You can tell today's letter of the day is P. I recently recounted the horror Hong Kong's public servants face now their lavish benefits are coming under scrutiny. The pain is set to continue. From the SCMP:

Colonial-era civil service perks estimated to cost taxpayers $96 million a year are to be scrapped or substantially tightened as part of an overhaul to curb government spending...[The Civil Service Bureau] recommended that at least eight items of spending, including the leave passage allowance, air-conditioning, furniture, hotel and baggage subsidies, be scrapped or tightened...

At present, senior directorate officers are entitled to $43,720 as holiday allowance each year. They can also claim the same amount each for up to five family members. The bill for the past financial year exceeded $66 million. With allowances for baggage, hotels, furniture and moving house, such spending cost $90.8 million in total in 2003-04.

Meanwhile, today presents two more signs of the end of the China bubble.

Firstly the SCMP:

China Construction Bank (CCB), the mainland's top property lender, is likely to delay its initial public offering to next year or later as top government officials and economists have expressed serious doubts about the bank's readiness...But there have been growing indications that CCB's rush to list has caused considerable worries among the top leadership in Beijing and leading government economists...Premier Wen Jiabao has expressed doubts about the capabilities of CCB's management and is believed to be undecided on the bank's listing schedule.

Finally some economic comedy. Yes, it does exist. China's inflation rate is 2.8%. Even though the economy's growing at 9.7% and retail sales at 9.2% with fixed investment up 43%. Cash is flooding in. In plain language, it simply means there will either be an explosion in inflation (prices go up when people are buying that much more every year and companies are investing that much more in machinery and making that much more every year) or an implosion in the Chinese economy. Either way it isn't going to be pretty. Now you can see what the central Government is so worried about this. So should the USA - China's been funding their debt binge and propping up the US dollar (along with Japan) for years.