A futuristic Stock Exchange

Looking at my crystal ball and from the inputs of what are being implemented in the western model of stock exchanges, I have this vision of what the future stock exchange will be like. As desired, it will be a state of the art computerised system with minimal human beans involved, and superbly efficient.

In short, traders and remisiers can be excused from the system. They will not be able to compete with the machine. What will evolve will be high speed trading by computers and machine. Every big fund will roll out its state of the art computer system to trade for them, programmed by the best programmers applying the most complex algo logic to profit from every trade. To make a winning trade, they only have to beat the rest of the competitors by a micro sec faster or by a bid of 0.1c. That is all it takes. It is not about investing but a battle of machine. No need to bother about fundamentals or real values of the stocks. And all these will be done at extremely high speed by the supercomputers.

The game will be so sophisticated and super fast that no retail investors/traders will be able to play, or to think of making a profit. They will all pack up and call it a day. Trading houses too will not be in business when there are no investors/traders to pay them the commission to cover the operating cost.

Companies and business organisations too will find listing meaningless as the stock prices will hardly move, controlled by machine to minimise risk and making brisk profits in micro seconds and with marginal changes in prices. With the high cost of listing and listing fees, and unable to raise funds in a virtually lifeless market, many will delist from the stock markets.

Then what will the machines be trading? Derivatives, ETFs, CFD, ADRs, covered warrants, or any kind of papers that the funds could generate for the market. There will be virtual stocks created just for trading, with no need for a company and a profit generating business. A typical trading pattern for a penny stock like R2D2 will be: Buy 200m at 1c and Sell 200m at 1.1c. Or the higher value stock like C3PO Bank: Buy 20m at 8.00 and Sell 20m at 8.01.

And the industry will be so efficient that the management of a stock market would need not more than 20 staff. And the fund managers too will be operating with a handful of staff manning computers and machines. The whole industry could comprise of less than 100 expert financial professionals.

The broking houses will be a thing of the past, so are remisiers and traders and real stocks. It will be a real virtual world of stock trading, with stocks from non existent companies and machine trading for non existent traders and investors.

And the stock exchanges can churn in several trillions of trades daily from the handful of big operators and their machines. The stock market and exchanges of today will only be remembered and taught in schools as part of the syllabus in the subject called History.

The $24m race is on

If not for the silly exclusion clause that disqualified the majority of the population, I will also throw in my hat for the race. This clause must be deleted in time to come as it is the most discriminating clause against all citizens in the name of justice and equality. Reminds me of the Animal Farm where some are more equal than others. Who is to say who is more equal and has more right to be qualified as candidate for the Presidency except the people?

For the time being, only a select group of people who are rich and powerful are eligible to contest for this position. If not I would like to suggest that the Presidency be rotated on a monthly basis with each candidate selected from a pool of qualified senior citizens, excluding the unreasonable clause of being in high offices and running an organization of $100m. This will provide 12 high paying jobs of $400k per monthly term a year, or 72 happy presidents every 6 years.

The daft citizens will have to contend with the few candidates available today. Just be wise in casting the vote. Like Lim Boon Heng said, some are too close to political parties and may not be suitable. I fully agree with this kind of concern. The people must be guarded against incestuous relationship, and the elected President must be one that is not related to any political party.

Let’s hope there will be enough of neutral and decently qualified candidate to choose from. For those who are eligible under the present restrictive clause, they must know that there are very few around, they must stand up to contest as a service to the people and country. The people are hungry for an alternative choice.

Bikers

Two bikers riding side by side, a guy and his girl. More pics in Art of RAR Gallery on top right.

I did not ask for it

Hypothetically, or just my imagination, when the huge increments and pay were thrown at the lap of the President, could his eyes pop out and follow by a grumble, ‘Why so much? I didn’t ask for it.’ Nathan is a simple man, nothing ostentatious in his lifestyle, and probably very happy with his banana leaf fish head curry. He has never been seen as someone who would flaunt his wealth, spending wildly. Neither is his wife. Both very decent people living quite a simple lifestyle.

The millions of dollars thrown at him would probably go into his bank accounts and never see daylight. I am being presumptious of course. My point is that we are paying too much for a non executive president. We are not living in a kingdom where blue blooded aliens must be kept to live very well from the taxes paid by the people.

Also, whoever is elected to this high office, he is likely to be a man that is held in high esteem by the people, and unlikely to be corrupted. So no need to pay him an out of this world salary to keep his fingers away from the coffer. Anyway, his position is unlikely to get him too close to where the money is kept. The idea of paying an officer a lot of money to keep him from becoming corrupt is demeaning to such an office. For all its honour and dignity, this concept must be taken out of the equation when the good office of the Presidency is concerned.

Paying people to prevent them from corruption should be kept at those levels where people are likely to do so. I still got this funny feeling that the whole reasoning is foul, at least I can smell that something is not right.

I hope the Salary Review Committee will take the Presidency out of the package and deal with it separately, away from the stigma and idea of corruption. The thought of a president that is incorruptible may be a bit idealistic. But the safeguard is the office of CPIB, watching everyone to keep them honest.

A decade of failed public housing policies

With only a couple of weeks in office, Koh Boon Wan has virtually overturned many of the old housing policies of his predecessor and frantically trying to make up for lost time to make good what had went wrong drastically. Would the changes in housing policies be good enough evidence of the mismanagement of public housing or just a change of policies and nothing more? The decade of under building of public flats and the influx of foreigners have caught many first time buyers of HDB flats sleeping. Many did not really understand what was happening and were caught napping through no fault of theirs. As a consequence, many ended up buying excessively priced flats or missed the boat altogether. Many too have to put off plans for marriage, for starting a family, while some were forced to buy resale flats at higher prices or private properties at even higher prices. The net result is that many young people have to pay overpriced properties and cleaning up their savings. Those that missed the boat are just as bad as the little savings they stinged to save can never make up for the runaway prices. Could the victims of the decade of misguided public housing policies find recourse or reprieve in some way with new policies that will recognize their plight? Many have been forced out of the market for not being able to buy a HDB flat when their incomes were within the HDB ceiling. Is it their fault? Would there be an amnesty of sort to let these victims of past policies back into the public housing system? Or would it be a case of just too bad, caught by wrong policies at the wrong time? Or would some wise guy quip, ‘It happened, let’s move on? How flexible and people centric will the new regime be to the victims of flawed policies?