The goodness of derivatives

I have been against derivatives in the stock markets and the financial systems for its high leverage and extremely high risks. The US subprime loan crisis was a result of the same instrument being packaged as very attractive long term cheap loans but sold several times over on a single diluted asset. In an article in the ST today, it was revealed that Goldman Sach was instrumental in saving Greece from its huge debt and still able to keep on spending more. Ingenious is the word. The process is very simple, offered a loan and lengthen the repayment period for as long as possible, and make repayment looks very affordable, maybe over 30 years or 60 years or even 100 years. And the loan was not recognised or recorded as debt in the accounts books. So no debt or debt free, while actually being weighed down by a mountain of debt. Such instruments of deferred payment to the unknown future, maybe the next generation to repay, will come in very handy in any country that thrives and encourages forward spending, or taking huge loans. It is the basic principle of spending now and pay latter. And borrowers were convinced that the future is always brighter and tomorrow will be better. So go spend now, with future money. Our high mortgages in our affordable housing ballon is built under the same premises. Young people are encouraged to take huge housing loans in the millions under the belief that their future income will see them through. At 30% of two incomes repayable over 30 years, it is actually 60% in debt. As employees earning a salary, no matter how capable they are, the chances of losing their jobs or incomes is always hanging over their heads like a swinging axe. But now they should not worry if they can rely on derivatives or swap instruments for help. Financial institutions should design more of such instruments in preparation of a surge in demands in the future should the economy take a dip and unemployment rises. Under the principle of future income, looking into 50 or 60 years ahead, they can design instruments along such lines. And the borrowers can happily go ahead and spend more, and borrow more. Derivatives and swap instruments will be the saviour of the day. Greece is saved for the day. Ooops.

The exodus has begun

Over the last couple of weeks, probably 100m Chinese from the Chinese cities and overseas have made a beeline home to their little villages and towns to be with their families during the Lunar New Year. Several hundred thousands of Malaysian Chinese too will make the same pilgrimage home to be near to their loved ones, to renew that familial ties, to stay and keep in touch with papa and mama, grandpa and grandma, brothers and sisters, and all the aunties, uncles and nephews and nieces. Isn't that cool? No, it is not cool according to some of our young Singaporeans. What is cool is Christmas at Orchard Road and parties in Mohammed Sultan and Clark Quay. Chinese New Year or other religious festivities like Deepavali and Hari Raya are uncool, so commercialised. There is no party spirit to talk about, just some ancient cultural practices that are irrelevant to the sophisticated and westernised Singaporeans. The opening of Universal Studio in Singapore must have been their lives complete. Indeed cultural festivals and holidays have gone too much the way of commercialisation. The ST also helped to publish the going rate for wedding angpows and Chinese New Year angpows. It is $20 for children or $8 for friends. I have 30 nephews and nieces and grand nephews and nieces, how much would that cost me. I will need another income to fill up the red packets. What $20? I have heard of $1000 per angpow and anything less than $100 is embarrassing to pass to the young ones. Now I am feeling embarrassed as well. I believe the Singaporeans are now waiting for the govt to come out with some rules and guidelines on how much to put inside the angpows. Or maybe the Chinese Chambers of Commerce or some big and reputable Chinese Associations could help to lay down the ground rules become angpows become too commercialised that those who cannot afford to stuff in a small fortune will be too embarrassed to offer them to the young. Come to think of it, it will be better to celebrate Chinese New Year without the angpows, just party and have a good time in the clubs or at Orchard Road.

So is New York and London

We live in a multi racial and multi religious city. So is New York, London, Paris and many other big cities around the world. Why are we being hit by regular inter ethnic and cross religious intolerance and irritations? Or why are the residents here getting so intolerant and unbearable of people of different colours and beliefs? Three young men were arrested for posting insensitive racial remarks over the net and one religious leader were hauled up by the ISD to drink kopi. And we believe everything is normal though the tension is simmering beneath the surface of a false smile. We have 45 years of continuous effort in nation building to gel the people into Singaporeans, to think, act, live and behave like Singaporeans. Have we succeeded? I thought we have, or at least up to a decade or two ago. We have invested in a lot of time and effort to break down racial and religious barriers among our citizens and were quite successful until the recent influx of foreigners. The huge numbers of new residents and their unfamiliar ways of life and behaviour would definitely rub the wrong side of some citizens who are a bit more sensitive. And the new residents too would find us strange and perhaps unfriendly towards them. We want them to be like us, and accept our ways of life. They want us to be more tolerant of their ways of life and even see things the way they want it. There will be such forces pulling and pushing against each other. We even have new residents questioning why Lunar New Year or Christmas is celebrated in such big scale while other holidays were not. Soon they will want things their ways and demand more from the already accepted norms and ways of life here. The equilibrium will be changed, or will be tested and challenged. Will the natives accept such challenges meekly or will they be so pissed off with the new residents or citizens and come to a face off? We started to have this dangerous broth of multi racialism and multi religion under the British rule. They were not concerned about the consequences except their economic and political interests. And they also have the gun to deal with any dissident or trouble maker the colonial ways. Also the poor immigrants were ignorant and have little rights to talk about. They accepted their fate, live peacefully to avoid trouble and keep clear of the laws. Today we consciously decided to add more mixes in the broth. Today they talk about rights and privileges. We have new residents that are educated and know the laws and demand more rights or they will not come. They are seeing themselves as our saviours, not coolies, and will not care how the natives feel. They even feel slighted and unhappy because our walkways were not designed for their prams and convenience. And they will tell you right in the face. We will have to live with the consequences of all the new faces and residents and their demands on the meek natives. The meek shall not inherit paradise. Maybe we shall learn from New York and London on how they keep their foreigners quiet and not to cause trouble to the locals. They must know the way or else they will be plagued by all the spurious demands of the immigrants in their midst. Have we solve our foreigners versus natives problems, or they are just waiting for an opportunity to blow up? Shall we invite more foreigners to have more buzz in our lives? Don't worry, they have already brought in the buzz.

My Money My Vote

Come the next General Election the people should think carefully on what they want and who to vote to represent them. I will be voting for my money. Who ever is protecting my money will have my vote. I will not be voting for people who want my money and also my vote. The people must wake up to the fact that the money in their CPF/Medisave is their money and no one shall have designs on this money. For too long, people have been quite callous in thinking that the money is there for them to take. In the name of, for the people’s good, thinking and planning for the people’s good, they just go to Parliament and legislate away the people’s savings, to keep the people away from their savings. The next election is the time to put a stop to such haughty ideas and attitude. Let them know whose money it is. And let them know that they should piss off and stay away from the people’s money. Watch Parliament and see which MP is still entertaining such ideas. You vote for MPs to represent your interest and protect your money, not to take away your money, no matter how good is the proclaimed intention. Please do not plan the people’s lives with the people’s money. The people will be very grateful if the plans are with public money.

When Singaporeans stop complaining

No one likes to hear complaints. No one likes to be the object of complaints. In cybespace, we have complaints everywhere and on many issues by Singaporeans. Complaints against the high cost of living and high property prices are rampant. Is it good or bad? I think it is good. For when Singaporeans stop complaining, it means that they have given up, they no longer see anything here that is worthy of belonging, that they no longer belong or want to have anything to do with this place. In short, they are opting out. When Singaporeans no longer care about their country and its well being, no longer care about how it is turning into, that will be the sign that it is coming to an end. Such a state of affair was best described in the last few years of Hongkong before 1997. Everyone gave up and prepare to run with whatever they could grab. They had forsaken Hongkong and abandoning ship. Just listen to the complaints. When it is silence....