11/24/2010

Singapore needs Paul Volcker

Dr Volcker, the former Fed Chairman, is in town. Hopefully the govt can bring him on board in some kind of advisory role to curb the madness we have been sucked into. Volcker is famed for his Volcker Rule which forbids proprietary trading and speculations by banks in the financial market. His fear of the menace created by reckless banks which came true during the financial and subprime mortgage crisis has led to the US curbing proprietary trading by banks. His experience on the ground is invaluable. The conflict of interest and unfair advantages of banks in trading and speculation is obvious but blind to those who see short term gains. Singapore has adopted this practice of allowing banks to be thickly involved in proprietary trading or with trading arms as an extension of the banks to dabble in more exciting adventures in the wider financial jungle. The only way to throw out such voyeurism which has ruined the American finance industry is to have a giant like Volcker to tell the super talents that they are going down a slippery slope of no return. There is still time to unwind the mess before the whole financial industry got sucked into the abyss and spin into thin air. The other main fear of the financial industry is the ingenious and crooked ways of writing pieces of papers for trading. Derivative trading is not much different from playing monopoly when everything is worthless and trading with worthless money. A return to real value, assets and industry is the key to return sanity to the intoxicated financial market. We really need a heavy dosage of Volcker wisdom, prudence and thrift policies. Would the super talents listen or are they too high in the clouds and not able to see the mess that the industry is in?

6 comments:

Matilah_Singapura said...

Of all the Fed chairmans in recent history, Paul had the biggest balls to stand up for "sound" "hard money" economics and financial justice.

Goh Chock Tong has made a mess at MAS. Under past more "conservative" stewardships -- before the MAS was "officially" a central bank, i.e. back in good old the "de-facto" days, Singapore Dollar was sound -- superbly hard-asset backed.

What is likely to happen if Volcker introduced his policies: The big fat crash that is NECESSARY to clean out the shit (toxic debt) in the system, and to give the financial world a good dose of DISCIPLINE.

OK, people will lose their jobs, their houses, some will go broke -- fuck them all. They've been living their lives based on cotton-candy and air at the expense of poor people's purchasing power -- chalking up debt upon debt and calling that debt "assets". Madness. Time for justice.

Give Volcker citizenship, sack Goh Chock Tong and replace him at MAS with this intelligent and courages foreign talent (you could probably pay him less than Goh too -- in deflated US dollars)

Anonymous said...

I agree with Matilah, particularly his second last paragraph about people losing homes and jobs.

These people have been living unrealistic lifestyles financed by debts. Flipping properties and changing cars on borrowed money, consumption of other luxuries on credit to be paid off by future earnings.

That kind of lifestyle is basically copied from the West, particularly the USA, and the Americans are now realising that the day of reckoning has caught up with them. When factories and jobs shifted overseas to cheaper destinations, loss of earnings will result in great financial difficulties.

But, it is no use telling them this. Not even Paul Volcker can change their mindsets at this stage.

Anonymous said...

Yep, put in 20% as downpayment and own and asset of $1m.

The most highly geared people are the big earners in the finance industry. Big pay packets, big bonuses...and big, big mortgages.

Don't they ever lose their jobs, or they will lose their pants as well.

Anonymous said...

Haha...
the best brains in the world are running the world financial system with controls and supervisions by governments and regulated by numerous World Bodies, nothing will go wrong.

Anonymous said...

Yes, in theory nothing should go wrong with all the best brains running the financial system of the world and all the Government controls and regulations in place.

But when the best brains becomes corrupted and drunken with greed, and in the process hijacking and interfering with Government controls and regulations, through cronyism and favours owed, everything will go wrong.

Anonymous said...

With Regimes in cahoot with crooks and world bodies staff by shenanigans, the world is in chaos.
What are the gods doing?