Are Singaporeans really that crazy?

We used to pay $30k for a 1,300 sq ft HDB flat. Today, people are queuing up to pay half a million or more for a 1000 sq ft little pigeon hole in the air. And everyone is so happy about it. Don't they know that it will take them a whole life to pay to be cooped up in that little space when a big sprawling house could be had in other places for much less? What is so great about a little space dressed up like a hotel room, a place to sleep, a place to pee and eat, and a TV to watch. And that is about all for $500k to a million. And the best part, everyone is expecting to make a handsome profit when they sell that little space to the next sucker. What kind of quality of living are we getting into? Work like shit for life to pay for a little place to sleep and shit and getting so excited over it? Do Singaporean ever ask whether life could be better, less stressful, less work, more leisure and fun and space to run around? Or this is what good quality living is all about?

Bravo, Great Eastern

If we want to know what is being responsible and trustworthy, look no further. The name is Great Eastern. As a follow up to the Lehman minibonds and Pinnacle notes debacle, Great Eastern has voluntary taken the step to payback every cent its clients paid for a similar product. This is quite embarrassing to the other renowned and reputable organisations that were involved in the fiasco and refused to compensate fully or compensating a pittance. The whole episode and the pathetic handling of the cases with consumers having to fight tooth and nail to claim back their losses said that there is an urgent need for a truly independent body to protect consumer interest. Unfortunately, with the overlapping of roles and interests, and personalities involved, such an organisation is practically impossible to find, not that it cannot be formed, but there is no political interest to have one. The web of being connected is amazing in this little dot. The minibond saga is like all the organisations are banded together on one side and the consumers, the little people, on one little miserable corner with a gungho maverick in the form of Tan Kin Lian as their defender. it is an ugly sight like in the Miserables.

New chief at SGX/Building castle on shifting sands

Magnus Bocker has been recruited from New York, the finest financial centre of the new world. He was the President of Nasdaq OMX. I am not going to belabour the foreign talent or lack of local talent debate. I am looking at this appointment and what direction is the SGX heading? Having a foreign head with a wealth of experience in M & A of stock exchanges, like Chip Goodyears experience in commodities, can we expect that SGX will be heading in this direction, more mergers with other exchanges? The concept is brilliant, as brilliant as the acquisition of huge international banks. The disastrous failure of the latter was due primarily to bad timing as well as buying rotten apples without knowing it. We do not know what we are in for. In the case of growing SGX into an international financial centre in the league of NY, London or Tokyo, my fear is that we are taking too big a bite that we could not swallow. The way the current stock market is running is a case in point. Without a critical mass, a big and sustainable local fund, and relying on an over representation of foreign funds, we are completely at the mercy of these funds. When they are in, we all laugh to the banks. When they decide to pull out, we will be caught high and dry. There is no escape, and many local investors, no matter how big, will be hanged by the cleaners. Their investments can be totally wiped out. This has been our experience. Are we blind to it and still think that this is the way to go? Think big but not too big. Or should we take a step back and ask ourselves whether we should know our strength and weaknesses and play at a level that we can manage and control with lesser risk? Look at our football league. This is what we are and where we will be. Don't deceive ourselves to think otherwise unless we are prepared to throw our money away. The international funds are rich and have plenty of money, but they are very mobile and not only that they will move their funds at will to where the opportunities are, they will exploit the weaknesses of the local market and investors and clean everyone out if they can. Do not play with danger that we cannot control. The minibond saga, the failed investments in foreign banks and in anything foreign, the Scam chips, Malaysian chips, are painful lessons that we must learn from. We are not smarter than them. If we go this way, the biggest disaster that will come our way will be the collapse of the stock market.

Fat bonuses even when incurring losses

The robbing of the minority shareholders continues in Wall Street. Washington Post and Associated Press reported that 9 of the biggest banks in the US paid out US$32.6b in bonuses despite the banks running into huge losses. The following are the stats: 1. BOA $4b profit $3.3b bonus 2. B of New York Mellon $1.4b profit $945m bonus 3. Citigroup $27.7b loss $5.3b bonus 4. Goldman Sachs $2.3b profit $4.8b bonus 5. JP Morgan Chase $5.6b profit $8.7b bonus 6. Merrill Lynch $27.7b loss $3.6b bonus 7.Morgan Stanley $1.7b profit $4.5b bonus 8. State Street $1.8b profit $470m bonus 9. Wells Fargo $42.9b loss $977.5m bonus The above stats show how sick the is the world of top paying employees. Regardless of how they performed, regardless of whether the company is making of losing money, they pay themselves first. This state of affair is made possible when the minority shareholders lost control of the organisation. And the top management is practically at will to rob them of whatever they want. There is no law against this kind of daylight robbery. And the money robbed or paid to the top management is legal, above board, transparent, cannot be challenged in court, as they are duly approved by the board or within the organisation's approving procedures. This is stealing legally. No corruption. And the top management will strut around with heads held high, no need to feel any sense of guilt or shame. It is the fault of the minority shareholders for surrendering their rights to their money. Raiding corporate treasury is now a legal and acceptable practice in most western model organisations. I quote this from the report, 'When the banks did well, their employees were paid well,...when the banks did poorly, their employees were paid well. And when the banks did very poorly, they were bailed out by taxpayers and their employees were still paid well.' Very familiar story. The question is, shall we learn from the Americans and continue to pay top management this way? Or shall we learn from the Americans who are trying to table a bill to put a stop to this daylight robbery?

The fallacious compensation formula for top management

Goldman Sach is going to reward its top management with bountiful bonuses again as its profit soars. Technically it appears a reasonable thing to do given that the top management were the people that helped to generate the profit and should be duly rewarded. But, but the formula is loaded on one side. Big profit means big bonuses. No profit no bonus and big losses, it is the organisation that pays, or the shareholders that pay. Nothing to do with the top management. They only miss out on the big payout. Look at yesterday when all the big organisations were bleeding in the billions. Would the top management put back those billions that were lost? What if the last losses were $200b, as an example, and they started to make back $20b this year, big bonuses again? By right, they should work for the organisation for free or at a fixed pay until all the losses were recovered. Would that be fairer to the organisation and the shareholders? For such organisations that have suffered huge losses, the compensation formula should and must take that into consideration. That was why older compensation schemes were not foolish enough to pay everything with the sky's the limit computed on a spot year. You can't do that! The American govt should pass a law to make those top management to work for life, without bonuses or pay increases, until the losses are made good. Then only can they talk about more bonuses.