Don't be cock, learn from the Americans

We are America's most ardent fans in everything the Americans do. We will eat shit if the Americans say it is good. We have copied and aped practically everything they do in high finance, managing the stock exchange and playing with derivatives under a policy of free wheeling and dealing with minimum supervision. Now the Americans have created this huge mess for the world. But the Americans knew that they have done wrong. They are thinking deeply on where they have gone wrong and are trying to rewind from their mistakes. They are not foolish or stubborn people who refused to admit their mistakes and will continue to do the silly things. Today I read in the paper that Geithner is seeking more curbs on derivative dealers. The days of free wheeling and dealing with minimum supervision and control are over. "'We propose to require all derivatives dealers...to be subject to substantial supervision and regulation, including conservative capital requirements, and strong business conduct standards,' Mr Geithner said, essentially acknowledging there were few limits in the past." In addition, these traders are required to keep records and reporting requirements. The objective is to prevent market manipulation, fraud and other abuses by providing full information to regulators about activity in the OTC derivatives markets. I think this is not enough, especially in a small market like SGX. Market manipulation through huge buying or short selling and programme trading, among other things, were the tools that big funds and house traders employed to exploit the weaknesses of small traders. Small investors have been incurring huge losses over the years without a clue to these unfair advantages and manipulation of big funds. It is time to continue to follow the Americans and rectify the flaws in the financial system instead of adopting the belief that no complaints means that everything is doing well. Stop the bleeding in the stock market where small investors have their pockets emptied by the big players. The new measures to be introduced by Geithner will dampen the high volatility of the stock market. But it is a necessary evil to contain the destructive manipulations and excesses of the big funds. The volatile trading activities must be curbed and some sanity return to the market. The stock market must operate and on its original premises and assumptions and sound principles, not the rules of a casino.

The unsustainable ascent of property prices

Our property prices have skyrocketed over the years and the stratospheric prices of HongKong and Tokyo are within our reach. We will outshine them in a matter of time. Then why is it unsustainable when the prospect of prices going higher is so brilliant? Let me talk about the forces that will push the prices higher and higher. Our limited land is a fact that cannot be changed. Even with reclamation, we can just do that much more. The other reason is that with prices at such a high level, with many people ploughing their life savings into properties, many with high mortgages, allowing prices to fall is going to be catastrophic. So by hook or by crook, property prices must be maintained, if not higher, but not allowed to falter and slip. The solution is simple. Manage supply and demand. Supply is easy to contained. Don't build untill there is a demand. Don't sell land unless the price is high enough for a good return. The demand side, invite more rich foreigners to buy up our properties with attractive incentives, first world infrastructure, transparency, stability, and a value that can only go up. The rich foreigners can go for the high end. The not so rich can buy up HDB properties when they become citizens or PRs. As long as the demand for properties is there, have no fear that the prices will fall. But what about demand from the locals? There will be the upgraders who need a little more to move up. But will there be demand from the new entries, the new generation coming into the market? Can their income feed the high mortgages they will be paying, a stagnating income against an ever rising property market? The divide is going to widen. Many of the locals whose income is not going up will have to downgrade or go for smaller HDB flats. On the other end, the upper and high end market, demand will keep on soaring. And it is, or will be a good thing. They will help to prop up both the private and public housing markets. In the future, Singaporeans will have to beg the foreigners, and more foreigners, to come in to buy up their properties, to keep the property prices high. Without the foreigners and their cash, our property market will crash. Yes, the foreigners will be here to help the locals by buying up their properties so that they can downgrade and live on the profits. Hopefully the profits ill last their life time before they ran out. How many times can one downgrade? Without the foreigners, our high property price is unsustainable.

Authoritarian state and practices

George Bush started by prying into the private lives of people using the excuse of security after the 911 bombing. Now prying into people's privacy is no longer the exclusive practice of authoritarian states. Britain just uncovered journalists tapping into individuals phone lines to listen to their private affairs and to obtain private and confidential information from them. How far can a state violate the privacy of the individual in a non authoritarian state? Nothing to talk about in authoritarian system as that is a way of life. What about private organisations taking the same excuse and pry into the privacy of their employees? There are many ways that this can be done. The CCTV is everywhere and can be turned into a monster in the hands of unprincipled and uncrupulous scums. On the excuse of monitoring the security of the building, they could sit down, have a cup of coffee, and review everything inside the lift, or people accessing the building, watching them in close details in the privacy of their offices. They will watch whether he/she will be adjusting their private parts inside the lifts, pasting whatever they dug out from their noses onto the lift walls or any peculiar traits. Then the tapping of phone lines can also be easily abused. There is no privacy when your phone lines are tapped and people can enjoy listening to your flirtation with whoever is on the other sides. And if the other party happens to be an unsuspecting high govt official, he would not be too happy if one day someone is going to reveal what he/she said over the phone. It is so precarious, so scary, when monsters are lurking around, wearing ties and suits like perfect gentlemen. But they think they have all the right to pry into your lives, listen to your private conversations as their god given rights. And they have no moral conscience to even realise that it is wrong, unethical to do such a thing. It is an abuse of the system and a breach of trust. The authoritarian practices are found abundantly in the democratic world as well, where little unscrupulous warlords run their little henhouses.

HDB, what are you doing?

I totally disagree with the new HDB policies on housing as formulated by Mah Bow Tan. HDB as a public housing scheme, is to provide a roof to all citizens of the country. If it wants to provide housing to PRs, that is a separate issue but should not compromise the needs of the citizens. And the policy of not providing for everyone who needs a flat is not what a govt should do to its citizens. With the clever scheme of BTO, there is this additional need to plan and apply 3 years ahead for a flat which I feel is unfriendly to the citizens who need a flat urgently for one reason or another. Not everyone has the luxury of planning 3 years ahead. A little over supply is not a waste when the interests of the citizens is concerned. HDB is not any commercial property developer. It should aim to provide a roof for all citizens when they need it at as low a price as possible without making a loss. Public housing is for that roof over the head, not for speculation. Govt policies should not encourage people to speculate on the sole property they own. Speculation can lead to big profits and also big losses. Let the rich speculate all they want in the private property market. Don't mix the sheep with the wolves.

Minibond saga - The Missing Conscience

Greed is good. But greed with no tinge of conscience is bad. And this is the message that I would like to see to come out from the minibond saga. But no, it was totally missing. The whole scam was a business and when the product was found unacceptable, it was simply removed. There was no social responsibility or accountability. No human beans involved in the whole process except the poor losers who bought the products. I think all the decisions were made by robots, machines and computers. There must be social responsibility and accountability in business. And this applies to the management of all institutions, public or private, finance or the casinos. The next problematical institutions is the stock market. Why is it that hedge funds were not operating in the casinos? They have huge resources to fall back on to their advantage. In the stock markets across the world, the hedge funds bully and exploit the small investors by their unfair advantage of huge financial resources, technology and unfair practices. No matter how big they are, inside a casino, the advantage of hedge funds and small gamblers are the same. At least the casino has the conscience to ensure a level playing field. We have seen how the minibond saga exploded, only when the pain was too big. We have yet to see or hear small investors crying foul in the stock markets across the world. Are the operating systems and procedures in the stock markets fair to small investors? Or is it a case of caveat emptor? There must be the conscience and social responsibility to protect the interest of small investors, to provide a level playing field. An organisation or country that has no conscience to protect the small people and the disadvantaged is a lost cause.