Where are the thieves?

Cheap loans were bundled as triple A financial products for sale. Not unlike tainted milk. Rating agencies collaborated to give them the green lights. Govt regulators cheered them on or went to sleep. And the public were conned to part with their billions and trillions. And the thieves got rich, outrageously rich. Why is there no question being asked now, and why is it that no one is guilty for creating such a colossal financial mess? The anger in the main streets of America is understandable. The second point is equitable compensation. The super talents must be paid their worth in salary, bonuses, perks, stock options and golden parachutes. They deserved them more when they make millions and billions for the organisations. Pay must be performance linked. These sound so familiar and logical. Make billions paid millions. What happens if lose billions? Oh, sorry, just a bad decision. Give me my golden parachute. Bye. This is about the worst case scenario for corporate failures, the bankruptcy of mega institutions, the lost of billions and trillions of dollars and the lost of jobs for all the employees, not forgetting the destruction of a financial system. Where are the responsibility and accountability? The fat cats wanted to be paid in gold when they performed. But if they failed to perform, all they lose is the job. Is this an equitable formula? Gambling on billions of other people's money, risking other people's money, with only huge gains when the bet is right and nothing to lose when they lose? I sure love to be in such positions. Is it time to revisit such a sure win formula for success?

Reaching for the Pinnacles

The Pinnacles in Duxton Plain and many of the new HDB flats in town are priced to resale market prices, at a small discount. When has the policy of selling HDB flats at a subsidy, to selling at market subsidy, and now to market price discount took effect? What the latest policy means is that the price will keep going up depending on the demands. If people are still so crazy about pushing HDB prices to the pinnacles, let me remind them that the main cost of the current US financial crisis is due to high property prices, prices beyond what the average Americans can afford. Even the top traders in Lehman Brothers who were buying million dollars homes, more than one, were caught in the crisis. They borrowed money using their Lehman shares as collateral. When the shares became worthless, they were stuck with million dollar debt. Some several million dollars in debt because of the high gearing and high mortgages. We are in a similar situation. It will screw us when the time is ripe. The hardlanders' income is not going to rise like the million dollar man. In fact many were told not to expect any increases or employers were told not to raise their pay. How could they afford HDB flats that are going to cost more and more? Now, why must HDB flats keep going up just because the market prices are up and not because of cost? Profit is one reason. The next is the need to shore up the property prices so that those with expensive private properties can sell them at ever higher prices. Who are these people with vested interests to keep property prices going one way, up, up and away? The real losers, yes they are the losers, are the hardlanders. They will have to keep paying for the same little space in the air at higher prices. It will come, the bubble must burst. When salary does not rise as fast as the prices of HDB flats, prepare for the bust.

JBJ - The most enduring fighter

Yes, JBJ passed away finally. He fought a good fight. May he rest in peace. He is the most enduring fighter in the Singapore political scene. His political career stretched as long as those of LKY. And he fought LKY all the years, in elections, in Parliament and on the streets. Parliament will miss him. There is always the possibility of him returning to Parliament after he set up his new party to contest for election again. Now he is gone. Amen.

Paying forward - Electricity tariff 21.5% hike

Oil prices falling but Singaporeans are going to face the biggest electricity tariff hike in 8 years. And they are expected to pay 21.5% more for the rest of this year. And Singaporeans should count themselves lucky. The Energy Market Authority CEO Khoo Chin Hean said it could have been worst. Luckily we buy forward and thus only need to pay a smaller hike. Singaporeans got to be thankful. I think we should find a way to buy spot when it is cheap and buy futures when it is cheap. Can there be a way that does not restrict the buyers to just buy future when it is high despite cheaper spot price? Storage and delivery?

Bail out plan rejected

The Americans rejected their leaders. That is what it amounted to. And Dow Jones plunged 777 pts. The years of lawlessness, abuse of power, greed, corruption and lack of control over the recklessness of the Bush govt and the greedy men in Wall Street finally caught up. The Americans are not going to be led by these greedy and irresponsible men. Any lesson to learn? Don't forget that we are a small copy of corporate America.

Time to fine the SGX

xyIt is so easy to throw fines at small investors and remisiers for mistakes that they make. What about mistakes made by SGX? Should SGX be find for mistakes or non compliance to procedures or for sloppiness? It is time that MAS start to monitor and imposed fines on SGX for not doing what it is supposed to do. Only then will it be fair.

Opportunity to export our supertalents

The financial turmoil in the US provides a golden opportunity to export our talents to Wall Street. The fat cats there have discredited themselves so much that soon they will be behind bars if FBI were to do their due diligence. There will be a vacuum for supertalents in finance and cooking the books. We could export some of our top talents there, at a reasonable prize of course. But cannot be too cheap or it will be disgraceful to their talents and pride. Just ask for half the price of the current batch of fat cats will be quite reasonable. This is a new opening that will never come again in their lifetime or here. Paradise just cannot afford to pay them that kind of money and many are stuck as no other organisations could afford them anymore. We can start by fixing them up in Merrill Lynch before we sell out to Bank of America. Then there are Citibank, UBS and Barclay where we have substantial shareholdings. Time to tell them who is boss or the majority owner.

Want a Ferrari?

Few weeks back, the real race in the North South Highway saw a Ferrarri hitting dirt and Mercedes came out on top. Last night, the F1 night race again saw Ferrari hitting the wall with Massa dropping to the tail end and Raikkonen crashing out. Ferrari will still be a prized possession in paradise here. We are the best place for the affluent to flaunt their wealth, drive their Ferraris around in comfort and without fear. Paradise is good for Ferrari owners. Malaysia is also good for people who want to own Ferraris. And there are so many Ferraris for them to pick and choose along the North South Highway. Just place the orders and someone will pick it up for you at a small fee. Ferraris are not cheap cars to run and upkeep. Only the rich can afford it even if they can pick them up for free along the highway. And if they do not want a Ferrari, they can pick from the mobile stable of Lamborghinis or Maseratis or other exotic cars. I t is good to be rich and powerful whether you are in paradise or north of paradise. You can have your Ferraris if you still want them. The rich Singaporean owners will deliver them to you personally.

Compressed time - the new Ethos

Unwittingly many have been submerged under a new lifestyle which often is called the rat race. Everyone is trying to get rich quick, at all costs. Life is no longer a casual stroll in the park. Graduating from university at 25, one only has another 20 or 25 years to accumulate the wealth to live for a life time, or to prove that one has the talent to collect handsome doles for the rest of one's life. By 50 or 55, one either has it or did not. By then it is over. The compressed time that an individual has to cope with is also translated to the behaviour of institutions. Institutions too need to get rich quick, or at least the CEOs must, to prove his worth and collect his bonuses. And his short term goals will transcend throughout the organisations, affecting everyone. Targets were set to measure performance yearly or quarterly. Non performers were shown the exit as quickly as they come in. Only the very privileged few have the luxury of long term, that they are judged or measured over a long period of time. By then nobody will remember what actually happened or be around to tell the story. Is the get rich quick ethos the cause of the recent financial crisis? Fingers are being pointed at the fat cats in Wall Streets and the new whipping boys, the Relationship Managers of local banks. These are now seen as unscrupulous, unprofessional, untrained, unethical, unreliable crooks, lurking in the corners waiting for some unwary ah peks and ah mahs to walk into the banks, and to pounce on them for their life savings. Are they the one solely to be blamed? Banks are an old institution that grows strong and steady overtime, collecting deposits to lend to customers and making the difference. A small profit but a safe and tested operating principle. The banks of today are financial giants that deal in everything that can make money, the quicker the better. Some banks even chased their small savers away or charged them a fee for putting too little money with them. This is the early face of this new ethos, greed. And greed knows no bounds. Money must be made at all costs. Jackson Tai of DBS once lamented in a dinner speech that the industry is tainted with many unethical and unscrupulous practices by its members. No one stood up to challenge him. I think many are just too guilty to look up at him. Yes, banks even stooped to poaching and stealing clients from each other, even from within banks or their subsidiaries. High net worth clients are the prize catch of every banking officer. They will steal from their best friends sitting next door, by hook or by crook. And the management encouraged it or were accomplice to such unethical practices. Why should people be so shocking about the collapse of the American financial institutions and the damage it is causing to the ah peks and ah mahs? When greed is the principle of survival, when getting rich quick is the moral of this new ethos, who is to be blamed? Spare the Relationship Managers. The rot is at the core.

Is it good news or bad news?

Only 1 out of 6 planned ERP gantries will be built in Nov. And ERP charges in Shenton Way/Chinatown area will be reduced by $1. Some called it good news because they will be hit by a stick instead of a sledgehammer. Still got whacked. Some said it is good news because the authorities are listening and willing to change. Looking at it from another angle, it is really bad news. Bad news because the thinking and planning processes were not in gear. Bad news because something like this should have been carefully thought through in the first place. A similar approach is what the SGX had done this week. Whack with a hefty $50k fine first, talk later. The regulations will be reviewed in one month's time. Can decision making be so casual and callous? This is Singapore, not some newly independent third world country. Why has the traffic condition improved so drastically against what was planned? Why was there an overkilled or a plan to over kill? Just do it is good for the entrepreneurs or risk takers. Decisions of such nature should be carefully considered by the best brains and when implemented, must work. Not try try lah.

The Americans are angry

NEW YORK, (AFP) - - An angry US public and Congress demanded to snip the rip cord on golden parachutes used by fat cat CEOs to escape Wall Street's mayhem.... Their push caught the mood of a nation sickened at watching the titans of finance walk away from Wall Street disasters not only unscathed, but enriched.... Those gigantic pay checks, bonuses, and Midas-like farewells encapsulate what the public sees as Wall Street's greed-is-good philosophy.... Public anger at such figures underlies skepticism about the entire government rescue. "We'll never see that money again," said Mathew May, a 24-year-old economics student who skipped lectures to attend a small demonstration at the iconic bronze bull statue near the New York Stock Exchange. "They deregulated the markets and ran wild. Now we're bailing them out." Arun Gupta, an editor of alternative New York newspaper The Indypendent, said there was "socialism for the rich and dog-eat-dog capitalism for the rest of us." "Think about it," he wrote in an email that quickly circulated to thousands of activists and appeared on several websites. "They said providing healthcare for nine million children, perhaps costing six billion dollars a year, was too expensive, but there's evidently no sum of money large enough that will sate the Wall Street pigs." But left-wingers are not the only ones speaking out. Newt Gingrich, the fiercely conservative former speaker in the House of Representatives, wrote in the National Review that the bailouts, likely to top a trillion dollars, smack of "crony capitalism." "Doesn't that mean that we're using the taxpayers' money to hire people to save their friends with even more taxpayer money?" he asked. Forbes, the magazine for and about the rich, also says enough is enough.... " One worker in the New York finance sector, who asked not to be named, told AFP that his colleagues are as angry as the general public. "A lot of people are very upset that managers in their own companies and captains of industry in other areas made some really, really bad decisions," he said. "The most insulting thing is the golden parachutes where these jackals from Fannie and Freddie, having destroyed the company, walked away with millions ... It all comes down to greed." The above are just samples of angry comments by Americans at the greedy fat pigs that threw the American financial sector into disarray.

Unique visitors

Just for information, for the month of Aug we have recorded the highest number of unique visitors for the blog at 8,478. Unique visitors only counts different bloggers visiting and does not include the number of repeat visits or multiple hits per visitors. For Sep to date we have 7,638 unique visitors and given another 4 and a half days to go, we could hit a new high. Cheers.

Leave it to the supertalents

If you really want to find the best supertalents, go to the US, and New York in particular. There you will have the best legal minds and the best financial minds working hand in hand to make the most money for each other. They were the experts that literally control the financial systems of the US and the world. The US and the world are at their mercy. And they pay themselves in the billions annually. That is how good they are. They are all in big deals and mega deals. S$600k is really peanuts to these supertalents. And look at what they have done? Yes, the world's most serious financial crisis can only be made by the supertalents. We are talking about trillions of dollars in jeopardy, maybe the collapse of the world financial system. The US govt's rescue package of US$700 bn could just scratch the surface of this problem. We have not seen anything yet. This is the consequence of leaving your future in the hands of the supertalents. Locally, we have our ah peks and ah mahs seeing their money disappeard in the hands of our talents. Money invested in sophisticated bonds and notes recommended by the experts. What is the moral of the story?

Above the Law

I have been posting about the dictation culture here. This is a mindset that people assume that they can do anything they like, introduce foolish laws and regulations, no matter how obnoxious or atrocious, and think they can get away with it. And they did, so far so good. This attitude and culture is not new and is very prevalent in communist, dictatorship and authoritarian states. And we are one, according to a prominent ST editor. Even in democracies, such things happened. But they have checks and balances to make sure that abuses of power and positions can be checked. The people who made laws and regulations think that they are the law or better still, above the law. They made laws and others obey laws. No one is there to judge them or above them to kick their arses if they floundered. To prevent such nonsense, no one must be allowed to be above the law. There must be institutions that can play the checks and balance role.

Make a mistake, $50,000 fine!

This is another explosive issue. I heard that the remisiers are extremely unhappy about this new ruling that they can be fined up to $50,000 if they make a mistake and sell shares which they did not have in the Buy In market. Many were just shaking their heads in despair. The value of the mistake could be less than a hundred bucks. And for such a ruling to get through, it must have gone through many rounds of discussions among many supertalents. And it is passed. Great piece of regulation.

Changed Singapore Dream: Fleeing The City of Possibilities

This is the heading of an article posted at TOC today. I read the 17 comments following this article and form the impression that we are losing the people. The comments were expressed by 17 vocal forumers. And their sentiments are probably felt by many Singaporeans. Why are we losing the people in the midst of such great material wealth? Why is this losing touch with the people, being felt by so many, but totally ignored by those at the top who still think that everything is ok? Which is the real illusion? At the rate that it is going, our NSmen may not do what they are expected when called to do. The heart is sore and no longing there. Who says only rulers got no heart? The people at the bottom are also losing hearts. And we are plodding along happily in delirium.

caveat emptor - minibonds

Ultimately, it's buyer beware (caveat emptor) I REFER to Tuesday's report, 'MAS tells banks to give priority to worried investors'. It may be presumptuous of Mr Tan Kin Lian to assume that the banks erred in selling structured products to retail customers. These products are regulated under the Financial Advisers Act and the Securities and Futures Act. Only qualified advisers can market and give advice on such products. They must have a reasonable basis for any recommendation that is made on structured products and must provide investors with a fair description of all material information.... Structured products are not suitable for all investors. Each product can exhibit very different characteristics as well as associated risks and rewards. They may appear to be fixed-income instruments, but may contain embedded options which do not necessarily reflect the risk of the issuing credit. These options may be 'plain vanilla' or highly leveraged exotic options. As each is unique, the risks inherent in any one structured note may not be obvious. Hence, read carefully the prospectus or pricing statement, which explains the risks, tax treatment and other important information in detail. Ultimately, it is your responsibility to protect your own interests. If you do not understand how the product works, seek clarification with your adviser. Don't buy anything that you do not understand. Jag Kuo Soon Yong The above was posted by sgnews in Singapore kopitiam. I can agree with Jag Kuo's argument about caveat emptor and buyers should not buy unless they know what they are buying. In reality, how many people know what they are buying. But that is beside the point. What if the seller peddle these sophisticated products to the ah pek and ah sohs which could barely understand what financial instruments are? Targettting them in first principle is already wrong. Now, how many of those affected belong to such a category?

The people are angry

Online and offline petitions by angry people to claim back money lost or to be lost in financial derivatives arising from the collapse of Lehman Brothers and other American institutions have started. And MAS is looking into it. In America, the FBI is also looking into it for fraud by those organisations selling such bonds and notes. At best I think we can look from the angle of not enough due diligence and misrepresentation. This is the first time such an action is being pushed to the frontpage news by aggrieved investors. It may be time for MAS to look at failed IPOs that went down after a few years on listing. Some even reporting losses within 2 years from listing when the prospectuses were full of praises and recommendations on how well the companies were doing. There must be lack of due diligence or even misrepresentation or even fraud in some cases. The investors must be compensated. The organisations involved in the listing of such failed companies must be held accountable and to compensate the investors. So far they have been getting away scot free.

Life is party in Paradise

If only I were the director of 10 companies or chairman of a few companies, and collecting millions and doing practically nothing, life will be so wonderful. Not only playing golf in free time or travelling under company expenses, it is party all year round. Now the world's biggest bash, a $100 million party is in town. The F1 promises to bring in the world's rich and famous here, the well heeled and well connected, to party. And for these somebodies, you got to be somebody, they are going to party for free. All expenses paid by the banks, big organisations and sponsors of the events. To live in the best hotels and hospitality suites, the best seats to watch the race, the best food and companies, wine and dance the night away, all for free. As for the nobodies, please dig into your pockets and find that $300 or $3000 to buy the tickets. And they will have to buy their own drinks too. Life is great in paradise, if you have made it.

4th least corrupt country in the world!

Singapore is the 4th least corrupt country in the world. Only 3 countries, Denmark, Sweden and New Zealand were better than us. In Asia, we are the least corrupt. Hongkong and Japan lie quite far away from us. Not a bad achievement. To take stock, countries that are more corrupt than us are Finland, Switzerland, Netherlands, Australia, Canada, Austria, Germany, Norway UK, US and many many more, in fact the rest of the world. The Americans, the Brits and the Europeans should stop criticising us about corruption. We are less corrupt than them. But it is all relative. It would be better if the survey by the Transparency International's annual Corruption Perceptions Index said that we are not corrupt. The survey just says that we are not as corrupt as others.