Portable Alpha

China: CITIC and Risk Management Practices

Michael, in addition to your points, i guess lack of discipline [ on governance, management, business operation and investment strategy, etc.], excessive conflict of interests due to complex guanxi and hierarchical structure [well like bad nepotism, and semi-economically pragmatic corporate authoritatianism] plus devoid of hands-on experience for people either in managerial positions and front line might all have to do with CITIC pacific plunge. I'm neither intending to judge nor criticize, just offering some thoughts.

Transparency is definitely an issue.

As to the financial crisis, I personally don't find it diabolical on excessive risk taking business model, it's another case of wrong bet. Investment banking's attainments have already been miraculous. And as you've mentioned, stuffs like cdo, cds and other derivatives, etc. merely represents what's been happening on the surface, deep inside and underneath, it's the loose cannon backed by uber-incentives that have gone off, albeit i'm reluctant to describe it as human greed, desire for more is naturally intrinsic as all creatures seem to have an appetite for growth and expansion.

it's indeed been very dreadful as to what went down on the street, but i guess people still have to look forward at the end of the day. And quasi-elected officials around the world seems to have been making moves, despite procastinatory.