A question from outgoing LegCo member David Li concerning mainlanders buying property in Hong Kong produced the answer you'd expect from the HK SAR government's Eva Cheng.

Since it has all along been the Government's policy to safeguard the free flow of capital within, into and out of Hong Kong, the Administration has no plan to require buyers of residential property to declare information about their origin. The Administration has also not conducted any study and forecast on the impact on or the outlook of the property market arising from Mainland people purchasing properties in Hong Kong.

As I've said elsewhere the true third rail of Hong Kong politics is laundering mainland money. There must be some heavy hitters in the mainland government to ensure that no one in the HK government snoops too closely in to the money transiting HK.

That said, the Government has always been mindful of the ramifications that wild fluctuations in property prices would have on overall macroeconomic and financial stability.
...{blah blah blah policies}...
with a view to ensuring the healthy and stable development of the property market.

In other words, the HK SAR government wants to ensure that betting on HK property is a win-only proposition, a safe investment with government blah blah blah policies in place to ensure your investment doesn't go underwater. Investors love government guaranteed winning.

And finally the HK SAR government throws up the usual obfuscation to avoid blaming their political masters in Beijing.

Nonetheless, as the major advanced economies are likely to maintain an ultra-loose monetary policy for a prolonged period, the resultant low interest rates and abundant liquidity could easily drive the property market to an exuberant state again when the external environment shows even a slight improvement.

As this analysis at Also Sprach Analyst of what drives HK property prices shows, it's the growth in money supply. Classic Milton Friedman monetarism. Excess liquidity chasing after too few investment assets produces asset inflation and bubbles. Of course the zombie conventional wisdom is always ultra-loose monetary policy in major advanced economies. But check out the actual data as provided again by Also Sprach Analyst and we can see that the announcement of the US' QE2 produced a huge spike in the growth in HK's monetary supply, while the actual implementation of QE2 several months later produced a slowing decline. While it would be impossible to ascertain the actual origin of the money growth due to recalcitrance on the part of the HK government and HK Monetary Authority, it's pretty clear that the driver of HK's property market has been a mind-boggling growth of the money supply on the mainland. Up until the last few months, the mainland's M2 would leave Ben Bernanke's jaw on the floor and has left a pile of unpayable loans that will require a clean-up that will make TARP look like a drop in the bucket.

So given the obvious data that shows the current and future HK government's policies on housing to be addressing sideshows of land supply rather than the actual economic drivers of money flows and policies designed to make housing a sure investment bet, 5 years from now HK will still be fucked.

While Hong Kong was watching the Sevens and the Wolf and Pig, AFP ran this story out of Australia on a pan-asian triad syndicate.

It said intelligence was uncovered that the syndicate had infiltrated a high level of government "in both law enforcement agencies and political circles" in Asia, including China, Vietnam, Thailand, Myanmar, Laos, Cambodia and Macau.

"There are a number of other countries where this is suspected but not apparent to date," the briefing, which has been supplied to overseas agencies, reportedly said.

And yes, if China and Macau are mentioned, you can be sure that Hong Kong doesn't get left out.

It pours billions of dollars into "high-profile Internet gambling facilities, Asian hotel chains and resorts, commercial construction companies, property companies in Hong Kong and Vietnam (and) casinos".

To move money, the syndicate uses "highly-placed government officials, banking staff ... (to) undercut any other overt or covert money transfer facility", the Herald cited the briefing as saying.

Who loves their money laundering?

What is it about this CE Selection that has Western media writing such crap about Hong Kong? This time I'm referring to an article in Time Magazine on Hong Kong's Non-election. At least they got the headline correct

The article does come complete with the now all-too-frequent "critics call it" aside. In this case, it's a reference to the election being a small-circle affair. After spending a paragraph noting the election is limited to a small circle of 1200 people, mostly chosen for their obedience to Communist Party dictates, why bother with the "critics call it" aside?

The story also fails to mention Albert Ho, Chairman of the Democratic Party, except as an aside in the last paragraph. "(the third is a democracy activist)" I don't really think of Ho as an activist. In this case he's more like the willing crash-test dummy, who survived a much worse beat down years ago, that gets to be the comic relief egging on the two CCP-approved candidates to continue providing HK with endless laughs.

And HK has to take the laughs it can get with this government, though you wouldn't know it from reading this article.

Other hot-button issues include pollution, and more and better schools and hospitals, areas where the government has shown little leadership even though it has plenty of money to throw at the problems.

The HK SAR government has spent almost every minute since the handover displaying leadership on schools, hospitals and pollution. It's fired loads of teachers and actively closed schools instead of pushing smaller class sizes. It's adjusted "school nets" to decrease the competition against their children getting the prized seats at the best secondary schools. They've been pushing privatising health care and granting cheap land for private hospitals, while fighting tooth-and-nail against funding local doctors and nurses at public hospitals. And it has spent more effort going after Lonely Planet for publishing a guide book with a grey skyline cover photo and pushing a garbage landfill in to HK's equivalent of a National Park, than it has on pushing forward new air pollution indices.

The biggest problem though with Western reporting on the CE selection this year has been the wrap-up of Henry Tang's problems. Invariably the Western media, and this Time article, write out a laundry list of the scandals plaguing Tang. The scandals themselves are really an afterthought for most HKers at this point. Even before the scandals hit mass publication and semi-confirmation, people thought of Henry Tang as the affable inherited wealth with a wine glass. Tang is the nice official you invite for a ribbon-cutting, but you bring dull scissors and a pre-cut ribbon to ensure the event goes as planned.

This was amplified by Tang's handling of the basement scandal. It was spectacularly bad crisis management. There was already disdain for the government's hypocrisy over illegal structure demolition due to several ministers' properties having illegal works and Henry Tang had pledged his properties were all legal. So when the information about Tang's basement came to light, he first denied that it existed and if it did exist, it was just a small storage space. He used his domestic servants to block access to government inspectors, until the media forced the issue. When the size of the basement became apparent, he said it was his wife's property and therefore she was to blame. Also there was no connection between that property next door and where he stayed and that because he was busy with his marital affairs, he was oblivious to his wife's wrong-doing. The local TV crews filmed Tang's dog walking freely between the two properties, so not even the most plausible of his excuses stood up to a few seconds of scrutiny. But placing the blame entirely on his wife would be like Bill Clinton doing his infamous 60 Minutes interview with Hillary and blaming her for Ken Starr and not properly cleaning that blue dress.

Leung's handling of the triad issue was poorly handled as well. I think if Leung's supporters had been more forthcoming about their part in that dinner, people might have stayed focused on the key issue, which is what dirt do the triads have on Henry Tang's business dealings. Of course the pro-HenryT press would try to deflect attention away from this issue and try to point fingers at Leung for "black-hand politics" and against the triads being able to influence the selection of the CE. There is a sacred cow media narrative, which dates back more than 60 years, about Hong Kong's economy being free and vibrant. Dirty laundry that exposes the institutional corruption that this narrative is designed to conceal is a violation of the Prime Directive.

And when I say institutionalised corruption, I'm talking about Henry Tang and his wife being in front of the TV cameras and press microphone while simultaneously eluding the government inspectors investigating whether Tang broke the law with his illegal structure.

UPDATE: Day of the CE non-election 25 March 2012 9 am:
I've gotten quite bad about posting completed long-form blog posts. I have a lot of half-written posts waiting for neater endings or for me to fill in names of books or hunt down urls of articles I've read. Of course the twitter stream has been in full throat the last few days as the Liaison Office cranks up its insular authoritarian intereference on behalf of CY, including bullying a paper run by Richard Li Tzar-kai of PCCW and Li Ka-shing's son and the spiking of a regular Friday column by the Liberal Party's Miriam Lau that tried to advocate for casting blank ballots, which runs counter to the Party Line that patriots must vote for their candidate.

So I snuck out yesterday to get a haircut. Sitting in front of me was the pile of magazines with JessicaC on top staring at me. The Hong Kong press is driven by scandal and shame. Hong Kong loves nothing better than one of their disliked big shots going down in glorious infamy.

Everyone knew that Henry Tang was neither a genius nor particularly well-regarded in Hong Kong. It puts him on par with HK's first CE, Tung Chee-hwa. Rumours had long swirled about Tang having skeletons in the closet. *cue up Diana Ross and The Supremes "Love Child"* But as Stephen Vines rightly pointed out, Hong Kong's elite don't live subject to the same rules that you and I are.

And this simple disregard for the rules that govern the groundlings is why the storm blows fiercely around Henry Tang's teacup.

Another caller said Tang and his supporters were shameless. "They ignored Hongkongers' views for their own advantages. I hope Beijing will do something," the caller said.

When has Beijing not ignored Hongkonger's views for their own advantage? And I'm sure Beijing will do something: they'll stick their fingers in HK's eyes and laugh. What are Hongkongers going to do? Are you going to stop them from doing it? As if.

What? You're going to throw your public support to CY Leung? When did he do anything for you as convenor of ExCo? I know he's pandering to public opinion now with policy proposals like a US 24 hour news network pushing "missing white woman" coverage, but did Beijing give him the nod against Tung Chee-hwa? Did he get the nod to replace Tung? Why is Beijing going to change the gameplan now?

So my predictions for the CE farce are: HenryT at 95-99%. If photos of HenryT on his office couch with removal sale items from Fetish Fashion appear on the net, it'll bump Regina Ip up to 1-5% odds. No one else has odds listed. Ip is the safety valve candidate that isn't the first choice of either the Cultural Revolution holdovers in the DAB or the plutocrats and their sycophants, but she's the compromise candidate if Henry can no longer get in front of the camera and shamelessly put forth the Party Line. (And telling the cameras yesterday that he still had broad support without breaking out laughing shows he's still passing that threshold.)

In either case, it'll be a colorful July 1st and Tsang Yok-sing will be busy tossing LegCo members out of the chambers for daring to question the Imperially-anointed Executive-led government.

UPDATE 26 March 2012:
And I'll be the first to eat crow. The Party's Liaison Office took advantage of the negative winds that HenryT faced and swept in Leung Chun-ying. Between the original post and now though CY's popularity has dropped spectacularly as he went from the darling of the anyone but Henry coalition to folks actually looking at his track record and actual beliefs. We'll see what happens with the opening bell of the HKEx this morning and we'll see the response of the HK people over the next 4 months and the next year.

So has anyone thought about why the DAB asked the government to relocate government offices to Kai Tak and pushed so hard for redevelopment of property in East Kowloon?

Let me run through some thoughts of mine. First, there was a time when the DAB was just the Democratic Alliance for the Betterment of Hong Kong. Now it's the Democratic Alliance for the Betterment and Progress of Hong Kong. Where'd the Progress come from? It comes from when the DAB subsumed the Progressive Alliance in February 2005. What was the Progressive Alliance? It was a pro-Beijing pro-business political party. This merger I believe is one reason the DAB has strayed from the positions of the pro-Beijing Federation of Trade Unions, though being pro-CCP trumps all other thoughts, beliefs and actions.

The only time I ever saw a Progressive Alliance street-side banner was in the Ngau Tau Kok-Kwun Tong industrial area. There's big money to be made by redevelopment of Kowloon East for businesses that might be eligible for buy outs and for commercial property owners in the area that would have formed the core of support for the ex-Progressive Party.

So when Donald Tsang starts tossing around the "triad" epithet, make sure to follow his own actions and see who profits from his policies. If the beneficiaries are his political/financial cronies, we can see who's really running a triad-style fiefdom.

So how do you know when the effects of social media are providing an equalising effect to the CCP's money being funneled in to the pro-Beijing political parties? When the pro-Beijing puppets in the HK government outlaw social media in politics.

So when the HK/DAB government's economic policy leave greater than 15% of the population in Kowloon/NT in poverty, Beijing's money can ensure the DAB's gift bags and services to old people will win votes. When the pan-Dems successfully find equalizers to Beijing's money funding DAB electioneering, the DAB doesn't have to worry. The HK government will do whatever it takes to ensure that free and fair elections with universal suffrage will never be seen in Hong Kong, because that might leave the rich subject to the rule of people that are supposed to be grateful for a gift bag of rice and crackers after being denied an economy that provides meaningful gainful employment for the vast majority of the territory.

A very interesting analysis at China Worker on the Wikileaks cable from October 2005 regarding a conversation with Donald Tsang concerning the proposals for political reform in Hong Kong. As China Worker points out from the left, it's not just the CCP that is blocking universal suffrage in Hong Kong, but the tycoons are neck deep in it as well.

Quoting Donald Tsang Yam-kuen in the cable, "the great fear in Hong Kong is not taxation without representation, but ‘representation without taxation’ in which the non-taxpaying majority would dictate [terms] to the taxpayers.”.

China Worker beautifully points out that the median wage in Hong Kong has stagnated since the handover, while the tycoons and the wealthy have seen their wages increase (and I'll note that this includes during the crisis periods like SARS when the HK economy essentially ground to a halt.)

The ‘non-taxpaying majority’ refers to the vast majority of Hong Kong’s working population. The “extremely narrow tax base” of which Tsang speaks is a deliberate choice by government to restrict welfare spending and encourage the so-called “big market, small government”.

By welfare spending, we mean spending on items like public teachers, public doctors, and the other niceties of a functioning society. And of course the major source of taxation in Hong Kong is the non-hidden taxes on property, but that is the only tax that can be earmarked for special purposes and is off-the-table for any purpose but sweetheart projects for the tycoons and friends.

In Hong Kong’s special form of crony capitalism, with the property market comprising its rotten heart, the mass of ordinary citizens including the 1.2 million who live below the poverty line, are levied a disguised ‘tax’ in the form of excessive property prices.
...
This ‘hidden taxation’ is a huge burden on small businesses – rents for shops and restaurants have risen by 20-50 percent this year. And even for those in abject poverty, rents of around HK$2,000 (US$256) per month are charged for a ‘cage home’ large enough for only one person!

In most societies the power of taxation is reserved to the government, but that is not the case in Hong Kong, where even the pro-business pro-CCP shoe-shiners recognize high land prices/high rents as a form of supplemental taxation that avoids government coffers and is sent directly to line the pockets of the tycoons. Of course if this money wasn't siphoned off from the economy in to the hands of tycoons, folks who work hard at their private small and medium enterprises might get rich enough to pay taxes and might get large enough to challenge the tycoons' retail and services outlets.

This will not do, because without poor people, how can the rich people feel they are better than others? And is there any reason beyond trying to prove you're better than "them" behind the conspicuous consumption that drives high retail rents at the mega-malls owned by the property tycoons? And what executive office in Hong Kong would be complete without tea ladies and what executive's home in Hong Kong would be complete without an endentured servant from some third world country? And you can't have those "nice things" without poor people desperate to work.

And of course if you're a Vice Chairman of the CCP how can you rub shoulders with some of the richest men on the planet, if policies aren't in place to keep them rich? Especially when the richest men on the planet regularly skim the wealth from Hong Kong and transfer it to the mainland to develop land projects and other white elephants that provide ample opportunities for "gratuities" as well as the essential boost in GDP via expanision of non-productive assets.

But leave it to the folks with Trotsky on their sidebar to sum up Hong Kong's socio-economic situation so nicely.

Tsang’s leaked comments show that capitalism and the Chinese dictatorship represent an alliance resisting democratic change in Hong Kong and China.

So beyond my previous statement about the rationale for the By-election Proposals in Hong Kong being the product of control freaks who hate the fact that the people will elect the people they hate, there's the preposterous bullshit about the government favouring "rational debate".

A rational debate would have both sides represented presenting their views. But given the Hong Kong government is run by insecure, unpopular control freaks, rational debate is tossed out the window in favour of "only our side gets to frame the debate from the podium" on tv and at public forums.

Dear Stephen Lam... Dear Donald Tsang... If you're truly commited to rational debate, redo your TV commercials by removing all of that framing bullshit from the intro or allow the script to include text provided by the targeted parties. Secondly rather than locking the agrieved parties outside the public forums invite them on stage and let them debate you.

Now I realize given the Hong Kong Courts' shoe-shining decision on the Constitutional Reform ads that you don't have to do either of these things. Rational debate has been rewritten with the HK courts' stamp of approval to mean the government gets to speak and the opposition is locked out and muzzled. And that rational no longer means discerning truth from facts, but speaking in a "genteel fashion dressed in a suit and tie" as is the habit of "radical Centrists" who can't win an actual rational debate based on the facts on the ground.

In the last popular election the association of rural kingpins, the Heung Yee Kuk, withdrew their support from the Liberal Party. This meant that the Liberal Party ended up with ZERO popularly elected Legislative Representatives. (Under HK's proportional list system, this is pretty damn difficult.) What this shows is that the Liberal Party has ZERO popular base. It is the party of Hong Kong's tycoons.

So it's hardly suprising that they would resost to populist racism in economically uncertain times. (Racism in Hong Kong?!? Unpossible! Yeah, yeah, and the moon is made of cake. My favourite lines from One China, Many Paths was the admission that there were no minority authors in the book and that an honest discussion of minority issues was impossible in China.)

HK's Civic Party should acknowledge peoples' sense of economic insecurity but remind people Liberal Party are cheerleaders for the policies that have created this economic uncertainty (high land prices, high rents, no wage growth for non-C*Os, high skimming costs on joke retirement funds). The Liberal Party would love to refocus the bottom half's anger towards another group of poor people, so you aren't angry at the real people pulling your economic strings.

So much of what constitutes punditry in our society has fallen from being the voices of the wise or experts to just being the voices of those that have spent the most energy on personal branding regurgitating "conventional wisdom". (cf Tom Friedman)

The hot new playground for the cool kids is Google+. So it made news that Google was revoking accounts in their limited-availability system because they violated a ridiculous Terms of Service requiring a real name for accounts. On twitter I commented that this was the result of combining Google's nature as an advertising sales company with Anil Dash's latest screed on how to create hive-minds.

I know there are many who loved this post, because there are many who despise open conversations on the internet. "Authority" figures are extremely fond of guided conversations and are the most frequent contributors to the meme that anonymous commenting must be stopped because it ruins conversations.

Now Anil Dash responded to me on twitter that he never called for censorship, and I responded that he didn't get it. That his position of "confirmed IDs" lines up with the desires of the Chinese Communist Party and other authority figures who don't want to have their opinions challenged. He responded: "can't tell if you can't read or just want to be a jerk. I explicitly say anonymity is a valid and important identity option". So I went back to read his post and use the ctrl-F to search for "anony" to catch all uses of anonymous or anonymity in his post.

Because a company like Google thinks it's okay to sell video ads on YouTube above conversations that are filled with vile, anonymous comments.

...

But truly anonymous commenting often makes it really easy to have a pile of shit on your website, especially if you don't have dedicated community moderators.

...

When do newspapers publish anonymous sources? When the journalists know the actual identity and credibility of the person, and decide it is a public good to protect their identity.

Vile... Pile of shit... Definitely sounds like Anil Dash is saying anonymity is a valid and important identity option with adjectives so positive. And the last point is actually the dumbest of the three, since the use of anonymous sources rarely has anything to do with the public good, but rather it's used when a journalist exchanges access to the public figure for the right to float propaganda in to the media without accountability. The classic example of this is Judith "the Queen of all Iraq" Miller and the NY Times.

Of course I should have realised early on this was going to be one of those arguments based upon "appeal to authority" favoured by authoritarians everywhere.

If you aren't willing to be a grown-up about that, then that's okay, but you're not ready to have a web business.

...

Well, the odds are I've been doing this blogging thing longer than you, so let me tell you what I've learned:

Every time an ad agency tries to sell their product with a baby, you should throw up a defensive flag and call "bullshit". Every time an op-ed identifies the author's preferred as "the grown-ups" or "adults", you should throw up a defensive flag and call "bullshit". For example, kids are notorious for calling each other names. What's the cliche adults fling everytime? "Sticks and stones may break my bones, but words will never hurt me." See where I'm going with this? That's right I'm going to tell you to be a grown-up and take the adult's advice of not letting words hurt you. See how easy it is to say the complete opposite when "appealing to the authority of social expectations/norms".

And if you have doubts about the effectiveness of confirmed IDs in producing a hive-mind environment, read the 135 comments on the post. Adoring sycophancy. 135 comments with only a single person calling "bullshit" and that one Anil Dash quickly deflects in to the analogy of meatspace and conversations in a courthouse. *rolls eyes* A blog is just like a courthouse. *snort* Was there a vigorous back and forth discusion in the comments? No, just a lot of "great post" "I agree" of the sort that you see used by link spammers and have as much value as an AOLer's "me too".

Which community's users worked hard and used their brains and skills to vote their Fearless Leader to be Time Magazine's Most Influential Person in 2009? Which community's users have voted in polls that it's one of the most hated brands in America? The first is surely a community that Anil Dash would claim is full of assholes. The latter is the one Anil Dash uses as his confirmed identity provider for his blog.

Which community's creativity spawns internet memes? Which community's creativity spawns "hateful" companion sites that make fun of the stupidity of the residents of the community? Which community produces hacktivists hated and hunted by authoritarians, whose lack of moral authority causes them to resort to criminal and civil litigation to maintain their authority? Or would you prefer the community that pulls out the ban hammer on noted social provacateurs like Roger Ebert *ooooooh... ain't he scary*?

So if confirmed ID is more of a problem than a solution to vigourous conversations and community, then what could you learn from a truly successful social community? 4Chan as best as I can tell does use moderators to delete posts that violate the Terms of Service. The basic rule is don't post anything that would threaten the continued existence of the community itself and use the right forum for your comments. Being the target for overzealous prosecutors means that 4Chan has to be vigorous in stamping out anything which constitutes illegal activity, like child pornography. The community is quick to flag offending posts as items to avoid or probable jailbait trolls from law enforcement or online vigilantes. The key takeaway here is "inclusive ownership". Anil Dash's commentary and comments are all focused on "my community" "my house". 4Chan is focused on "our commmunity" even if "our" is a semi-transient set of anonymous users. Who do you think will conform to community standards more? The commenter who is viewed as a visitor and outsider or the commenter who is viewed as a member of the community. Would you rather visit the bar with a gate at the door to only allow in the "proper people" or the neighborhood dive with a stool open for a newbie with the expectation that you'd quickly become part of the community?

Having been part of the Slashdot community when it introduced accounts and community moderation and meta-moderation, the goal wasn't to eliminate the FreeBSD is dead or Hot Grits Down My Pants or First Post or Natalie Portman trolls (see the memes generated by anonymous trolls?) it was to provide incentives to commenters to bring them in to the community. One of Anil Dash's commenters specifically mentioned avoiding a site based on software originally derived from Slashdot's model, the Daily Kos. If dKos is too rough and tumble and too coarse for you, then stick with the AOL me-too'ers at Anil Dash's. On the other hand many patrons of the Great Orange Satan refuse to stumble over to Baby Blue because Atrios allows anonymous comments and *gasp* the comments wander off topic and force open threads every few hours when there is no topic. The unconfirmed persistent pseudonyms and now confirmed pseudonyms with the advent of Disqus celebrate marriages and births and birthdays and commiserate divorces and deaths with one another unprompted by the blog owner. The community also has the dumbest trolls on the planet. But as Winston Churchill might say, "In the morning I'll be sober, and you'll still be ugly." Or as the Eschaton-started meme puts it, "he's stupid, ugly and nobody likes him.

If you really want to deter the drive-by trolls that don't want to be anything beyond a disruption to the community (scroll trolls, word salad trolls, talking points trolls, link scam/SEO trolls) hook up your comments to an IP blacklist. My preference is the spamhaus.org's sbl-xbl blacklist. This is a list of IP addresses that have either been reported for actively sending email spam or is an exploited machine, i.e. likely member of a bot net. Trolls, like the China Law Blog-type and 50 Centers, love to use exploited machines as open proxies to spew their multiple personalities. And astroturfing is every bit as corrosive to good conversation and community as "cruel and inhuman" or "racist" comments.

UPDATE 8:45pm HKT
Let me come back briefly to Anil Dash's analogy of the court house. I guess he's suggesting that if an officer of a court with an ID Badge started to act beligerent and threatening his/her fellow employees, that would be acceptable to the court house because a confirmed ID was involved. Or maybe not. The problem is the behaviour, not whether the perpetrator is ID'd or not. And given the latest update from Google on their ID policy, this doesn't bode well for Google+ as a community beyond its reach as an advertising platform for Google and those that have spent a lot of energy on their personal brands.