Harry Chen Thinks Aloud

As home prices drop and interest rates increase, many homeowners are facing possible foreclosure on their homes. Politicians in Washington is debating whether or not the Government should try to help those homeowners.

My opinion is as the follows.

The Government shouldn’t rescue those homeowners who are unable to pay mortgages because they have been taking out risky loans to fund their luxury life styles or to buy houses that they can’t really afford. Doing so will only encourage similar behaviors to repeat in the future. People need to learn how to manage their personal finance.

On the other hand, the Government should rescue the US economy if it’s heading towards a wrong direction. For example, the Government should interfere the US credit market if businesses are finding hard to borrow money due to the market credit crunch. The economy is the backbone of this country, and it has the ability to affect the economy of other countries. Ensuring a healthy US economy should be the top most priority of the Government.

Some people may ask “shouldn’t the Government help homeowners because a negative housing market will discourage consumer spendings and subsequently bring down the US economy?” My answer is again no. The growth of our economy shouldn’t solely depend on consumer spendings, especially those spendings came from money borrowed against home equities. If the economy is healthy, any pullbacks in consumer spendings will only be temporary. Eventually, consumer confidence will be rebuilt as the time pasts.

Updated: Aug. 31, 2007

I’m not alone in thinking that the Government should leave the sub-prime mess alone, and shouldn’t bail out those who can’t pay their mortgages.

See Prof. Jeff Cornwell’s blog.

SICgen is an AI software designed to create bogus scientific research papers. It’s rather amusing to read papers created by this software. They are properly formated for scientific publication — the papers are created with graphs, figures and citations.

Some random papers created by this software:

• Scatter/Gather I/O Considered Harmful
• Unstable, Reliable, Symbiotic Theory

Can machines write papers? That depends on how you define “paper writing”. SIGgen can certainly produce papers that look like those written by people, but the quality of those papers is no match to those composed by the human mind.

If you study papers created by SICgen closely, you will observe the following patterns: (1) SICgen is good at producing papers with a consistent style and format. Section titles, table of contents and citations are all properly formatted. It does a better job in doing this than most people. (2) SCIgen is poor at “writing”. Sentences in the same paragraph and paragraphs in the same paper are often logically disconnected and lack coherence. Careful readers will also notice many writing style issues (e.g., the use of uncommon abbreviations without first defining the terms) .

Though SICgen is not a great writer (at least not yet), it serves a special purpose. It’s a tool to prove that the review process of many scientific research conferences are lack of quality controls. The MIT students who created SICgen has been submitting machine-generated papers to different conferences. In few extreme cases, their papers were accepted for publication, and the authors were invited to present them to the research community. Read the full story here.

The Consumer Price Index (CPI) report shows food price in the US rose 0.3% in July 2007. The price for food away from home (e.g., food in restaurants) increased 0.5%. The price for food prepared at home increased 0.1%.

In the past year, food price are up 4.2%.

Conclusion: it pays to prepare food at home and dine out less.

Source: MarketWatch.com

The concept of self-branding is nothing new. Politicians brand themselves to get voted; movie stars brand themselves to get public attention. In the age of Google, YouTube and Facebook, self-branding is an important skill that every career-driven individuals must pay attention to.

I came across this concept twice in the past few days. First time, when reading the bookmark “The World is Flat” by Thomas L. Friedman. Second time, when reading the article “Creating Brand You” by Diane Brady in the BusinessWeek magazine. What has gotten my attention is that in the age of Internet, self-branding is a strategy that is no longer exclusive for the rich and powerful, but also is available to anyone who has an Internet connection and knows how to use a mouse and a keyboard.

What is Self-Branding?

Think yourself as a product. Self-branding is to use branding tools (e.g., strategies, tactics, communication messages, blogs, photos and videos) to maximize your own image. “Brand You” defines who you are, how you are great and why you should be sought out. Self-branding is to create your reputation in a targeted population — which may be your colleagues, potential clients, future employers etc.

Why is Self-Branding Important?

Read the rest of this entry »

The US Dollar is trading historically low against many major currencies. Few questions come to my mind: (1) How did we come to this situation? (2) Who can and can’t benefit from a cheap US Dollar? (3) Should small investors be worried about a cheap US Dollar?

How did we come to this situation?

According to The Economist article, the US Dollar is trading historically low for three key reasons: high oil prices, a weak US economy and a troubled US credit market.

Who can and can’t benefit from a cheap US Dollar?

Individuals and companies benefit differently from a cheap US Dollar. For individuals, tourists travel in the US from countries with a strong currency can benefit. Travelers from Canada and EU find everything to be cheaper in the US. On the other hand, US tourists who travel abroad face a complete oppose situation — everything is more expensive abroad than at home.

A cheap US Dollar can help US companies and depress the economy of foreign countries. US businesses with an international market can benefit greatly from a cheap greenback. This is because the price of their exports are now more competitive than those from countries with a strong currency. Developing countries whose economy depend on exports to the US may be hurt by a cheap US Dollar — a weak US economy will demand less imports.

Should small investors be worried about a cheap US Dollar?

In general, small investors in the US shouldn’t be worried about a cheap US Dollar, assuming that their investment portfolios are diversified and are aimed for long-term investment. Currency exchange rates are cyclical — the US Dollar was the king in the late 90’s. It’s only a matter of time for the US Dollar to come out of its low (the question is when). Meanwhile, I think investors should continue to invest in the US stock market, in particular in S&P 500 companies. The profits of US national business may be hurt by a weak US economy, but multinationals should do relative well because of their diversified international markets.