Whither the Stock market?

What would happen if there is no retail traders left in the market, of if the number is too small to be meaningful? The last few weeks told a story of a stock market that is verging on the edge of being barren, when retail or genuine investors have abandoned the market for their own safety. At 1 billion shares transacted daily, there was hardly any phone ringing in the trading floor of broking houses. Compare this to the heydays of the 1990s when a billion shares were traded, the phones of all the remisiers would not stop ringing for the whole day. In fact many had problems picking up their phones as two or three phones would be ringing at the same time. The tradings then were genuine, by traders and retail investors. Today, despite the hue and cry of 1 billion or 2 billion shares traded at times, remisiers are biting their finger nails wondering why there is no phone call from their clients. In a way the volume is generated by artificial trades, programme tradings, churnings by funds, high speed tradings, all generating no commissions, as they were either house trades or funds’ own tradings. And the funds are demanding that the system be made more friendly for them to trade, even making it cheaper, or to trade for free. The stock market has been transformed to the likes and dictates of the big funds to facilitate their tradings. What the regulators have forgotten is that the funds are not here to do charity. They are in the market for profit. And, unfortunately, stock market trading is a zero sum game. When the funds are making profits, someone else is losing his pants. We have reached a state when most of the big retail traders and investors have lost practically everything and are no longer in the market. Only a few small traders who have not lost their savings yet, and a few remisiers who still have some money left to lose, are left in the market. As days pass, this number is going to dwindle to non existence, if the system continues in this mode. The question is whether the broking houses can survive without the income from commissions generated by the retail investors or high net worth clients? The exchange can still laugh all the way to the banks with the clearing fees from the high volume. But the high volume means nothing to broking houses that have to feed all its staff, rentals, overheads etc etc. When retail trading reaches a point that is no longer able to sustain the business, the broking houses will have to pack their bags or downsize. But even before that, the funds that the exchange is begging to trade in the market will be the first to disappear from the scene. When there is no money to be made, there is no reason to be here even if they can trade for free. Who is left to feed the big funds? Can the stock market continue to exist without the participation of genuine investors? Can the current mode of operation that favours the big funds sustain the business of the stock exchange? As Merlin continues to wave his magic wand, the stock market is turning into a toad instead of a prince. And no one knows what is wrong with the market. They think that they can keep waving the magic wand and something good will come out from it when fundamentally the market is rotting at the core.

A church besieged

George Yeo figuratively described the PAP as a broad church. Now you can understand why the ‘pastor’ called on the sinners to repent, and why the believers shouted, ‘In George we trust!’. This new religion can be appropriately called Papism, or shall it be called Papianity? It is a big church in all counts, and very powerful with hundreds of thousands of staunch believers. It can and has blessed many people to richness and a good life. It serves the people and works for the good of the people. It has its own belief system and commandments of course. It also has a jealous god. It does not take it kindly on believers of other gods. It cannot tolerate the existence of other gods. And of course it is a white god and all its angels are in white. Not forgetting the church elders elevating themselves to higher mortals. In its early days there were persecutions of the non believers. Some were imprisoned, some burnt at the stake, some fled. It was fortunate that the persecution did not reach the level of the Inquisition. Lately the Holy Order has taken some knocks. The quest for material well being instead of spiritual well being has unsettled many believers. The absolute power of the Holy See is also being questioned. The mantra that ‘We are gods’ is starting to be ridiculed. Even ministers are questioning the wisdom of the core beliefs. There are signs that some reformists are attempting to break away from the church. There is a high possibility that a protestant movement may surface and a breakaway church of Singapore be founded to rival the old church. The making of a new church is eminent. Some ministers have openly criticized the old church and have left. Many believers are troubled with their belief and may just join the new church. They would want a new beginning and not more of the same. The old church has simply grown too big, a mega church, too rich, too many members who are not really believers but eat religion to get fed and wealthy. Verily I said unto you. Whoever believes in me shall have everlasting life. Seek ye first the truth, and the truth shall set you free. Amen. PS. I am posting this for fun reading, political humour. Please don’t call me a mobster.

I Turkey, I Duck

A turkey and duck standing side by side with the turkey in the far side. Another interpretation is that the duck is the turkey and the turkey behind is saying I duck. More pics in Art of RAR Gallery in top right link.

I was called a mobster in Temasek Review

Not by TR of course. TR reposted my article ‘The daft Singaporeans voted’ and it drew more than 110 responses and growing. One blogger by the nick of CPCM called me a mobster because he said I called the Singaporeans daft. Would he also label everyone who called Singaporeans daft as mobsters too? In his haste and anger, he forgot how the label ‘daft Singaporeans’ came about. If he bothers to read my article in full, he would have realised that I did not really called the Singaporeans daft, but responsible and thinking people, who voted using their heads. People who used their heads, thinking and rational cannot be daft, or could they? I quote from my article ‘The pattern and consistency in the way the daft Singaporeans voted are pretty predictable by now. They have seen what PAP could do and are enjoying the success and would only vote for good candidates if they are available. They are responsible and voted with their heads.’ The use of the word daft in the my article is in a cynical manner. Now who is daft, who is or are the mobsters: )

A joint statement to quit the cabinet

MM and SM are thinking more alike, it seems. Both decided to quit the cabinet to let a younger team of ministers led by a nearly 60 year old PM to start with a clean slate. Relatively, a young team was when LKY became a PM at 35, I think. Now that was a young team. At 60, many were grandfathers and have long forgotten about pacifiers and could hardly be considered young anymore. It’s better late than never. My original take was that both LKY and Chok Tong would not even contest the GE. I think LKY wanted to do that long ago, but for obvious reason, unable to let him go solo. Just before the GE, Hsien Loong was quoted to have said that both LKY and Chok Tong would be his advisers, a role that could make his job much easier, but also made him a PM under watch, with two yodas breathing down his neck. With Chok Tong still wanting to stay in politics, LKY too had to be around. It is either both quit or both stay. Chok Tong has proven to be quite a persistent stayer so far. And for him to quit the cabinet is the best that could be gotten. Now LKY can be more at ease as both are now MPs and should not be in the thick of decision making. The next move would likely be another joint statement that both would step down as MP. As precedence had been set, there would not be a need for a by election, and the govt will still be an absolute majority in Parliament, without rocking the boat. Only then would everyone be at ease, that a new era has dawn and the PAP’s internal struggle for power has a clear winner.