5/28/2018

Tharman is right - Conversion of reserves

 DPM Tharman once told Parliament that drawing down past reserves was “in essence a conversion of past reserves from one form (financial assets) to another (state land), rather than a drawdown of reserves”.


The above was quoted by Phillip Ang in his latest article on the drawing down of national reserves. In his article Phillip argued that a drawdown is a drawdown. A drawdown of $X billion of cash from the reserves means that this $X billion will be minus from the national reserves, thus the reserves will be lesser by this amount. But according to Tharman's explanation, the drawdown is actually a conversion of one form of reserves to another form, from cash to assets.

Now who is right? Look at this definition on the nation's reserves and the answer is quite clear.

Definition. The Constitution of Singapore defines reserves as “the excess of assets over liabilities of the Government, statutory board or Government company”.  The reserves comprise financial assets such as cash and shares as well as physical assets like land and buildings.

Clear? Tharman is absolutely right in this case. Drawing down the reserves to convert them into assets did not reduce the nation's reserves as many idiots in Parliament believed to be so. And as such they are so scare to touch the reserves as it would be a drawdown on the reserves, a frightening thing to do. Now would Tharman do the honour to educate the ignorant boys and girls in Parliament that they are wrong and stop behaving so stupidily talking without knowing what they were talking about? 

The conversion of cash reserves is not necessary a depletion of the reserves if the reserves are used to build assets that appreciate in value or could make more profits than the reserves lying inactive as cash and earning a miserable 1% interest. Or worse, if the cash are used in gambling aka investment and loses every cent of it. Converting cash in national reserves into valuable money making assets that make greater returns is not drawing down on the reserves.

The call to draw down the reserves to build T5 and Tuas mega port cannot be a drawdown on the reserves unless these are airy fairy schemes that would lose money. In that case these two white elephants should not be built at all, and the people should not be taxed unnecessary, the govt should not recklessly go around borrowing money to build white elephants. Does anyone disagree that the T5 and Tuas mega port are credible and worthy projects that would appreciate in value and bring in more profits or returns for the money spent? Oops, not money spent but cash reserves converted into asset reserves? If they believe that theses are worthy projects, then what is the problem? Why park the reserves as cash to be used in funny investments that only lose in the hundreds of millions or billions when projects like these could bring in more profits and beneficial to the country? Why defend the using or touching of the reserves so fiercely? Is there other reasons to do so that the people do not know about the state of the reserves?

If Tharman is right, all the nonsense being spouted in Parliament must made the speakers looked silly and they should rightly call for the drawdown of the national reserves to be converted to good money making assets as it would not draw down the reserves. Tiok boh? 

All the fools in Parliament defending the drawing down of national reserves to build T5 and Tuas on the false premise that it would draw down the reserves, please kee chiu.

The hysterical and dumbfounded defense of the national reserves from being drawn down is likely to have more unspeakable reasons for doing so, as it is crystal clear that conversion of national reserves into good assets is not a drawdown. It is a plus thing, a positive thing.


28 comments:

Adam Of Eve said...

I drawdown $1 billion from my savings account and buy shares in the open market (at very high price) - this is CONversion of one form of my savings to another form of savings (called investment). But I cleverly sold my shares at a very low price (suffering a huge loss). This is also CONversion from one form (higher value) of asset to another (lower value) form of asset. And this is not called investment but GAMBLING or CONJOB!

The question a perceptive investigator like Sherlock Holmes would ask until he gets the answer (Truth) is:

WHY DO YOU BUY HIGH AND SELL LOW IN ORDER TO MAKE A HUGE LOSS?

The Truth or Fact or Answer is SOMETHING IS NOT RIGHT.

No one would intentionally make a huge loss in INVESTMENT.

Then why did you do it?

Because My Friend sold the shares to me at high price. Then his friend bought from me at low price.

Oh I see! Is this how you make money without people knowing it?

What make money? I lost money big time! Don't you ever say I make money! Is that clear!

Anonymous said...

having many extra parking space can
help in emergencies landing.

Anonymous said...

The severe level of kleptocracy revealed after the fall of Malaysia's Najib government underscores the essential need for an utterly independent check and verification of a country's reserves.

Anonymous said...

RB, that's why Mahathir asked that Ah Long to get out of his office within 30mins of discussions. Dr M had seen the True Color of this Cunning Shylock Loon. Dr M knew that Loon ' want his pound of flesh' back ( as depicted in Merchant of Venice by William Shakespeare). This so called Merchant of Silapour wanna trick Dr M into believe that pound of flesh is worth. LOONY loon only to be shooed out like a crying baby claiming that his pound of flesh only be notice & it worked in his Sillyland of Dafts as he don't understand why his dafts people accepted his call for pound of flesh unreservedly.

Anonymous said...

Agree with Adam. Losing a few hundred thousands is easy. To lose hundreds of millions, consistently, requires a lot of talent, trickery and treachery and scheming.

Ⓜatilah $ingapura⚠️ said...

I will bet you that they will not draw down on the reserves.

#1 Rule of being a hardcore CAPITALIST:

DO NOT CONSUME YOUR "UNTOUCHABLE" CAPITAL Singapore's reserves are "untouchable capital".

Anonymous said...

Why drawdown the reserve when u can tax the population further?😰😰😰😰😰

Ⓜatilah $ingapura⚠️ said...

@1053

...and borrow too. Singapore's public debt (no foreign owners) is around 112% of GDP.

BTW, the CPF is an ongoing TAX....just in case you fuckers let your minds slip into believing that that money is "yours" ;-)

Anonymous said...

National reserves belong to the people and the country. The government is only a custodian of these reserves. Therefore the government must in good faith and in sincerity with the people's trust keep the people informed with an annual financial report of the status of its reserves at the end of each financial year. Failing so will lead to suspicion that something is amiss and fishy and let the people to feel strongly that the integrity, ability, capability and sincerity of the authority behind the national reserves must not be in doubt but above suspicion. The people and country will not accept any farcical reasons for not publishing the annual report of the status of the national reserves at the end of each financial year.

Eagles Eyes

Adam Of Eve said...

Lessons Learnt From 1MDB

As the story unfolds more openly and intricately, the One MDB Scammel begins to drive home valuable lessons for Singaporeans.

The word "Scammel" is a new word for a scam that resembles a camel, sticking out like sore thumb in plain view in the expanse of the desert, and it is so hardy that it could withstand the desert heat and sandstorms; it also has a hump and two internal waterbags to keep it from dying of thirst.

By now, everyone should have already known who the main actors in the 1MDB scandal are. Just to jolt your memory, they are:

1. The axed-Prime Minister of Malaysia, Najib Razak who is the Father of 1MDB.

2. There is also the famous and very elusive Malaysian playboy, Jho Low, who tried to woo Miranda Kerr with expensive gifts.

3. Another key figure is, of course, Najib's wife, Rosmah Mansor (man with a sore?). She helps to spend the money by buying highly expensive handbags, jewelleries, paintings and converting cash into foreign currencies, and keeping them at arms-length handy so that when there is a need to bribe someone, the foreign currencies are there ever-ready to keep some important mouths shut.

4. Plus thete is the step-son of Najib Razak, Riza Aziz. Riza Aziz (son of Rosmah by her previous husband, Aziz) is the producer of the film called "The Wolf of Wallstreet", that cost him US$100 million (funds from 1MDB) to produce but reaped many more US$millions profits into his own bank account.

Besides this Gang of Four, of course, they must be many others involved too. Those are the politicians, civil servants, lawyers, bankers, negotiators, leg men and women. Together, they form an intricate network of high class globe-trotters, big time "investors". Heard of Sovereign Wealth Fund-Managers? If you have not, then pick up a stone and throw at Temasek Holdings or GIC. You are bound to hit at least a dozen of them.

Then there are off-shore shell companies in some god-forsaken remote islands in the middle of the oceans. These companies helo to cover the tracks of how the money flow and at the same time "legitimized the transactions in a round-about way, so as to avoid, prevent and frustrate detection of law enforcement detectives.

So, what are the lessons to be learnt?

A. Never trust Big Time Investors?

B. Never assume that people holding high office will not be corrupted. Corruption is innate, both nature and nurture.

C. Never believe in off-shore companies in "wonderland" that keep you wondering.

D. Scams are deliberately planned by highly intelligent people, with legal advice and coverage. They do not materialized out of nowhere.

E. Never trust highly intelligent people running your life, especially using your money for their own benefits. To know who these people are, all you have to do is to find out the speed at which they become millionaires!

F. Nepotism is the very first signal for deep-rooted, extensive, incorrigible corrption of the Highest Order.

There are more lessons to be learnt. But the above six lessons will suffice for now. Otherwise, daft Sinkies would not be able to absorb. They will just yawn and fall asleep.

Anonymous said...

Hi Adam.
U r spot on!
In Sinkieland, never trust Ah Long - a loansharker who would ruin your life. His minions r Loansharks runners. His Sillicens r dafts sheeple-no hope Liao.

Anonymous said...

DO NOT CONSUME YOUR "UNTOUCHABLE" CAPITAL Singapore's reserves are "untouchable capital".

May 28, 2018 10:46 am

You believe in this bullshit, that they never touch the reserves? Where did they get the big money to gamble big time?

The reserves don't belong to the people just like the CPF don't belong to the contributors.

Make a quick guess, guess they belong to who?

PIGS 81 (Post Independence Gen Sinkies 81) said...

@ Adam (sinned bc) Of Eve 11.46am
>>> There are more lessons to be learnt. <<<

They say "Behind (the fall of) Every Man, there is a woman"

That is not part of the lessons btw.

The actual lesson is:

Jiakopi ... (to be exact) Geography Lesson:

"Country of Curacao"

The working language of the "Country of Curacao":

"PAPIAMENTU"

According to wikipedia, "CURACAO" is an island country (441sq km, about 80% the size of Batam island) situated north of Venezuela and at the southern part of the Caribbean Sea and some of its fellow neighbouring countries in that area are the Cayman Islands etc.

Wikipedia also states that Curacao practises "Open Arms" pro-business policies.


Btw, for avoidance of any doubt, "JIAKOPI" does not mean "MAKAN KOPI or whatsoever" but simply a literary HOKKIEN translation of "GEOGRAPHY" in the old days among bemused lower secondary students during sec 1 and 2 period when encountered with the subject matter aka "GEOGRAPHY" -- sounds alike "JIAKOPI" in HOKKIEN and NOTHING to do with "MAKAN KOPI or KOPI $$$ or whatever" ... HELL NO!

NOTHING TO DO WITH THOSE SORTS OF THINGS!

Strictly "JIAKOPI" aka "GEOGRAPHY LESSON"

Period.

Adam Of Eve said...

@ 1:26 pm:

"You believe in this bullshit, that they never touch the reserves? Where did they get the big money to gamble big time?* ///

To support your point, according to the late President SR Nathan's memoir, he stated that the Reserves was touched 35 times during his tenure of 12 years as the 2nd Key Holder. I read it in one of the reports. Check this out.

Adam Of Eve said...


In an interview with The Sunday Times in 2011, a few days before the Presidential Election, Mr SR Nathan revealed that, in general, projects resulting in the creation or enhancement of usage of land can be considered for funding from past reserves. Such projects include Sers and land reclamation. At least 28 times the Reserves was dipped into during his tenure as Walk-over President of 12 years, being paid with taxpayers' money for almost $4 million a year, basic salary only.

Adam Of Eve said...

Govt launches compulsory CareShield Life while optional ElderShield garners $3.3b with only $133m payouts

By The Online Citizen On 28th May 2018.

Anonymous said...

Reserves already stuck in overseas funny investments or earmarked for minister salaries ... Cannot touch
.. No more spare cash.

That's why need to increase fees & taxes ... Nation building mah ... Why? U fuckers not patriotic ahhh?!?!

Anonymous said...

They are both right and wrong.
Right. Conversion from one asset into another provided the result is more asset.
Wrong. Reserve is for emergency, e.g. during war. Cash is king. State land is worthless during war. Who will buy your state land during war?

Anonymous said...

Knn that is all I can say😰

Anonymous said...

Politicians speak with forked tongue so they can rationalise whatever they wanted the situation to be.

b said...

Once they start to drawdown the reserves, they will not know how to stop. Human nature.

Anonymous said...

Oh, I see, you still sleeping and believe that they have not drawn down the reserves to a critical level? The 28 times or 35 times they dipped into the reserves, how much were taken out and how much were put back in? Did they tell you what were the reasons to dip into the reserves and how much in each occasion? Any one in Parliament ask any question on these or are they busy asking other non relevant questions like little boys and girls do?

Ⓜatilah $ingapura⚠️ said...


@ all:

Changing asset classes is not "cost free". When you convert money to land and vice versa there are significant costs involved.

Yes, we are very liquid. and yes, they are very careful about drawing down on capital. Singapore govt is made up of Singaporeans so they are KIASU. That doesn't mean they can't be reckless. It can happen. Anything can happen, when humans are involved in the decision and action processes.

Anyway, thanks to their Singaporean cultural kiasu-ness, they like the "liquid cash" idea because, as it has been mentioned cash is most definitely KING.

There's enough money there to last around 20 years, if govt revenues are ZERO throught that time. That's a fucking shitload of money. The State of The Republic of Singapore is RICH.

P.S. No, the money doesn't belong to the people of Singapore. The reserves belong in FACT and in LAW (not in your own airhead of fucked anyhow-gasak-buta wrong ideas) to the State of The Republic of Singapore.

Ⓜatilah $ingapura⚠️ said...

@ 932

Questions regarding the reserves will not be answered due to "national security" issues.

Good luck in trying to obtain "accountability" ;-) The PAP is beyond reproach. You shuld know that :-)

There are those who know more about what's relly going on. And then there are those who just vote.

Singapore is a certain way lah. It ain't so bad, not perfect,but not bad either.

can you dig it?

Chua Chin Leng aka redbean said...

Hahaha, now who is talking and what is the real reserves and who is the real owner. If the reserves belong to the State, and they classified your CPF savings as reserves, it also belong to the state.

The other point to watch out for, how much is in liquid cash, assets and CPF? CPF is your money or State money, belong to the govt? As for the assets, how much is inflated value because of the policy of inflating property prices that made the assets in the reserves look so much more but really when asset bubbles burst, the value disappeared in thin air.

Then how much is left in liquid assets like cash and the gambling chips, ie stocks and shares? Many of the stocks and shares are actually negative assets, bought at high prices and book value at those high prices. When comes to liquidation, they could worth only a fraction of the stated value.

How much is really there, not counting the gambling losses?

Can last how many years?

Look for the desperate signs telling you that the reserves is as good and real as a mirage. See how desperate they are to raise fees and taxes and schemes to deplete the people's savings in the CPF with compulsory schemes and openly acknowledging that they have no money, money not enough to build mega projects and you will get a clue how bad the situation is.

Ⓜatilah $ingapura⚠️ said...

@ RB

Aiyah please lah Uncle... have you been living under a rock?

You know lah, Singapore is A#1 "Rule of Law, by Law". CPF is governed via an Act (you already know this what?) and in Singapore they pass laws to do everything "properly", plus the courts also have "leeway" to interpret and apply the law, to be enforced by the enforcers.

Everything in Singapore is above board. So we are told.

It is because of the laws which govern it, that CPF is a "special case".

Don't shit on me. I only bear the bad news. I've been saying for donkey's years that you do not own the money in the CPF account with your name on it.
πŸ€£πŸ˜‚

Anonymous said...

Whether it is drawdown or not, the fact is if we take money from the reserve, the balance in the reserve must decreased. If the reserve cannot be replenished because of losses in the mega port or T5, how can we reconcile with the fact that the money taken out from reserve is still there, just that it is in a physical form?

If we started with $10 billion and take out $9 billion for various projects, and after 20 years, the reserve only recovered to $6 billion, can we still say we have $10 billion?

Ⓜatilah $ingapura⚠️ said...

@ 1053

Try the word trillion instead of billions. Yes, The State is that rich πŸ€‘

C'mon lah, the cuntry is run by our fellow Singaporeans...so they understand what the fuck money is all about. 😜

Thus IMO, we are SAFE. i.e. I disagree with all the naysayers and Redbean.

Very little has been said about the combined private wealth in Singapore. You will shit your pants, and that would be normal.