Here are a couple of interesting Rorschbach tests for market observers.
Tiananmen Square anniversary
During this past week, the press was full of then and now stories about the Tiananmen Square massacre in 1989, some 20 years ago (example here). The following account tells the story of Prof. Chen, who was involved with the protests and then later purged by the Chinese authorities. He later emigrated to Canada [emphasis mine]:
Prof. Chen also was silent. The only way he was able to escape the memories of June 4 was, in some ways, by returning to China.
His prime motivation for moving back was for his children to be educated in a more competitive environment. “I don't think they can compete with Chinese children who study 12 hours a day, seven days a week,” Prof. Chen said, laughing.
What do these stories tell us or the media? Should the West maintain its focus on human rights in dealing with foreign countries? Or are has China and the Chinese changed so much in the last 20 that a purged professor feels compelled to return because he believes that the western education system is too soft? Who is more Darwinian and who are the true capitalists now?
Hedge fund regulation
Consider this new, ah, innovation in hedge fund investing:
Richard W. Fields says he has come up with a win-win financial strategy for the downturn. He is investing in lawsuits.
Not in trip-and-fall cases, mind you, but in disputes that are far larger, more costly and potentially more lucrative, often pitting major corporations against each other.
Mr. Fields is chief executive of Juridica Capital Management, which runs a fund that invests in one side of a lawsuit in exchange for a share of any winnings, The New York Times’s Jonathan D. Glater writes.
Does this demonstrate that hedgies are total amoral beings who will do anything for a profit? Or amidst the calls for greater hedge fund regulation, does this story demonstrates the utter futility of trying to regulate hedge funds as they are testaments to the power of innovation and human ingenuity?
There are no right answers. The answers only tell you something about your own nature.