Thoughts on government bailouts:

In my personal opinion, we have seen four major government bailouts in 2008. The financial/economic consequences of the first four were an immediate rally in stocks, followed by market dislocations, a sharp decline in asset valuation, and rapid deterioration in broader economy. Below is a brief summary:

3/17/08, JPM took over Bear Stearns with government support, followed by a 75 bp rate cut the following day.

- Market reaction: DJIA recovered from an initial drop of nearly 200 points to finish up 21 points on the 17th. The subsequent rally was remarkable, across all asset classes, and lasted until June.

- Financial/economic consequences: False optimism regarding the length of the financial crisis, which in part fueled the height of the commodity bubble as dollar plummeted.

9/5/08, Government took Fannie Mae and Freddie Mac into conservatorship

- Market reaction: DJIA surged 290 pts on Monday, Sept 8, led by the bank index (+5.2%). 

- Financial/economic consequences: FNM and FRE's common and preferred shares remained listed but dividends are gone, resulting in billions of writedown among financial institutions holding their preferred shares. Directly or not, financial stocks were aggressively punished (yeah blame it on short selling) right before 2Q earnings release, leading to the collapse of Lehman Brothers, the broken money markets, and the downward spiral of AIG.

9/16/08 to 9/22/08, AIG was placed into government conservatorship; Fed approved Goldman and Morgan Stanley as bank holding companies; SEC temporarily prevented investors from short selling of financial stocks (in my opinion this one is the worst)

- Market reaction: a brief short-covering rally was followed by the sharpest sell-off of the year. S&P 500 declined more than 20% in the first 10 days of October. 

- Financial/economic consequences: Short-covering ban effectively shut down the convertible bond market, resulting in further writedowns across financial institutions.  A full blown financial crisis finally was inevitably extended into an economic crisis.

December of '08: Bailouts came into full swing with Citigroup rescue and government's loan to General Motors, Chrysler, and GMAC ... 

- Market reaction: Another sharp rally in December into year end, but wait a minute, the best performing asset class in December was in fact U.S. Treasuries ... and we'll get to see what happens in January.

- Financial/economic consequences: the next bubble to bust in this fiasco - U.S. Treasuries!

http://www.acconci.com/

Every once a while I need artistic inspiration to heal my soul.

Leaving behind a market that is falling apart, I escaped to this unknown building in Brooklyn, in search of a temporary shelter to lick my wounds. The studio speaker today is Vito Acconci, a prominent artist-turned architect that I had never heard of.

His frail body and aging voice added nothing but charm to his presentation. From a poet in the 60s to an artist in the 70s to an architect since the 80s, his works carry an amazing similarity of space and complicity. The twist and turn of his buildings, the hide and seek of his writings, the soft and harsh aspect of his installations, turned my emotions upside down.

One memorable building is his design for the world trade center. He creatively drafted a building with holes in it so that the terrorists won't need to target it anymore. And he filled the holes with resting area and parks. Another one of my favorite work of his is the twisting bridge in northern France, circling around on a river like a snake. I think the design turned constructions into a body, into a human being, into a choreography.

I began to finally realize that art is my lover. It truely has the healing power to ignite me, to seduce me, and to conquer me. I was turned on in my chair, thinking about lust and sex.

I said to my self: love might betray me, but the market and art will save me.

Wow ... I haven't written here for over 10 months now. Art must have disappeared in my life, replaced by the job change, fitting into the new environment, market turmoil, and all the headaches that come with this career in finance. Until today ...

When I decided to visit Diller Scofidio + Renfro studio with Guggenheim's YCC program, I had no clue what I was getting into. I invited Adrian along just because I hadn't seen him for quite long and wanted to use this opportunity to catch up.

It was freezing cold this evening. I walked ten blocks to the West side, sobbing over my threatened relationship. But when I stepped into Renfro's studio, the sky opened up in front of my eyes, on top of the west side Manhattan, and erased every piece of sorrow in my mind.

This is it! A setting that appeared for millions of times in my dreams that I was never able to capture. This is it! An architect so full of charm whose presentation turned my world completely upside down. This is it! A perfect marriage between construction and deconstruction, between innovation and practicality, between present and future. Both Adrian and myself grew fascinated with the architects' work and immersed ourselves into their creativity for an hour, an unforgettable hour at this important stage of my life, which re-ignite my desire to pursue this dream of mine. I had tears in my eyes.

Life takes sacrifice. My life is full of sacrifices that lead to bigger purposes that I believed in.

I looked around in the studio. Suddenly I felt that this place was so similar to the trading floor that I work on. Everyone is here to pursue a passion, a passion for something larger than life, a passion sucks in all your energy and devotion, a passion that might take years to materialize, if it ever materializes. But for those who are on this floor, they have no regrets. They are determined to exhange their lives and tears and soul and heart for an ultimate recognition.

I am taking a very interesting class on Contemporary Chinese Art at MOMA. Have been inspired/touched/disgusted by many works studied in the class, I want to leave some comments before forgetting.

*** It is almost impossible to discuss Contemporary Chinese Art without knowing Xu Bing, whose name is "spelled", or "signed", or "crafted" on the left.

Half of the Chinese people to whom I showed Xu's works hate him, as he created these calligraphy-like characters that are in fact, composed of English alphabet. What are they? Chinese? English? Both? Neither? These squary words mock the hell out of both Chinese intellectuals and Westerners with Chinese fever, in my opinion.

For this reason, I like Xu Bing. I don't believe the so-called political message hidden in his quasi calligraphy. "Words mean nothing if one cannot talk politics", "You can seal my mouth, but you cannot stop me from expressing" ... Oh give me a break! I like him because of his savvy, a brilliant

http://www.xubing.com/

There have only been a few of those days in my life, days when I was so touched by a thing that I completely lost myself on the streets, almost losing my life to a car. It happened this Monday, Dec 4, 2006.

It was one of my classes at MOMA, Tammy was too sick to attend. Same old crowd, same old 2nd floor exhibition hall, same old Warhol to start the discussion - the topic of the day was MOMA's Special Exhibition 2006, titled "Out of Time - A Contemporary View". http://www.moma.org/exhibitions/2006/out_of_time.html

The first piece of art that caught my eyes is Bill Viola's video work, 5 screener, with the downside-up diving people and some water dance (my definition). To be honest, before seeing this work, I had never been genuinely impressed by any video art, but for some reason when those nake people splashing into the water downside-up, I instantaneously connect them to the legendary Chinese monkey that was born out of stone crack. Never had I seen a stronger representation of life and the cycle of life. I was shocked from head to toe and couldn't stop the millions of thoughts in my head until Claudia clarified that Bill's work was indeed influenced by Asian philisophy and myth. http://www.billviola.com/index.htm

So what? Moved on to Jeff Koons, onto the crazy artist who bites his body, then onto the woman who uses her eye-lashes to paint ... I was back to the zone of "artist girl in finance", planning on my ski trip in the head and worrying about the year-end outlook for the fixed income market, until ...

I saw Carrie Mae Weems' astonishing work made out of old photos of African American people.

Believe it or not, it was less of a racial issue, less of personal issue, but more of the power of art that deeply grabbed my heart. It was the power of tranforming images to the loudest voice, the power of communicating the uncommunicatible, the power to enpower, that inspired me. I started to have tears in my eyes.

Before I had a chance to calm myself down, Gerhard Richter's paintings jumped into my eyes.

I learned of Richter's works in college, but never was I able to understand why Professor Salzillo adviced me to look into his paintings for my own artistic inspiration, until this moment. I am such a whimsical person, that I often find myself looking for myself. I believe doubt is the very definition of life, but meanwhile, I demand certainties from people around me. Maybe I am the happiest locating between dream and reality, between truth and lie, between painting and photography, like Richter.

I was truely happy at that moment of discovery. Art answered my questions that I couldn't find answers for in real life, art is my lover and friend. And I was ecstatic to find such connection with many other pieces of art in this exhibition.

There are only a few of those days in my life - days that I live my entire life for.

Five times a week, I wonder if I belong to the corporate world ... Some people believe that I am practical enough to survive on Wall Street, but more people believe that I will leave this place soon enough.

Ten times a week, I convince myself that I will return to the world of art, sipping tea while reading Jean Paul Satre and listening to Mozart. I prefer to think of myself as a genius, who will pick up a pensil and design the next Lincoln Center. I prefer to believe that deep inside myself lies the soul of Da Vinci.

Fifteen times a week, I look up my stock portfolio and strategize the next big trade. I get excited by the TOP section on my Bloomberg, I love to type "MSG" into my screen, I enjoy using financial terms to "take advantage of the divergent performance of bonds and equities".

Hundreds of times a week, I just wish I have more money.

There are many temptations in this world. Whether they are money, power, status, or fame ... I periodically find myself getting lost when I attempt to achieve a sense of superiority by chasing these matters. As I grow to master the game of the world, I am becoming more and more secured, both financially and physically. Nonetheless, a sense of vanity haunts on me from time to time, driving me to do more in order to enrich a plain life. But enough is never enough, my life is always in lack of something that I cannot name.

But art miraculously fills in all the blanks in my life, healing those wounds bleeding underneath my beautiful clothes. My relationship with art is like that of a married man with his beloved mistress - the more unavailable and secretive she is, the more pleasure I obtain while enjoying her. She gives me reason to stay strong, to make a lot of money in this funny world called Wall Street, and to appreciate the true meaning of life. I fight for myself, because I want to protect her. I distant myself from her occasionally, in order to be drawn back by a stronger passion and love.