That was the most frequently asked question among bankers and private equity experts attending a recent forum in Hong Kong, as they swapped strategies about how to pick up stressed assets during the financial crisis. 

When Lehman Brothers collapsed a year ago, everyone shared the same view: The global financial crisis was just beginning.

But one year on, many global markets have bounced off the bottom and some have recovered quite nicely. The Shanghai benchmark index, for instance, has gained more than 50 percent since the beginning of this year. As a result, views among bankers and top investment strategists about ongoing risks to the business outlook have started to diverge.

"Valuation is still a big threat," said Michael Kim, a former senior Carlyle executive who founded MBK Partners after leaving the U.S. buyout giant.

"If a W-shaped recovery is going to happen, I think it will be a tremendous buying opportunity," said Kim, referring to the possibility of a "second dip" market correction.

Andy Xie, former chief Asia economist at Morgan Stanley who earned his reputation in the financial industry as one of the most bearish analysts in Asia, forecast that a "second dip" in China's market could occur next year.

"Markets will come down seriously, and China needs to increase money spending again, then you will see another rally," said Xie, adding that speculative hedge funds could earn big profits in the subsequent rally.

But not everyone expects or is eager to see "a second dip", especially those dealmakers who have already jumped onto the deal flow and believe they have successfully bet on the quick recovery early this year.

"How cheap is cheap? I think the price level is now reasonable, and in fact we already missed the bottom level, which was the time when Lehman Brothers went bankrupt," said one forum delegate.

Another financial industry executive, who explained his outlook on valuations to reporters at the forum, said: "To those who missed the chance to take advantage of the recovery in this round to buy some cheap assets early this year, they will definitely tell the public that the valuation is not yet cheap because they haven't bought anything yet.

"To those who bought something early this year, now is the time for them to defend their investments so they keep saying prices will rise soon."

He smiled, and posed a question for other dealmakers: "How greedy is greedy?"

Photo caption: A man sitting at the Exchange Square in Hong Kong. REUTERS/George Chen

Cost to CIC? Nearly Zero.

Benefit to Morgan Stanley? Priceless.

The banker exchange is an outgrowth of the investment bank's relationship with CIC, in which CIC took a stake in Morgan Stanley. While CIC has taken a loss so far in that investment, it has paid off in other ways.  

While remaining on the Morgan Stanley payroll, the bankers were relocated to CIC's Beijing head offices to work there for different kinds of temporary jobs, acting like consultants with no power to make decisions on deal-making.
 
During the bankers' "lease period" at CIC, Morgan Stanley paid their salaries, although the fund might have offered some non-cash benefits, such as free public transportation cards or lunch coupons to such special expat staff.
 
In fact, it's not just Morgan Stanley. Many other fund houses, asset managers and even law firms are happily lending talent to CIC for free in the hopes that they can build solid and long-term partnerships.

Even if China Investment Corp. paid these bankers and experts, it wouldn't come near what they are already making. For a monthly salary, a vice-president level job at CIC can only match the monthly housing allowance for an entry-level investment banking analyst in Hong Kong, roughly between HK$20,000 and HK$25,000.
 
Some in the financial industry describe the value of such "lease" arrangements as offering unique opportunities to gain a clear picture of what CIC wants and how the fund works or even what the top executives' personal preferences are -- German beer or French wine, for example. That goes beyond market knowledge but is highly valued intelligence.

Who knows? It might pay off one day with a billion-dollar deal or two.

At a financial forum in Hong Kong this week, Zhou Yuan, a senior executive from China Investment Corp (CIC), the $200 billion sovereign wealth fund, offered a mischievous twist on some previous formulations, as well as a nod to the importance of China in any global recovery.
 
In an effort to lighten the mood among a group of foreign economists, who had been arguing about whether the global recovery would be W-shaped or V-shaped, Zhou offered a perspective he said he'd heard from another source.
 
"Whether China's consumers will lead the world into a more prosperous stage of economic development, I don't know, but we certainly hear some comments to that effect," said Zhou, CIC's head of special investments.
 
"It's clear that the economy (recovery) is something going into the V-shape," said the English-speaking Zhou. "Someone also told me that the economic development worldwide will take the shape of www.v.cn."
 
 After a moment's reflection, his audience understood and broke into laughter.
 
 Zhou explained: Since shortly after the collapse of the Wall Street bank Lehman Brothers last September, global markets have experienced volatility that has often seemed to take a "www" shape.

Now, Zhou said, we are starting to hear more and more economists talking about a V-shaped recovery, although some remain cautious because they are worried there may be a so-called "double dip" in the financial crisis, the worst since the Great Depression.
 
Whether it's a V or W shaped recovery, Zhou joked, the ultimate solution to the crisis is China, eg "CN". 
 
Zhou noted that China's urbanization in the next few years -- turning villages into mordern towns or farmers moving to nearby cities to become workers -- will be a key attraction for foreign investments in China, which will in turn help China continue its contribution to global economic growth.
 
From urbanization comes consumption. And if China can produce enough consumption to help lift the global economy, www.V.cn may sum up the real path of this financial crisis. Or at least some Chinese bankers are banking on it.

With deal flow suddenly picking up, it's getting difficult to fix lunch or dinner appointments with bankers in Hong Kong during the work week, because they spend more time in Beijing, Shanghai and other mainland cities to have food or drinks with the potential China clients.
 
Last week, one Hong Kong-based private equity dealmaker canceled an appointment in the
former British colony at the last minute, saying he had to remain in Beijing to wait for a Chinese entrepreneur to sign a deal.
 
In an apology email, he said: "To be honest, Hong Kong to me is purely like a weekend destination these days."
 
Another friend who works as a private equity investor once joked he and many others are merely "so-called Hong Kong-based" workers.

The fact is, more and more "Hong Kong-based" financial professionals have started to print
double addresses and telephone numbers -- listing Hong Kong and either Shanghai or Beijing contact details -- on their name cards.
 
Hong Kong used to be a focal point in Asia for opportunities in property, telecom, retail and financial sectors, but the epicenter has clearly moved to mainland China in recent years due to the surge in opportunities and cheaper valuations there.
 
"There are no deals in Hong Kong now. It's just the so-called Asia headquarters for many banks. The fact is, almost everybody is travelling," said a financial industry friend.
 
"Hong Kong is still the financial centre without a doubt, but it remains as the financial centre because of China," he added.
 
For many years, Hong Kong called itself "Asia's World City" to promote its advantage in international trade, but some bloggers have begun to joke in online postings that Hong Kong is now
becoming "Just Another Chinese City".
 
Hong Kong's low tax rate is a key reason why many bankers spend five days a week in China but still want to be officially "based" in Hong Kong. If Shanghai were to allow low tax rates for foreigners, that might quickly change. 
 
Indeed, airlines serving Hong Kong, including Cathay Pacific and Dragon Airlines, must be happy to see the current trend continue -- shuttling those executives to work in the mainland and back to Hong Kong for the weekends.  

But Hong Kong taxi drivers have started to complain and feel nervous about the rise of Shanghai and Beijing. Twice I have been asked by drivers something to this effect: "So, you are from Shanghai? Then why do you come to Hong Kong to work? Shanghai is the future. People will soon forget Hong Kong."

My answer? "Don't top leaders in Beijing always say 'Hong Kong's tomorrow will be better'?"

Photo Caption: Skyline view of Hong Kong island. Photo by George Chen

Photo Caption: Brian Gu, JP Morgan's head of M&A for Greater China, speaking at the Reuters China Investment Summit.