiting for the US dollar to make a move. If the dollar index breaks below the 80, then the dollar should be expected to depreciate.

Quantitative Easing - this is a concept that many people have been talking about recently. I always thought QE is what the BOJ did a few days ago. Inflation is good for the currency, and so how will the US government respond to deflation fears? George thinks all monetary policy pretty much sucks.

So his big thing is the USD/CAD if it steps out of the range, it's going to be violent.

Now, the AUD/USD - since the middle of August, it's had a very good run from .8770 to .9450. He thinks it's a bit tired at .9350, it's showing exhaustion. There's this mystery gap, that hasn't been filled - happened in the beginning of last week. Why is George worried about this? He wants to see it be filled before he goes long on this currency. Of course, with the carry trade back, it is a very tempting offer.

According to Alvin, one of the better traders here, he thinks it will dip back towrads the .9200 line before heading back further.

For the Euro, George thinks, if we have a complete disintegration of the dollar, then the Euro will keep going up. Otherwise, he thinks it will only hit the 1.33 level, with little chance of going past it. On the longer term, from the 1.18 level, made its retracement to the 1.31 level it's at now. Only way it can continue its bullish is if the US Govt is forced to do QE on their currency due to deflation fears. However given the CPP recently up, it is unlikely to see this.

So it is definitely a yawn right now on the EUR/USD. But we'll keep watch on it.

Currently the market sentiment is definitely favoring the riskier assets. However, next month's figures will truly determine if our market can take on more risk appetite (and therefore breaking out of a feared double-dip) or retrace back down to mid-year levels.

George's recommendations is that Yen and Franc are both risky because intervention is very scary for all parties involved, and George does not want to be surprised. I happen to agree - when there's a 50-50% of something happening, it is too risky to trade (better to trade based on breakouts, where you put a stop buy or a stop sell rather than a market/limit order).

What is really interesting is how much monetary policy affects the FX markets. I always thought the economies of the individual countries are important - they are, of course - but the governments' decisions have much more of an immediate effect. Quantitative Easing - one of the CB's primary tools of increasing the money supply (i.e. printing money). This can be either sterilized - with the government choosing to put some money into treasury bonds and reserves, or unsterilized, where all the government does is print money. A lot of traders currently think that the BOJ will only print money unsterilized, to prove to the market that they are serious about depreciating their currency.

Why would this QE work for Japan, but not for the CHF a few months back, when the Swiss NB tried to depreciate their currency? This is probably because first, while both are unilateral moves by governments, Japan has very little inflation, which means they have a LOT of room if they want to depreciate their currency. Second, the Japanese Yen has been rising for a long period of time, and the market sentiment is that the Yen was already overbought. Therefore, by selling the Yen unilaterally in the market, the BOJ can show traders that they are serious.

According to Alvin, he would rather go with the BOJ, sell the Yen (meaning go long on the USD/JPY pair) for the short-term, because it is unlikely that we will see traders muster up a huge move in such a short period.

Moving to the cable (GBP/USD), all economic indicators for the GBP are down. However, movement on the pound was much more positive than the EUR/USD. For example, the GBP/USD retraced to the 38.2 Fibonacci level since their low, while the EUR/USD retraced to the 50 Fib. level since their low. This bullish sentiment is actually quite strange because the British Economy is having many problems.

But go Bullish on the pound? I would not recommend it. George does not say he would recommend it either. However, there is STILL risk appetite in the market, and it is supporting the EUR/USD and GBP/USD at their current levels. He predicts that they will both go up 300 points, form a double-top and then collapse. Sounds like a perfect situation?

While there are no true sell signals, the market sentiment is definitely in favor of these two currencies.

Money issues

I have a total of 5$ in my wallet right now. I have 90$ in the bank. I have 400$ in credit card debt.

I feel so poor. But what can I do? My two internships - one at this FX-trading hedge fund, and one at Wells Fargo, both don't pay anything. They are all performance based - meaning, if I trade well, and if I get my boss clients, then I'll get a commission. Unfortunately however, my performance has been... lackluster...

I'm tired of asking my parents to pay for my credit card. This is just as hard of a time for them as it is for me. They are saving on everything, and have been for the past 4 years. Sometimes I wish we never moved to our huge house, which we bought practically in the middle of the housing boom (now it's down about 10% in value). That way at least we'd have a lot more money to spend on food, clothing, electronics, etc.

Do I miss my old house? Yes I do. But no use crying over spilled milk.

Money is so hard to come by. After I finish this full-time recruiting season, I'm going to work hard to find a paying internship, regardless of whether I get a full-time offer or not. I need the money. In the mean time, I'll try to not to get any interest on my credit card.

Games... the horror!

As any male of the Y generation knows, computer gaming is the MOST interesting you can do by yourself. And with the inception of online gaming (since 1995), playing with other people on games such as World of Warcraft, Ultima Online, Everquest, Starcraft, etc, can be fun and eternally addicting.

When I was little I remember, being obsessed with a few different games. Pokemon, Age of Empires (1), these bubble-shooting games, this game called Oregon Trail (not the "you have died of dysentry" one, but the later version), as well as a few others I can't remember. Wow, those first early games weren't addicting, but they introduced me into the world of...

Starcraft. That's the first game that addicted me. At first, it was my cousin who played - and I loved watching him play. I thought it was so interesting, especially building the bases. When I was at my cousin's place I would frequently wake up very early in the morning just to watch him play. I didn't want to play myself, it seemed too hard.

Later though, I begin playing so much during the early 2000's. I played Counterstrike for a long time as well. Anything that was online, I played - Warcraft 3 (though not as extensively, since I wasn't very good at it). Oh, let's not forget the video games - I played Super Smash Brothers extensively, as well as a bunch of other games - Super Mario Sunshine, Final Fantasy X and XII, Magic The Gathering, and... other games I can't remember.

Then came Puzzle Pirates. Does anyone even know this game? It's a free online MMORPG that I tried in 2005... and wow, it took over my life for 2 years! I became captain of the largest crew in the "ocean," went frequently on "pillages" and was up all night. Sometimes my internet would break down and I would freak out because if I wasn't online, our ship would lose a TON of money. These were the days when I would go to sleep at around 5:00 in the morning, and wake up at 7 to go to school...

And then, came World of Warcraft. Wow. WOW. I was literally stuck in that world for another 2 years, although I did take a break in the middle from 2007 summer to 2008 summer. But for about a year I played WOW almost non-stop, first as a troll shaman, then as a gnome mage. Honestly I was never that good at it... but everyone knows that once you get addicted to something... you keep playing.

Heh. Now, I'm enraptured by another game. League of Legends. It's crazy fun. I was up until 4 last night playing it. Is it my fate to be playing these games for the rest of my life? Are these games the reason why I haven't achieved my dreams, and gotten good grades in school? If you asked my parents, they probably will say yes.

If you play games right now... no matter which one... just try and control yourself. Every morning I wake up, I get urges to just flip open the computer and game all day. It took a lot of self-control and discipline for me to come to work. But at least it's a step in the right direction.

Writing is fun. But what is more fun? Music.

I've already posted 3 posts today, and I'm going to keep posting. As I stated before, writing really works the mind. It forces me to focus my thoughts, develop them, and conceive them in a way that is clear and understandable.

For example, let's talk about my favorite subject - MUSIC. Usually, my mind is simply shooting off in a million different directions when I think about music. One really weird thing about me is that I don't listen to other people's music. While I do enjoy the occasional hip-hop song now and then, I find that the silence of my mind is much better company. Instead of listening to music, my mind will play back something that is both completely new, and sounds good enough for me to be satisfied. And sometimes my fingers will move along with that music... it is an eternal song, always playing, fading when I am focused on something else (such as writing, right now), but coming back full force when I am resting.

Music, in my opinion, should be meaningful. Meaningful - it's a vague definition - but it's the way I think music should be. It should also be understandable. And finally, beautiful. The combination of these three concepts means that the music can be enjoyed by the audience, no matter what style it is. Meaningful music can always find a place in this world - just look at the recent popularity in film score music. Understandable - the modern hip-hop, pop, rap, club music, they are all extremely understandable, and popular. Finally, beautiful - of course, it has to sound good.

So how do you sound good? First, you want the best instruments. Whether it's a voice, or a classical piano, or an electric guitar, it has to be tuned to perfection. The sound recording systems have to all be top notched. In fact, if you get the preparation to be top-notch, no matter what you record, it will sound good, I guarantee you.

Next, is the technique. I have a problem that is common among many piano amateurs - I bang too much. "Banging"- an unfortunately named term for when piano players do not relax their arms, and instead of playing firmly with their fingers, start using arm strength to max out the magnitude of the sound.

This unfortunately produces a rather unpleasant, sharp sound that is distasteful to the ear. Instead, use firm fingers, relax your arms, and let your music guide your body, not the other way around.

Mad Men

I've been thinking about this show for a while - Mad Men. It's a show about the 1960's, where a couple of advertising executives go through their daily lives. The character that strikes me most is Don Draper.

I love his character, and I think as an adult man, I should change my character to be more closer to his. Meaning, don't talk so much. Listen. Be serious. Respect others. Respect yourself.

Frequently when I meet people, or am hanging out with friends, I'll get very excited and begin talking a lot. It's not like I say anything stupid, but it's that I don't really have anything smart to say either - so a lot of what comes out of my mouth is trash. That kind of loses respect for me, and I know that other people respect me less after they realize that I don't have much good things to say.

Here's what I'm going to do. Talk much less and listen. I tried this the other day, and wow, the respect people paid me was much more than I had in the past! People listened to every word I said WHEN I spoke, and other times I would just nod and listen. Not talking is probably one of the best ways to earn respect from people.

I think it's also different for men than women. Women can talk all they want and they'll still be likable, funny, whimsical... interesting. If a guy talks too much... you lose respect for him, and he becomes boring. A man needs to be quiet. Strong. Internally confident.

Don't ever give your opinion if it's not asked for. Even if you are asked for it, it is better to give a neutral opinion.

Can this work? I will let you guys know the results of my personality "experiment" after a few weeks.

Have faith in your thesis

I'm sitting at this Hedge Fund that I work at - Forex Signs, Inc, and one of our head traders - Noah Muchai, is standing around talking to another trader about the importance of having faith in your thesis.

Based on books I've read, this is the most important rule in trading. People do not lose money based on following a system - people lose money because they stop following their system and start making erratic, hope and fear-based decisions. According to Noah, if the technical indicators in your system do not confirm, then you DO NOT enter the trade. Just don't do the live account, study it more, and make sure your own system... is secure, and that you BELIEVE in it.

Don't always be looking for a new system. Sometimes the older systems work the best. According to Curtis Faith (The Way of the Turtle) very basic breakout systems can work just as well as the newest "quant" and... what's that word... obscure? systems.

Can I have faith in a system? I think I should have faith... in the trending system that Ivy (this trader who worked with us interns during the first few weeks) taught us. It is very simple. Draw trendlines, have it match to at least 3 points. Bet into the trade only when it hits the 15% level of the trading range. Only trade in the direction of the trend.

Let's do it. Let's follow that. Don't try the breakouts or whatever. Just do that. And use Fibonaccis to confirm/restrain your trades (meaning, if it's going to hit an important fibonacci level, it's better to wait to see what happens)

Hello hello!

I'm back. I'm going to begin posting just my daily thoughts.

Jesus, recruiting is HARD. I haven't gotten a single interview yet after submitting my resume to companies such as Morgan Stanley, Barclays Capital, RBS (Royal Bank of Scotland), Bank of America- Merrill Lynch (BaML) and some other investment banks. But with a quite below average GPA (3.35) I'm scared that I won't even be able to get to the interview section!

What makes the GPA so important anyway? It's interesting. GPA shows the world how smart you are, how well your ability to synthesize concepts. With a low GPA like mine, it practically says, this guy isn't smart enough to analyze the global markets today. And I agree - I don't think I'm smart enough.

Which is why I'm working extremely hard to bring up my brain's intelligence level. How can I do that? There are so many brain exercises out there, but I think working on this blog is one way of doing it. Because your mind - your thoughts - they're always swimming around, thinking wildly, without focus, and only when you write, can you bring those ideas into focus.

So... wish me luck!! Next blog post will be up in a few minutes.