12/26/2008
Singaporeans could be a happier lot
Yes, with so much wealth, a disneyland like environment, Singaporeans could all be much happier, more contented if there are less criticism and cynicism of the ways things are. If only Singaporeans just count on their blessings and be happy with what they are and do what they are supposed to do, this will be the dreamland of happy people.
The people who are supposed to sweep the floor or wipe the tables, be happy doing it. The workers work and do their best, the food courts serve their best dishes, the businesses do their roaring businesses and the let the politicians run the country as they are supposed to. How nice things can be.
The fault lies with all the critics and cynics. They should stop all the gripes and kpkb. Let all and one perform their fated roles in life and all will be fine. There is really no big problems here. Everyone has a job, a roof over their head, clothing and enough food to eat. It is a real paradise.
Just look at the beautiful parts of everything around us. The future can only be more beautiful.
Incest in Wall Street
Was Wall Street a victim of incestuous relationship? All the evidences pointed towards that direction. The regulators not doing their job to regulate, the auditors slept on their job or not doing their due diligence and got away with murder, and the con men allowed to con their way through, duping all the Americans, including foreigners, rich and poor.
And they did what they did for years. In the meantime everyone was celebrating the greatness and genius of these supertalents. This is the other part, other than incestuous relationship, the state of delusion. The madness of idolizing the big earners who were cheating all the way by paying themselves crazy was seen as good, all worthy of their huge pay packets and demanding more everyday to justify their worth.
The combination of incestuous relationship and delusion is a potent concoction. The former prevented the checks to be conducted expeditiously by the people tasked with the jobs, the watchdogs afraid to bark for fear of being muffed, and the law enforcers turned a blind eye thinking that supertalents cannot be wrong. And every year end would be time for their big bonus handouts, everyone laughing all the way to the banks.
And despite the fraud being exposed, they are still laughing all the way to the banks. The delusion is still unshaken. The same formula of success is still intact. The supertalents will still be paid their supertalent salaries and bonuses.
And in the New Paper SEC's CEO Christopher Cox regretted for banning the short selling of financial stocks which he might think would have saved the market from falling. His position, a very familiar one, was to do nothing. "What we have done in this current turmoil is stay calm, which has been our greatest contribution - not being impulsive, not changing the rules willy nilly, but going through a very professional and orderly process that takes into account unintended consequences and gives ample notice to market participants."
This kind of non action is only good when the system is sound and not flawed. When it is flawed, when there is non regulation or closed one eye regulation, when there are frauds, it is the surest and shortest cut to destruction. And exactly because of his non action that Madoff could pull off his con job for so long. The kind of mess that minibond would have caused, and more serious if not abruptly exposed, to our investors. It will happen to our stock market and financial system too if we do not repair the damage to the system and pretend that everything is fine and do just nothing, like Cock. Oops I mean Cox.
12/25/2008
The ridiculous nature of cyberspace
It is so ridiculous that cyberspace has now been use to its best to ridicule officialdom. Any dignitary, thoroughbred, infallible or otherwise supreme talent that once was sharing sermons of wisdom is now the convenient target of ridicules if he/she reveals his/her true self too often.
The weapon of ridicule is perhaps the most power weapon available at this point in time to netizens. I think netizens know that there is nothing that they can do to engage in a real discussion with officialdom. They know that they will be ignored for good reasons. So, at best, they will make a silly statement looks even more silly than it really was.
But would it matter? I think no. Officialdom lives in another world and there is no engagement. The hardcore netizens swear that they will not read the old media or main stream media. Likewise officialdom will not waste time in cyberspace to read the ridiculous postings. Officialdom will simply say what they want to say in the old media and that's it. It is official.
When shall the Twains meet? Or will ever the Twains shall meet? Actually I got this feeling that they met but pretended not to meet. And cyberspace will remain as ridiculous as it can get while the old media will remain as official as it can get.
Investing $billions or $millions
The key questions in everyone's mind today is risk in investment. How much risk to take and capital protection. Would the investment lead to a total wipe out of the capital put in. In the minibond case, many were looking at long term bond or fixed deposit equivalent that have very little risk of losing their capital. They are looking for a little better than the pathetic interest rates for fixed deposits with minimal risk or no risk at all.
Then in the case of Madoff's ponzi scheme, many of the investors went in for a consistent and respectable return for their money on the track records of Madoff's company and Madoff's reputation. A lot of assumptions were taken for granted eg SEC regulations, audit checks were expected to be in order and no fraud was expected. There were risks but none of the investors would have considered them or have sleepless night over them. They could lose some money if the investment climate changed but neither would they ever thought of losing it all. Then again investing in an institution like Madoff's and in a normal situation would be like walking into a bank to buy unit trust, a long term investment that could not go too much wrong.
When a financial crisis is brewing, when a major financial institution is in financial trouble, or any big corporations in need of fund to survive, the need for due diligence is much heightened. Putting money into a crisis organisation is like putting in good money after bad money. How bad is the situation and how high is the risk must be the major considerations before committing millions or billions into it. And when millions and billions are concerned, capital protection must be vital. This is not placing bets in a casino where one is prepared to lose the whole bet. This is investment, investing huge sums of money with calculated risks and knowing how much to lose.
Going into such high risk investments in a risky situation is different from investing in a Madoff fund or even a minibond equivalent. Here the risk is very high and very real, an organisation about to turn turtle. People cannot go into such critical investments using huge sums of money without protecting their investments and risk losing everything.
We have pumped billions of public money into distressed banks and financial institutions recently. Were the risks carefully evaluated and the capital protected by some conditions or agreements without having to lose all or a major part of it? Or were the people deciding on these investments prepared to lose everything without protecting the capital?
We are losing a lot of money, public money, and some bets could end up losing everything. High risk high return is as good as gambling in the casino. Investing is not about losing but managing loss and maximising returns. If losing everything is not a factor in the decision making, then it is a highly dangerous adventure.
Maybe the risk of losing is computed from the total sum of funds under management. If one is managing $100 billion, taking a calculated risk to lose $10 billion in a single investment is risking 10% of the whole and acceptable. This may be what some fund managers would think. But think again. If the funds are public money, and the 10% is in the billions, it is not a peanut monopoly game. It is risking real money, substantial amount of money.
I believe all the supertalents who are paid supertalent salaries must have weighed all these factors carefully before they made the decisions. They are paid good money and are expected to do their due diligence.
12/24/2008
Redbean suspended from TOC!!!
I just try to visit TOC and this message greeted me. This account has been suspended.
My goodness! What have I done to be suspended from TOC? I hope this is a technical error. My mind is running wild with all kinds of possibilities.
TOC may want to explain to me quickly.
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