Zhang

FAN Gang, One of the great economists in China, had years’ experience in auditing courses at Harvard, according to latest news at news dot xinhuanet dot com slash overseas slash 2009-05 slash 22 slash content_11417244 dot htm

“樊纲为自己预定的目标是要多上点课，多学习知识。因此，从一开始他就到哈佛大学去旁听研究生的课程。樊纲虽然对基本原理都已掌握，但学起来仍然吃力得很。当时，他并非正式注册的学生，可以轻轻松松当一个 ‘访问’ 学者，四处走走增长些见识，写些东西。但他意识到这可能是他最后一次在课堂上系统地学习当代经济学理论的机会。所以，樊纲下了决心，一定要’学进去’.”

“在哈佛，樊纲从头学起，跟着班上的学生一起听课、做作业、参加小组讨论，甚至参加考试。虽然，他最终没能继续留下来读一个洋学位，但他还是感到很踏实也很充实，毕竟他把当代经济学的基本理论和方法系统地学了一遍。”

Knock Knock!

Who’s there?

Lehman. (“Lee, man“)

“Lee, man” who?

Luck exits here, man.

===—

Knock Knock!

Who’s there?

AIG. (“A.I. gee“)

“A.I. gee” who?

Assets in government.

Today was the day when my thesis director agreed to sign on to supervise my thesis. Now I am finally on the track of graduation. My research advisor, Don Ostrowski, was great to help me with my initial process, and passed my initial proposal and narrowed down my potential thesis directors. My thesis director, Richard Cooper, was generously agreeed to help and supervise my thesis. Now the time is back to me again.

Through this thesis writing process, for example, I have learned that I will never expect too much from others, but never settle little for myself. I have talked to many people on my research topic, but some, who I thought would help, were just not interested. Some, who I did not expect, ended up giving me a lot of help. It is true that my standard is high, as I often joked with my friends that I wanted to a Nobel Prize winner, or likely, to direct my thesis. Unless I got a Ph. D in Economics, there is no way to find a Nobel Laureate to supervise my thesis.

Overall, I am honored to have Professor Cooper to supervise my thesis, as well as many friends helping me with comments and editing. Today was one of those happiest days in my life.

It is interesting to think of happiness. There are many versions of definitions, from psychological interpretation to economic definition, from mental notion to constitutional stipulation. Happiness perhaps is just a feeling. I remembered that the most popular course at Harvard based upon the number of students enrollment was happiness, or something related to happiness and psychology course in 2007, according an article on the New York Times.  Many psychologists, economists, and doctors are looking for happiness in academic settings. Many scholars tried to explain anything with psychology due to the emerging trend today. Many economists tried to explained economic phenomenon by borrowing psychological experiment. Many lawyers tried to explain the legal reality by exerting to psychological theories. Many doctors are trying to figure out how actually the brain works . . . There are many theories and there are emerging articles on such topic.

What I learn from many published experiments, and my personal experience is that my feeling of happiness is that I never expect too much from others, and never settle too little for myself. It has been enforced in many interesting experiments, such as . . .

To be continued . . .

Ben Bernanke said, “[the Fed] will continue to forcefully deploy all the tools at our disposal as long as necessary to support the restoration of financial stability and the resumption of healthy economic growth,” according to Reuters News at www dot reuters dot com/article/newsOne/idUSTRE52627J20090307

Richard Posner said, the economic is likely to slid into “depression” in his own words, according to the keynote remark he gave at a conference on the free market mindset at Harvard Law School at www dot law dot harvard dot edu/news/2009/03/17_free-market.html

Also Robert Hall mentioned that this credit crisis might be the most severe one in the US history. There is an interesting chart, according his blog at woodwardhall dot files dot wordpress dot com/2009/03/emp309.jpg

“W” theory, also known as “the Dow Theory,” was created by Charles H. Dow (1851–1902), who cofounded the Dow Jones and Company. In simplest form, the Dow theory argues that the performance of a stock market is zigzag, just like the “W.” (Or M if you extend the W.)

Now the market neutral investors have revisited the W theory to predict that the decline of the market price is a normal trend, justified by the W theory.

Interestingly enough, many theorists and investors start to speculate the market directions, so that they have to “invent” something to justify the reasons, otherwise they might lose their jobs.

One theory is V theory, as many have already known, that the market will reach the bottom at the end of this year, or around that time, according to (you can find out through any search engine online.)

Another theory is L theory; the “L” argues that since we have experienced the largest drop of the market price in such a short period of time, job losses is increasing, the huge debts is skyrocket, and the gloomy economic perspectives has hurt investors, the economic recovery will take a long delay before it can turn north without further deterioration.

Some also invented the U theory. Basically, it is like the “L” theory, except that it is the “U” shape.

However, the market condition seems to form a “I” form in the sense that it will get worse before it gets better. This raises an interesting question of how worse the market will end up with? It is an interesting question that many people are anxious of knowing, and here I will show a portion of my predictions. There is no clear picture that the GDP growth will go up, or even stable at current level. The unemployment is increasing due to the closeup of factories. The consumption is decreasing because of the uncertainty of the job security. More industries and more sectors will ask bailouts’ money because of the moral hazard. The Credit Default Swaps is great innovation in the bull market, however, is dangerous in the bear market.

The reasons can go on and on, but some arguments can be backed up by economic data, and a few cannot justified because of the market uncertainty and lack of transparency. Thus, a rational prediction of the S&P 500 will be reasonably reach about 500.

To verify any theories, empirical evidence are needed. There is one chart that illustrates the W or the L theory at graphics8 dot nytimes dot com slash images slash 2009 slash 03 slash 07slash business slash 07jobs-graf01 dot jpg

Further empirical data are from the following sources:

To be continued . . .

Head of state is an important job in the sense that they could take a day off in President’s Day. Seriously, they have to take in charge in the time of crisis and be accountable for anything happening in a country, occasionally abroad, even though they have their own jets, own staffs, and even own military. Harvard University is one of the place to produce head of state in the world.

There are 13 schools to grant degrees at Harvard, including 4 Faculty of Arts and Science (FAS) affiliated schools — the College, the Graduated School of Arts and Sciences, the Extension School, and the School of Engineering — and 9 individual professional schools, including the Business School, the Dental School, the Design School, the Divinity School, the Education School, the Kennedy School, the Law School, the Medical School, and the School of Public Health. Among these 13 schools, 7 schools have produced 23 heads of state in 15 countries and regions so far, including

the College (FAS)‘s Benazir Bhutto, Bachelor of Arts ’73 Radcliffe College, Prime Minister of Pakistan (1988-1990, 1993-1996); John Fitzgerald Kennedy, Bachelor of Science cl 1940, President of the United States (1961-1963); Franklin Delano Roosevelt, Bachelor of Arts 1903, President of the United States (1933-1945); Theodore Roosevelt, Bachelor of Arts mcl 1880, President of the United States (1901-1909); John Quincy Adams, Bachelor of Arts 1787, Master of Arts 1790, President of the United States (1825-1829); John Adams, Bachelor of Arts 1755, Master of Arts 1758, President of the United States (1797-1801);

the Graduate School of Arts and Sciences (FAS)‘s Miguel de la Madrid, Master of Arts ’76, Doctor of Philosophy in Government ’78 , President of Mexico (1982-1988);

the Extension School (FAS)‘s Álvaro Uribe, Certificate of Special Studies in Administration and Management ’93 , President of Colombia (2002-);

the Law School‘s Barack Obama, Doctor of Law ’91, President of the United States (2009-); Ma Ying-jeou, Doctor of Juridical Science ’81, President of Taiwan (2008-), Rutherford B. Hayes, Bachelor of Laws 1845, President of the United States (1877-1881); Mary Robinson, Master of Law ’68, President of the Republic of Ireland (1990-1997);

the Business School‘s George Walker Bush, Master of Business Administration ’75, President of the United States (2001-2009);

the Kennedy School‘s Tsakhiagiin Elbegdorj, Master of Public Administration ’02, Prime Minister of Mongolia (1998, 2004-2006); Felipe Calderón, Master of Public Administration ’00, President of Mexico (2006-); José María Figueres, Master of Public Administration ’91, President of Costa Rica (1994-1998); Jamil Mahuad, Master of Public Administration ’89, President of Ecuador (1998-2000); Donald Tsang, Master of Public Administration ’82, Chief Executive of Hong Kong, Special Administrative Region (2005-); Lee Hsien Loong, Master of Public Administration ’80, Prime Minister of Singapore (2004-); Ellen Johnson Sirleaf, Master of Public Administration ’71, President of Liberia (2006-), Carlos Salinas de Gortari, Master of Public Administration ’73, President of Mexico (1988-1994), Miguel de la Madrid, Master of Public Administration ’65, President of Mexico (1982-1988);

the School of Public Health‘s Gro Harlem Brundtland, Master of Public Health ’65, Prime Minister of Norway (1981,1986-1989, 1990-1996); Thomas Davis, Master of Public Health ’54, Prime Minister of the Cook Islands (1978-1983).

Note: this list does not include Honorary Degree whatsoever.

At the end of the 18th century, Adam Smith coined the concept of “invisible hands,” and it played a irreplaceable role in creating market-based economy. However, market itself has inherent flaws, and will led a disaster, and today’s world financial crisis has been spreading much out of the hands of the market. Thus, we might think some rescues, one of which is “palpable feet”.

In the 21st century, we need to consider a creatively old concept of palpable feet — a government’s role in the market. Invisible hands are hard to control because of collective individual dynamics, whereas the palpable feet are easier to see and oversee because of the efficient and hierarchical functions. Invisible hands are hard to see, but the palpable feet can examine by bootprints.

Philosophically and empirically, invisible hands should collaborate with paplpable feet in dealing with financial crisis.

… to be continued.

Unsolicited Advice from L. John Doerr:

Always network – develop personal, lifelong networks.

Sustain a couple of mentors.

Network one person each day for 10 minutes.

Favor positions with external contacts: marketing, sales, developer relations,…

Take risks … “to ask permission is to seek denial”

Integrity is a binary state…

Life’s long: it’s a marathon, not a sprint.

In all, VC is a service industry, and the better to understand the business, the better the chance to succeed.