Electricitiy tariffs hike

Electricity tariffs will go up by 3.3% for Jan to Mar 2011. Data reported in the Today paper shows that there was a 5.4% hike for Jan to Mar 2010, 3% for Apr to Jun, 2.42% for Jul to Sep, a fall of 3.3% for Oct to Dec resulting in a total hike of 7.5% for year 2010. It was also reported that the decrease of 3.3% was due to oil price falling from $102.35 to $95.41 in the third quarter. Since then oil prices have been hovering around $90 or below. Oil price for the last few days maintained at $90 but not exceeding $92. This is still below the $95.41 high in the third quarter. If oil price is holding below the $95.41 mark, why is there a need to raise it by 3.3%? Funny right? I am a little confused.

The paradox of political change

Jeffrey D Sachs, Professor of Economics and Director of the Earth Institute at Columbia University has an interesting article in the Today paper titled, America’s political class struggle comes to a head. The key points he raised in the articles were about how deep America has dug itself into the abyss of self destruction. Yes, America did it all by itself. It all boils down to ‘America’s corrupted politics and loss of civic morality.’ Nothing new and very familiar. For once, an American professor is talking about corruption in America and in high places. Thought corruption is only a hallmark of Asian countries like India and China. He said, ‘The level of political corruption in America is staggering. Everything is about money to run political campaigns, which have become incredibly expensive.’ He also said that ‘Amazingly, the richest 1 per cent of American households now has a higher net worth than the bottom 90 per cent.’ I think this could also be true in paradise. And the govt is going for more tax cuts for the rich to protect the rich and their wealth. At the same time, the govt is wasting huge money fighting ‘useless wars in Afghanistan’ and unnecessary weapons systems, but cutting education, health, and other benefits for the poor and the working class. ‘With their backs against the wall, I(Sachs) predict, poor and working class Americans will begin to agitate for social justice.’ He added that, ‘If this continues, a third party will emerge, committed to cleaning up American politics and restoring a measure of decency and fairness.’ Though he admitted that it would take time, he fell short of saying that America is ripe for a Communist Revolution where the poor working class will rise to over throw the elite class. It sounds ridiculous, unbelievable, but if the greenback turns into banana currency, if the working class Americans could no longer afford even to buy cheap goods from China, who knows what will happen. A Communist America and a Capitalist China by the mid 21st Century! Can you believe in that? Anything is possible. The Sick Man of Asia is now the main contender to be the Number One super power and is the main financier of America, and also giving loans to save Euro zone countries. And America is deep in debt that it knows it cannot pay except for printing more money. And this will naturally lead the way to a banana currency. $200 buck for a bottle of coke is on the way. Viva la America!

Loan shark country as told by the victims

I can’t believe my eyes to read this in the forum page of the ST. Amine Delage’s family has been the victims of loan sharks harassment for 6 long years. And their only crime was to buy a HDB flat whose previous owner owed money to loan sharks. For 6 long years they suffered verbal abuses and defacement of their flats. And nothing could be done! Yes, the law could not apprehend the loan sharks. And now we have this public appeal for help! In the meantime they have to leave their children in the homes of their in laws for fear of harassment or harm. Unbelieveable but true. It is real! I lower my head in shame to think that this is first world country.

Western thinking in a Chinaman’s head

China is the most irresponsible emerging power for its failure to rein in the belligerent North Korea. It did not punish North Korea after the sinking of the Choenan as told by the Americans. (In this incident the West has already convicted the North Koreans of the crime but not allowing it to defend itself. The North Koreans have admitted the firing into Yeonpyeong but denied its role in Choenan and wanted an independent investigation to view the evidence. The South Koreans and its allies who conducted the one sided investigation pointedly refused to let them. There is no reason why the North Koreans needed to deny the shooting if they did it. There is no reason to deny an independent investigation if the evidence is convincing.) Every country wants to be friendly with China but it was China that is behaving aggressively. All Asian countries are viewing China’s rise with suspicion and fear. And China is rapidly beefing up its military forces and getting more aggressive in its disputes with its neighbours. The above is standard western American and western views. But inside many Asian heads, including the heads of WOGs and westernized Chinamen, this is the prevailing view that coloured their thinking process. Oops, I meant whiten their coloured minds. No one questions the role of the Americans, Japanese and South Koreans in provoking the North Koreans. No one wants to know the truth in the sinking of the Choenan. No one wants to know how the Americans have been orchestrating and creating the tension in the Korean Peninsula. No one wants to tell the South Koreans to stop their war mongering war games in the front yard of the North Koreans. Now that the Americans has given the green light to unleash the monster of the WW2, to allow Japan to rearm and become another military power, this idea will be accepted as the correct way to go by these Asians with western thinkings in their heads. The remilitarization of Japan is a very dangerous development. The beast in the Japanese people has not gone away and will resurface itself to terrorise the Asian countries and people. Is America just a peace loving country? A sweet darling to sleep in bed with? Nicholas D Kristof has an article to describe the modus operandi of the Americans which he titled ‘Military force is not effective at solving modern problems’. This is what he said, ‘The US spends nearly as much on military power as every other country in the world combined, according to the Stockholm International Peace Research Institute. It says we spend more than six times as much as the country with the next highest Budget, China. The US maintains troops at more than 560 bases and other sites abroad, many of them a legacy of a world war that ended 65 years ago….The US will spend more on the war in Afghanistan this year, adjusting for inflation, than we spend on the Revolutionary War, the War of 1812, the Mexican American War, the Civil War and the Spanish American War combined.’ Is this a benign and friendly super power? Why does it invest so much money and resources in the weapons of war and keeping so many military bases? For tea parties? This is the way the Americans choose to deal with countries that do not tow its lines. It will use force to deal with them. And it will do it again and again, as it has the monopoly of power. Ahh, the aircraft carriers and their fire power! But the silly Asian heads, thinking American or Western, took all this for granted as the order of the day. The flexing of American military muscles and starting wars is a peace loving thing. It is America’s right to instigate and start wars. America is a benign and peaceful power. China is a belligerent power. When America schemed and orchestrated the tension in Korea, it is China’s responsibility to defuse it. By not doing anything, China is irresponsible! What kind of silly heads will think like this?

Child abuse in Singapore?

A letter by a Neo Leng Hui appeared in the Today paper appealing to the MOE to start primary school later. And with full day schools, shouldn’t this be easier? Whatever the ‘f’ reasonings, efficiency, convenience, parents can fetch the children before going to work, blah, blah, blah, the current system demands that many primary school children will have to be up by 6am or earlier to get to school on time. The consequences of a system that compelled young children to wake up at the wee hours of the morning cannot be good. Those hours are meant for nocturnal animals. Even adults will have problems waking up in those hours. But clever adults think that it is ok for little children! Waking up at those hours to rush to schools would mean that the children will have difficulties trying to eat their breakfast. The body system may not be ready to consume meals. And rushing food into the body can be a problem too. Very likely the children will have to pack their food to eat when they arrived in schools in more humanly hours. It is not an uncommon sight to see little children slumping at the lift doors or the gates as they were barely await and trying to go back to sleep again. Some parents have to carry them all the way to the cars or buses where they could knock off again. These are terrible sights and a terrible thing to do to our little ones. But the experts in childcare and schoolings may think otherwise. There are social problems too, in the dark hours of the day. Would the parents feel good and comfortable bungling their little ones out of their way to schools? Would it be more sanely and better for children to spend some decent times together during breakfast instead of rush rush and rush, or when the children were all half asleep? Are we abusing our little children for their own good, to go to schools? The efficient tickling of the economic system is more important than the welfare of the little ones?

Wen Jia Bao’s visit to India stirring a storm

Reading from articles originating from India, the visit by Wen Jia Bao seems to have created a storm instead of bridging relations between the two countries. Even George Yeo could not miss the unfriendly vibes in the Indian media that kept blowing up the differences in the two countries, from border disputes to super power ambition. Both have many similarities, ancient, populous and corrupt in their own ways. One is already a super power and another pretending to be one. There is no need to claim who is more successful or who is a bigger power. There is no need to claim who is number one in this or that. The truth is all out there. India has historical claims over territories that it claimed was hers, and so does China. How this dispute is going to be resolved or can be resolved in the near future is anyone’s guess. India is claiming that China is getting more belligerent and aggressive and is responding by reinforcing its border military forces, including beefing up its air force. It seems that war is the only solution in the Indian cards. One far fetch drama is the belief that China is encircling India by helping to build sea ports in the littoral states of the Indian Ocean. The concept of containment originated from the Cold War between the West and the communist states. This has been proven to be ineffective as no states the size of China or India can be contained in any way. The Americans failed to contain China and at best only to restrict China’s relation with the American allies. But sooner or later, the allies, if they are independent countries, will have their own interests to look after as these are above the interests of whichever super power. Actually what China is doing is to thwart the efforts of the Americans and the West and also to expand its economic and political space. India is hardly in its equation for at least the next 30 years. In many areas, there is simply no contest and India should not think too highly of itself. It should just go on developing its economy and infrastructure. The influence and stature of a country will be accompanied by its economic strength, backed by a strong military. There are many interstate and strategic differences between the two countries. India should learn from the way China break out from the stranglehold of the Americans by economic development and advancement in technology. There is nothing the Americans can do to contain or restrain China short of an all out war. America has failed miserably by wasting its resources in military prowess and hardware and allowing China to grow by leaps and bounds in the economic field. India can do like wise, develop its industries and technology. No matter how much it aspires to be a super power, it cannot be one if its rockets keep falling out from the sky despite having no problems with its design. Get the basics right, strong economy and military, and all things associated with super power will fall into place. Having a noisy media talking nonsense and creating more animosities would not turn India into a super power. Militarily the US is still the undisputed super power. Economically it is a bankrupt super power. It is in a very precarious state where it could not produce enough to pay for all its adventurism except by printing money. The G2 is not coined for nothing. It recognizes that at the top of the heap there are two super powers. The Chinese may not be as powerful as the Americans militarily. Financially it is the undisputed super power. It helped to ward of the financial crisis of the late 90s. Today China is the most sought after Santa Claus of the financially strapped countries. The US is a pauper, Japan is not the Japan it once was. So is Germany or any other European country. No need to mention India. Only China has the financial muscle to pull the sick European countries out of the quagmire. Even if there is a property bubble burst in China, which the West is hoping everyday and eager to say I told you so, the incompetent Chinese can never manage their economy, the huge cash reserves will pull them through. No need World Bank or IMF. The rest of the poor ‘rich’ nations are equally impoverished to be able to lend a helping hand even if they are willing. This is what China is today. No need to claim super power status. The European knew who has the dole.

Singapore logic tak pakai elsewhere

The supreme Singapore logic is unquestionable inside Singapore. This simple and clear logic only Singaporeans can understand. Some examples like privatized companies are run privately with no govt interference are easy to understand. The HDB, privatized govt hospitals, transport companies, are all run under commercial disciplines and using the logic of profits and nothing else. The banks, stock exchange, universities, national newspaper etc etc are independent from the govt. They make their decisions based on their own commercial and business interests. When the same logic was applied in other countries, somehow they could not understand how our logic and reasoning worked. They kept messing up by insisting on believing that our govt linked companies are part of our govt and controlled by our govt. In Thailand, our purchased of their telco from Thaksin hit a wall. They claimed that their security was compromised by us. How ridiculous. Then there is Australia who could not separate our Stock Exchange from our govt. They did not like the way our govt functions and implicitly thought that our exchange is less worthy too since it is associated with the govt. And in Indonesia, just because shares were held by two Singapore owned companies, they simply lumped them together as one entity and accused us of collusion, monopoly and all that jest. Now their courts even ruled to confiscate the assets of our companies. Luckily our head offices were not informed and they can’t do anything about it. If our head offices had been informed, they would have taken everything away, legally of course. Is this an issue of misunderstanding or a kind of difference in perception? Or is it culture and different way in thinking? Or is it because of different world and different world view?

Government is serious business

The communist countries have their best men and women in govt services. The western democracies have their attractive and good looking men and women in office. One selects the best based on their intellect and abilities. The other uses popular votes to vote in the best looker or talker to look good on TV and make lovely speeches. Singapore modeled its govt on western democracies but deviated by choosing the ‘best’ men and women to be in govt. This has served the country well for many decades. But the problem of getting the best in govt is hitting many road blocks. For one, not necessary the best will want to stand out for one reason or another. This has resulted in the ‘best’ being the best of the willing. Another major problem that marred the selection process is the dearth of political talents and leaders. The consequence is that many have no choice but duty bound to stay on even when they are not in the best of condition, physically. Some could be hard of hearing, walking or even making a speech. But they sacrificed themselves for a noble cause. Some even have to take less money home. Pathetic is the word. On the other extremes we may find children in govt as well. These must be very exceptional talents to be selected and elected by the people to serve them and the country. They are bright and clever but may be lacking in experience and wisdom in some cases. Experience and wisdom do not come about by reading books alone or an inborn thing. These are the mistakes and adversities one encountered, directly or indirectly, over time that make a person wiser, more circumspect, humbler and able to appreciate the problems and difficulties and meanings of life and living. Govt is not child play and we need the best of the best to govern the country and make life better for as many as reasonably possible. We cannot have half ins and half outs in the govt. Agree that the best means many things and different things to different people. The people and the quality of their life shall be the best to judge what is best or betterer for them. A big contradiction in this quest for the best to serve the country and people is to have part time MPs but with a pay that is not part time. No matter how talented, when a job is part time, it is part time.

Sick Man of Asia playing Santa Claus to Euro zone

The PIGS countries in Europe are counting on the Sick Man of Asia to bail them out of their financial woes. While America is spending its financial resources starting wars and fighting wars, China is extending financial aids to countries that asked for its help. And China has obliged the Euro zone by promising to buy up their bond issues. China will come to their rescue to nurse them back to economic health. Portugal, Ireland, Greece and Spain will be the first of Euro zone countries to benefit from China’s huge reserves. More Euro zone countries will soon be queuing up in Beijing for their grants. While this is taking place, some western analysts are writing articles about the impending implosion of the Chinese economy. They do not believe that the Chinese is capable of running their economy in the pink of health. It must collapse and this is imminent. China will soon become the Sick Man of Asia once again. And Europe shall rise, together with the US, to be the economic powerhouses once again. And they live happily together again. And they are pointing fingers at China as an irresponsible power. When will the responsible powers like the US, Europe and Japan coming to the aid of the PIGS?

Media fuelling India China rivalry unhealthy

Kolkata, Dec 21 (IBNS): The world would benefit from cosy ties between India and China and pitting the Asian giants against each other is detrimental to the global economy, Singapore's Foreign Minister said here on Monday. "There is no profit in the India China antagonism," minister George Yeo said at an interaction organised by the Confederation of Indian Industry (CII) and the Aspen Institute of India. He rapped the Indian media for plotting a negative image of China. "I don't think the media's view is neutral," Yeo said. He said, "China has its quirks, but so does India and so does Singapore."…. Another way to build that trust is to get to know each others countries. He said the knowledge about the other side on either side of the border between India and China was "woefully insufficient". The above was copied from washingtonbanglaradio.com. George Yeo has pointedly lashed out at the sinister motive of media and the destructive influence it has on international relations. What the Indian media is doing is similar to what the western media is doing to North Korea, by painting it as an irrational and backward country and a regime change American is good for the country and its people. It conveniently chose to remain silent on the right of interference in another country’s domestic affair while accepting the connivance and forceful invasion of countries by America as an acceptable behaviour. The latest nonsense is that the Kim Jong Un is just like a young head hunter coming of age and he needs to cut off some heads to prove his manhood. Thus he has to conduct a war with the South Koreans before he can become a man. Such silly western views reflect how stupid and low down the western journalists and so called academics are prepared to go and compromising their credentials for their own personal aggrandizement. The daily provocations by the South Koreans are there for all to see. It is a nation consumed in madness and thinks that war is a party, and Lee Myung Bak and his soldiers are all smiling. They are oblivious to the next phase of development, when many will become dead soldiers. And their families will be mourning and wailing for their return in one piece and alive. The irresponsible media continues to cheer them on to provoke a supposedly ‘evil regime’, yes, an axis of evil, and they were the innocent and good boys being threatened by the North. The media would not tell them of their stupidity and the destruction of lives and the country should war breaks out. War is good and should be encouraged.

Were we done in by the Americans

The MFA had commented that ‘One purported meeting did not even take place’ and ‘Records of what was spoken differ,’ in response to the WikiLeaks revelations. What did these comments imply? Did the Americans concocted their reports and identified Singapore as the source when nothing of the sort took place, or they twisted the words to fix Singapore? It sure looks like we have been done in by our good friends the Americans. If true, it shall warrant a formal protest to the American govt and those being offended parties be duly informed. Unfortunately, even if it is true, it only concerns two cables, one that did not take place and another being altered. Then what about the rest of the cables? They must be true. Then what? Or was it an early Christmas gift? Do we need to say thank you to the Americans or return a gift in kind? Or an apology from the White House is warranted?

Merry Christmas and a Leaky New Year to everyone

Quote from Mah Bow Tan

“While the challenges in the next phase will be different, the HDB’s core mission of building homes and bring hope of a better life for hardworking Singaporean families remained unchanged. With the continued support of other agencies, community leaders, and residents, I am confident that we can build an even better home for all – one where ‘we’ll build our dreams together. Just like we’ve done before. “ Mah Bow Tan The above quote is copied from the Today paper.

Just musing

Is it possible that a 5 rm HDB flat costs less than one year’s combined income of two young graduates? Young graduates refer to those working less than 5 years after graduation. And this could also be extended to mean any two young executives with the same income. Definitely. At one time a 5 rm flat cost only $27,500 in Holland Village. If the couple were earning $1,500 pm each, that’s $3k pm or about $40k pa inclusive of bonuses. I know some of you are shaking your heads. KNN. How could this be possible when we are supposed to better off than before? Those people then could pay off the whole $27k with less than a year’s income and with plenty to spare. And they could set aside some money as savings in their CPF or in their bank accounts. Better still, with that kind of price, today the same flat could have appreciated and may be valued at $600k! Damn nice feeling huh. Using the same magic formula, a $400k flat today could well be valued at $8m in the future, using a multiple of 22 times. But things are not that easy now. In the first place, an average young couple would have a combined income of $6k pm or an annual income of $90k. This would not even be enough to pay for half the price of a 3 rm flat. So it would be a no go to begin with. Buying a 4 rm flat will probably eat into all their CPF savings for the next 20 years, leaving very little as savings. Can things be the same again? Can they really believe that their $400k flat be worth $8m in the future? The catch is that many workers, especially the CBF workers, would not be able to see their salary go up in leaps and bounds to be able to pay for a 4 rm flat. Who can afford an $8m public flat? If a public flat is selling at $8m, then a plate of char kway teow would likely cost $100 and an average young couple should be paid like $30k pm. Maybe, just maybe, when everyone is using banana currency.

The Evil Trinity

The Evil Trinity is led by the Madman of the 21st Century. One member is the beast of the 20th Century and the other is the psychopath in South Korea. The Madman is infamous for starting wars everywhere and killing innocent people to satisfy its lust for power and control. It could do it as it could deliver the most destructive power to its victims and knowing very well that the victim could not hit back. And it will continue to attack any country on this basis until someone stands up to give it a bloody nose before it would stop. To continue what it is doing in a bigger scale it is pandering to the lust for glory of the old Japanese empire in the beast. It is encouraging the beast to take on a bigger and more belligerent role in world affairs by expanding its military capability to wage wars. And the psychopaths in South Korea were given full military support to provoke the North Koreans to start a war. The 21st Century is going to be a precarious century with the Evil Trinity out to conquer and dominate the world. The only hope to push back this evil force is an alliance between China, Russia and North Korea. A better balance would be to include India, Brazil and even the European Union. The latter is a far fetch hope as they are likely to join the Evil Trinity instead and become an Evil Gang of Four. All peace loving nations should unite against this force of evil and voice their opposition to what they are doing. They cannot allow them to go on setting the world, country by country, on fire. The rest of the world cannot continue to be divided and duped into complacency and be controlled by the neo colonialists and be victims of a new formula of oppression. Every country has to stand up to oppose this evil trend or risk losing their independence and become subservient to the Evil Empire, fronted by the Evil Trinity.

The Evil of big banks and monopoly

While the Americans have tasted their own bitter medicine of going big, big and bigger, we are still sleeping like Rip Van Winkle. Big is still good and we are going bigger by killing the smaller ones. Read the article below to see the evil of being too big and the unfair advantage it has in exploiting the small guys. SATURDAY, DECEMBER 11, 2010 The Economy Cannot Recover Until the Big Banks Are Broken Up A lot of people still haven't heard that the economy cannot recover until the big banks are broken up. In fact, virtually all independent economists and financial experts are calling for the big banks to be broken up, including: Nobel prize-winning economist, Joseph Stiglitz Nobel prize-winning economist, Ed Prescott Former chairman of the Federal Reserve, Alan Greenspan Former chairman of the Federal Reserve, Paul Volcker Former Secretary of Labor Robert Reich Dean and professor of finance and economics at Columbia Business School, and chairman of the Council of Economic Advisers under President George W. Bush, R. Glenn Hubbard Former chief IMF economist and economics professor Simon Johnson (and see this) President of the Federal Reserve Bank of Kansas City, Thomas Hoenig (and seethis) President of the Federal Reserve Bank of Dallas, Richard Fisher (and see this) President of the Federal Reserve Bank of St. Louis, Thomas Bullard Deputy Treasury Secretary, Neal S. Wolin The President of the Independent Community Bankers of America, a Washington-based trade group with about 5,000 members, Camden R. Fine The Congressional panel overseeing the bailout (and see this) The head of the FDIC, Sheila Bair The head of the Bank of England, Mervyn King The leading monetary economist and co-author with Milton Friedman of the leading treatise on the Great Depression, Anna Schwartz Economics professor and senior regulator during the S & L crisis, William K. Black Economics professor, Nouriel Roubini Economics professor, James Galbraith Economist, Marc Faber Professor of entrepreneurship and finance at the Chicago Booth School of Business, Luigi Zingales Economics professor, Thomas F. Cooley Economist Dean Baker Economist Arnold Kling Former investment banker, Philip Augar Chairman of the Commons Treasury, John McFall Leading bank analyst, Chris Whalen Why do these experts say the giant banks need to be broken up? Well, small banks have been lending much more than the big boys. The giant banks which received taxpayer bailouts have been harming the economy by slashing lending, giving higher bonuses, and operating at higher costs than banks whichdidn't get bailed out. As Fortune pointed out, the only reason that smaller banks haven't been able to expand and thrive is that the too-big-to-fails have decreased competition: Growth for the nation's smaller banks represents a reversal of trends from the last twenty years, when the biggest banks got much bigger and many of the smallest players were gobbled up or driven under... As big banks struggle to find a way forward and rising loan losses threaten to punish poorly run banks of all sizes, smaller but well capitalized institutions have a long-awaited chance to expand. Read more at: http://www.huffingtonpost.com/2009/05/11/justice-department-plans-_n_201409.html So the very size of the giants squashes competition, and prevents the small and medium size banks to start lending to Main Street again. And as I noted in December 2008, the big banks are the major reason why sovereign debt has become a crisis: The Bank for International Settlements (BIS) is often called the "central banks' central bank", as it coordinates transactions between central banks. BIS points out in a new report that the bank rescue packages have transferred significant risks onto government balance sheets, which is reflected in the corresponding widening of sovereign credit default swaps: The scope and magnitude of the bank rescue packages also meant that significant risks had been transferred onto government balance sheets. This was particularly apparent in the market for CDS referencing sovereigns involved either in large individual bank rescues or in broad-based support packages for the financial sector, including the United States. While such CDS were thinly traded prior to the announced rescue packages, spreads widened suddenly on increased demand for credit protection, while corresponding financial sector spreads tightened. In other words, by assuming huge portions of the risk from banks trading in toxic derivatives, and by spending trillions that they don't have, central banks have put their countries at risk from default. Now, Greece, Portugal, Spain and many other European countries - as well as the U.S. and Japan - are facing serious debt crises. We are no longer wealthy enough to keep bailing out the bloated banks. See this, this, this, this, this and this. Indeed, the top independent experts say that the biggest banks are insolvent. Seethis, for example. By failing to break up the giant banks, the government will have to keep taking emergency measures to try to cover up their insolvency. And by failing to break them up, the government is guaranteeing that they will take crazily risky bets again and again, and the government will wrack up more and more debt bailing them out in the future. (Anyone who thinks that Congress will use the current financial regulation - Dodd-Frank - to break up banks in the middle of an even bigger crisis is dreaming. If the giant banks aren't broken up now - when they are threatening to take down the world economy - they won't be broken up next timethey become insolvent either. And see this. In other words, there is no better time than today to break them up). Moreover, Richard Alford - former New York Fed economist, trading floor economist and strategist - recently showed that banks that get too big benefit from "information asymmetry" which disrupts the free market. Indeed, Nobel prize-winning economist Joseph Stiglitz noted in September that giants like Goldman are using their size to manipulate the market: "The main problem that Goldman raises is a question of size: 'too big to fail.' In some markets, they have a significant fraction of trades. Why is that important? They trade both on their proprietary desk and on behalf of customers. When you do that and you have a significant fraction of all trades, you have a lot of information." Further, he says, "That raises the potential of conflicts of interest, problems of front-running, using that inside information for your proprietary desk. And that's why the Volcker report came out and said that we need to restrict the kinds of activity that these large institutions have. If you're going to trade on behalf of others, if you're going to be a commercial bank, you can't engage in certain kinds of risk-taking behavior." The giants (especially Goldman Sachs) have also used high-frequency program trading which not only distorts the markets - making up more than 70% of stock trades - but which also lets the program trading giants take a sneak peak at what the real (that is, human) traders are buying and selling, and then trade on the insider information. See this, this, this, this and this. (This is frontrunning, which is illegal; but it is a lot bigger than garden variety frontrunning, because the program traders are not only trading based on inside knowledge of what their own clients are doing, they are also trading based on knowledge of what all other traders are doing). Goldman also admitted that its proprietary trading program can "manipulate the markets in unfair ways". The giant banks have also allegedly used their Counterparty Risk Management Policy Group (CRMPG) to exchange secret information and formulate coordinated mutually beneficial actions, all with the government's blessings. Again, size matters. If a bunch of small banks did this, manipulation by numerous small players would tend to cancel each other out. But with a handful of giants doing it, it can manipulate the entire economy in ways which are not good for the American citizen. Moreover, JP Morgan Chase, Bank of America, Goldman Sachs, Citigroup, and Morgan Stanley together hold 80% of the country's derivatives risk, and 96% of the exposure to credit derivatives. Experts say that derivatives will never be reined inuntil the mega-banks are broken up, and yet unregulated derivatives are one of the main risks to the economy. In addition, as everyone from Paul Krugman to Simon Johnson has noted, the banks are so big and politically powerful that they have bought the politicians and captured the regulators. So their very size is preventing the changes needed to fix the economy. PS. My apologies for not accrediting the source. It was emailed to me without the source.

High COE prices going to disrupt family life

Hooray, my old car has appreciated in value. Many old car owners are jubilant and praying that the COE prices will continue to rise, to hit the $100k mark. And in tandem the value of their old cars will rise as well. But beware, this orgasm is short lived. Just one last time. No more orgasm subsequently for many. After the old car’s life span is expired, some would not be able to cough out another $100k for a new COE and a new car. Many have the same experience in owning HDB flats. Prices going up, happy like hell. But don’t ever sell, no chance to buy back unless one still got one more chance with the HDB. What is disturbing in the two great price hikes is how they will eat up the limited disposable incomes of many families. Some families rely heavily on the car for their mobility, to bring children/seniors to schools, to care givers, to all kinds of classes and activities. Minus the car, life is going to be very disruptive and miserable. But there are convenient and easily accessible public transports available, the MRT, buses and the taxis. When time is an issue with tight schedules, shuttling between work, home, schools, tuition centres, parent’s homes etc etc, it is going to be hectic and a frustrating waiting game for taxis even if they can afford to. Our social system is getting to be less caring and less family friendly. Can families who really need the car make do without them? Is the high COE prices really unavoidable, like high HDB prices, high medical prices? Where are we going? For the sake of the poor motorists and those who really need a car, the present COE bidding system must be changed. No more stupid explanation that it is the best system. For one, no bidding by car companies. Two, the bidders shall pay the price they bid and not the lowest. This will prevent the crazily rich from bidding $100k or $200k for his COE knowing that they need not pay for what they bid. And neither can the car companies bid as high as they want while the helpless real buyers suffered in silence. Let’s hope the super talents will use their talents for the good of the motorists. But worst is to come. When more people give up car ownership, the MRT is going to be bursting in the seams. And they would be another good opportunity to hike fares to provide better services!

Lessons from WikiLeaks

When the Americans come a calling, and pretending to be seeking advice and tapping one’s wisdom, the best thing is to shut up. The second best thing is to say only good things, even about your foes. This will save a lot of embarrassment when what is said in confidence is aired in the open. Giving advice is a great honour only reserved for the wise ones. Being asked to give advice and opinion is quite flattering. But beware of the ego and don’t get carried away. What is spoken can be used to compromise one’s position and standing in the eyes of friends and foes. With hindsight, I think all diplomats would be wiser now. The Americans have blown their wicked intent for the last time and never will be given a second chance. But suckers will be born everyday and some will still think very highly of themselves and will continue to offer more advices and more opinions to the Americans. The Americans will be laughing themselves silly that these were given free of charge, and willingly. All they to do is to stroke the ego a little to get it excited.

From one scam to another scam

The New York Attorney is taking Ernst and Young to task for its role in misleading the public that led to the collapse of Lehman Brothers. The fall of Lehman Brothers resulted in a worldwide financial crisis culminating in several big banks going under as well. Many investors lost heavily from the fiasco. The first strange thing about this is that it will be a civil suit brought by the New York Attorney General against Ernst and Young for aiding Lehman to mislead investors. Why it is not a criminal suit in the first place is quite funny. Maybe it is meant to be a joke. Whatever, it is good that finally the law is catching up with the most important partner of crimes against the innocent masses at a scale that is beyond comprehension. The auditing companies have so far been left untouched in many cases of fraud or misleading the investors across the world. Somehow they are always free from prosecution. They are blameless when in reality they were the one that played a vital role in hiding all the frauds in the financial statements. More needs to be sued and put behind bars. This brings me to the second strange thing in this civil suit. The accused is the inanimate institution and not any of the senior executives. The humans who made all the decisions, committed all the frauds, were free from blame. It is the lifeless institution called Ernst and Young that was at fault. How ridiculous can it be? Sounds very familiar too, huh! So, from one big scam, the New York Attorney is going to create another bigger scam. No human bean is at fault or to be held responsible. It is very, very neat indeed. This is first class American rubbish. And the robbers are still wining and dining in their mansions and yachts around the world.

More colourful words in the media

Not many days ago Tommy Koh was said to have commmented that India was half in and half out. Quite an interesting expression that left many wondering what he meant. Today I read that India is deeper into Singapore. Hmmmm, what does that mean: ) Tomorrow the media may report that Singapore is getting wet. Too much rain in the December season I suppose. Or it may be India is pulling out!