Fund managers with a lot of cash are eager to make a killing to show off their talents, plus earning big bonuses. The fact that they are paid a huge salary also makes doing nothing unacceptable. They must show that they can make a difference to justify their indecent pays. Sometimes, some investment professionals ran out of ideas and would even forget the mistakes of yesteryears. To want to prove their worth, cautions are thrown to the winds. Take risk, go for quick results, quick fixes, no matter how silly and hazardous the investment is, never mind, just hope for the best. After all, it is other people’s money. At worst, quit, take the severance bonuses and go for a rich and bountiful retirement. And if lucky, people will say how smart he is, money well spent, every cent of it.
If fund managers or finance professionals are not in a rush, there are many lessons that they could learn from, and avoid repeating disasters. Many who came before them have laid the walkways with their fiascos to warn the eager beavers not to do the same. Briefly, one of the things that one must not invest in is kindergartens. Never put big money in childish stuff. Big money must be invested in real solid businesses. Investing in brick and mortar is quite sound. Investing in blue chip banks too is a foolproof investment strategy. But never invest in companies that are losing money, including banks, no matter how great their reputations are or were.
Some fund managers are crazy about the Manchester United IPO. It looks like some jokers never learn anything at all, even mammoth failures that are too recent to be forgotten. In the first place, football clubs are nothing but another gambling outfit in a different name. If that is not bad enough, football clubs that are in debt of a few hundred millions must have raised a red flag. Those who are clamouring to invest in such clubs must either be genius or mad, like those who bought into Citibank and all the European banks. No fools would want to put their money in a gambling outfit that is losing money.
If anyone thinks that gambling is a good investment portfolio to have, there are plenty of casinos that are making millions annually, and even closing both eyes, putting money in money making casinos will be a million times saner than to put money in a football club deeply in debt.
And there are two casinos that are making great money at the doorstep. Why not put money into them if kindergarten is bad, if banks that are losing money are also bad? Why so adamant about a football club that is in debt of a few hundred millions? Why put money in a business that one has no clue about and has absolutely no control whatsoever? Why not MBS or Genting, when their businesses are more transparent and under close supervision and regulatory control?
It beats me. Maybe because Peter Lim attempted to buy a football club, and he being the man with the Midas touch, following him cannot be wrong. I will never ask any client to put money in a losing concern, and not a losing concern that is a football club. How could a losing money football club be a good bet when a losing money and reputable bank is high risk?
Are Singaporeans being made to bail out Manchester United? How and when will the club be able to earn that kind of money to pay back to the investors? If the club is capable of mismanaging to such a debt, could it do better? Who is responsible to ensure that Singapore investors are not pushed into another shit hole.
Unbelieveable! Who says it is difficult to find nitwits?
9/18/2011
Rogue trader lost $2.48 billion
I thought Nick Leeson would be the last rogue trader and all big institutions would have learnt that lesson and all kinds of controls would have been put in place. We are seeing more rogue traders appearing as if no one knows how to prevent such excesses.
This guy in UBS could have walked away smiling if he had done them openly and pass the loss to the bank. Many big institutions have lost billions or hundreds of billions without losing any sleep or anyone being made accountable. It is a game that more than meets the eyes.
In this modern world of high finance, deregulation and minority shareholders all sleeping or unable to do anything, it is so easy to rob a bank or sell off a bank with a ‘rogue’ trader. Some silly big investors even willing to put money in institutions without have any management rights or representation, so trusting, innocent and naïve, believing that the management are all honourable people that will not rob the institutions to line their own pockets.
I got this strange feeling that we are reading Alice in Wonderland, where little innocent children were running around with bags of cash and passing them around like a game of monopoly. But then again I am just too unsophisticated and untrusting of strangers and always think that I can be cheated by decent and respectable men in ties and suits and a string of degrees from the Ivy League universities.
Of course I am wrong. The world is full of honest people. And they get more honest in high places when they are paid their rightful dues. All those rogue traders simply happened by a slip of management supervision. That’s all.
This guy in UBS could have walked away smiling if he had done them openly and pass the loss to the bank. Many big institutions have lost billions or hundreds of billions without losing any sleep or anyone being made accountable. It is a game that more than meets the eyes.
In this modern world of high finance, deregulation and minority shareholders all sleeping or unable to do anything, it is so easy to rob a bank or sell off a bank with a ‘rogue’ trader. Some silly big investors even willing to put money in institutions without have any management rights or representation, so trusting, innocent and naïve, believing that the management are all honourable people that will not rob the institutions to line their own pockets.
I got this strange feeling that we are reading Alice in Wonderland, where little innocent children were running around with bags of cash and passing them around like a game of monopoly. But then again I am just too unsophisticated and untrusting of strangers and always think that I can be cheated by decent and respectable men in ties and suits and a string of degrees from the Ivy League universities.
Of course I am wrong. The world is full of honest people. And they get more honest in high places when they are paid their rightful dues. All those rogue traders simply happened by a slip of management supervision. That’s all.
9/17/2011
Referendum to sell Singapore
At the rate it is going, in 30 or 50 years time, the original Singaporeans will be a minority in the city state. Either they failed to reproduce or they migrated. We used to be 2m. Now we are nearly 4m with new citizens taking up almost 50% of the population. The number of new citizens will only go up with our addiction for more head counts.
What this means is that whatever the 2m original citizens inherited and owned of this island, they now own half, including half of the reserves. The new citizens are taking half of the original Singaporeans’ share of the country’s wealth, and half of the reserves too.
If the foreigners are allowed to keep pouring into the country, say they formed 80% of the population, it will mean that the original Singaporeans will be left with 20% share of the nation’s wealth. And this does not take into account the land and properties that were sold to the rich foreigners.
The bottom line is that Singaporeans will eventually own less of this island. Yes the foreigners will also be citizens and have the right to a share of the island. This is not unlike a family inheritance. All the children will have an equal share of the family wealth. Then the god sons and god daughters, the adopted children, the children of mistresses, all came and taking an equal share of the wealth. Would that be a desirable and acceptable outcome?
While there is still time, and the wealth and assets are still there, and since they will be distributed to new citizens eventually, with the main beneficiary being the eldest son profiting in the process, would it be better to divide the family wealth equally before it is gone?
When no one cares about ownership or inheritance, when the prodigal sons are selling everything they could sell for their own benefits, for their own good, the rest of the children better insist on a splitting up of the family inheritance fast.
If, hypothetically, the whole island can be sold off as a going concern, like a business, and every citizen gets an equal share of the sales proceed, with new citizens getting a pro rated smaller share, it could be a nice way out. Assuming each citizen can have a share of $3m, at 3m population, the going price is $9 trillion only. Make it $10 trillion with the extra $1 trillion to be share by the new citizens, with a formula for sharing based on their tenure as a citizen. This should make everyone happy. (The actual sales price can be worked out after a full valuation of what the islands and all the assets are worth. It may not take 50 man years to do that.) The final price could be double if there are competitive bids to buy this enterprise by the superpowers.
There are many advantages to such a proposition. Firstly, the country is looking more like a hotel anyway and citizenship or no citizenship is not going to mean anything any more. In fact citizenship is too burdensome, and full of responsibilities and unfairness. Secondly, Singaporeans are calling themselves international citizens and wanted to be international citizens anyway. Thirdly, the world is opening its arms to welcome rich migrants. With the windfall, a family of 4 could be richer by $12m, plus whatever they owned, and they can go anywhere and be welcomed as rich expats. Is that not what everybody wants, money and a good life, instant gratification? Or they can still choose to stay put, as residents here, without being a citizen and with no NS obligation to irritate them. Nice right?
The new owner can run this enterprise whichever way they pleased. They can retain the services of all the civil servants and GLC employees, including the cabinet, to run it as before. Or they can change whoever they want. They can bring in all the talented foreigners, rich, skilled, or whatever, increase the population to any number, let the prices of properties ballooned, and there will be no citizens to feel aggrieved. It is a private enterprise, a hotel, a real business concern.
In the meantime, the rich Singaporeans, with loads of money in their bank accounts, can choose to go anywhere and live happily ever after with their shares of the inheritance.
How about it, a referendum to sell off the country, lock, stock and barrel, for money? No more emotional attachments and kpkb about foreigners, about govt, about prices, about politics, just become rich and happy, as citizens of the world. What option is there anyway? The country is being given away on a silver platter to all the new citizens and is trumpeted as the next good thing to happen. As sure as the sun will rise! It will be gone.
Of course this sounds fictional. But with the entrepreneurial spirit of Uniquely Singapore, could there be a possibility that it could happen?
What this means is that whatever the 2m original citizens inherited and owned of this island, they now own half, including half of the reserves. The new citizens are taking half of the original Singaporeans’ share of the country’s wealth, and half of the reserves too.
If the foreigners are allowed to keep pouring into the country, say they formed 80% of the population, it will mean that the original Singaporeans will be left with 20% share of the nation’s wealth. And this does not take into account the land and properties that were sold to the rich foreigners.
The bottom line is that Singaporeans will eventually own less of this island. Yes the foreigners will also be citizens and have the right to a share of the island. This is not unlike a family inheritance. All the children will have an equal share of the family wealth. Then the god sons and god daughters, the adopted children, the children of mistresses, all came and taking an equal share of the wealth. Would that be a desirable and acceptable outcome?
While there is still time, and the wealth and assets are still there, and since they will be distributed to new citizens eventually, with the main beneficiary being the eldest son profiting in the process, would it be better to divide the family wealth equally before it is gone?
When no one cares about ownership or inheritance, when the prodigal sons are selling everything they could sell for their own benefits, for their own good, the rest of the children better insist on a splitting up of the family inheritance fast.
If, hypothetically, the whole island can be sold off as a going concern, like a business, and every citizen gets an equal share of the sales proceed, with new citizens getting a pro rated smaller share, it could be a nice way out. Assuming each citizen can have a share of $3m, at 3m population, the going price is $9 trillion only. Make it $10 trillion with the extra $1 trillion to be share by the new citizens, with a formula for sharing based on their tenure as a citizen. This should make everyone happy. (The actual sales price can be worked out after a full valuation of what the islands and all the assets are worth. It may not take 50 man years to do that.) The final price could be double if there are competitive bids to buy this enterprise by the superpowers.
There are many advantages to such a proposition. Firstly, the country is looking more like a hotel anyway and citizenship or no citizenship is not going to mean anything any more. In fact citizenship is too burdensome, and full of responsibilities and unfairness. Secondly, Singaporeans are calling themselves international citizens and wanted to be international citizens anyway. Thirdly, the world is opening its arms to welcome rich migrants. With the windfall, a family of 4 could be richer by $12m, plus whatever they owned, and they can go anywhere and be welcomed as rich expats. Is that not what everybody wants, money and a good life, instant gratification? Or they can still choose to stay put, as residents here, without being a citizen and with no NS obligation to irritate them. Nice right?
The new owner can run this enterprise whichever way they pleased. They can retain the services of all the civil servants and GLC employees, including the cabinet, to run it as before. Or they can change whoever they want. They can bring in all the talented foreigners, rich, skilled, or whatever, increase the population to any number, let the prices of properties ballooned, and there will be no citizens to feel aggrieved. It is a private enterprise, a hotel, a real business concern.
In the meantime, the rich Singaporeans, with loads of money in their bank accounts, can choose to go anywhere and live happily ever after with their shares of the inheritance.
How about it, a referendum to sell off the country, lock, stock and barrel, for money? No more emotional attachments and kpkb about foreigners, about govt, about prices, about politics, just become rich and happy, as citizens of the world. What option is there anyway? The country is being given away on a silver platter to all the new citizens and is trumpeted as the next good thing to happen. As sure as the sun will rise! It will be gone.
Of course this sounds fictional. But with the entrepreneurial spirit of Uniquely Singapore, could there be a possibility that it could happen?
9/16/2011
A revolution in Malaysia
First he took a major step to sweep aside all the historical baggage and irrational emotional misgivings to sign a deal with Singapore to exchange the railway land with comparable parcels of land. This brought a lot of ire from the old guards who criticized him for being a softie.
Then he talked about treating all the racial groups more equally to the displeasure of his UMNO radicals. Some even accusing him of selling out the interests of the Malays.
His minister also made an affront to conventional wisdom by wanting to limit the sales of properties to stop speculations and a spiraling of property prices.
Now he did the unthinkable, by abolishing the controversial Internal Security Acts that had outlived its usefulness and being abused by politicians to threaten, harrass and arrest political enemies.
The Malaysian PM Najib Razak is turning himself into a revolutionary of a kind that is beyond imagination. Who would ever imagine this aristocratic son of a conservative and ultra Malaysia Prime Minister taking such bold steps to change the ethos of the political culture of his country.
The changes that have started to roll under Najib will have wide ranging ramifications to the modernization of Malaysia and pull Malaysia from the doldrums of selfish and parochial politicking that is getting the country no where.
Malaysia is undergoing a revolution under Najib Razak. Would he go one step further by returning the banks and conglomerates they seized from the Malaysian Chinese and let the original owners run them back to health? Or would he be happy to let the bumiputras run them to the ground? The Malaysian economy has been stagnated for the last few decades when it could have flown off to the sky. The remaking of Malaysia cannot be done alone by the bumiputras and the bumiputra policies. Malaysia needs real businessmen and entrepreneurs to attain 2 digit GDP growth and to compete in the international markets.
The political revolution must follow with economic and social revolution.
Then he talked about treating all the racial groups more equally to the displeasure of his UMNO radicals. Some even accusing him of selling out the interests of the Malays.
His minister also made an affront to conventional wisdom by wanting to limit the sales of properties to stop speculations and a spiraling of property prices.
Now he did the unthinkable, by abolishing the controversial Internal Security Acts that had outlived its usefulness and being abused by politicians to threaten, harrass and arrest political enemies.
The Malaysian PM Najib Razak is turning himself into a revolutionary of a kind that is beyond imagination. Who would ever imagine this aristocratic son of a conservative and ultra Malaysia Prime Minister taking such bold steps to change the ethos of the political culture of his country.
The changes that have started to roll under Najib will have wide ranging ramifications to the modernization of Malaysia and pull Malaysia from the doldrums of selfish and parochial politicking that is getting the country no where.
Malaysia is undergoing a revolution under Najib Razak. Would he go one step further by returning the banks and conglomerates they seized from the Malaysian Chinese and let the original owners run them back to health? Or would he be happy to let the bumiputras run them to the ground? The Malaysian economy has been stagnated for the last few decades when it could have flown off to the sky. The remaking of Malaysia cannot be done alone by the bumiputras and the bumiputra policies. Malaysia needs real businessmen and entrepreneurs to attain 2 digit GDP growth and to compete in the international markets.
The political revolution must follow with economic and social revolution.
Help for big time gamblers
The National Council for Problem Gambling is coming out to help the big time gamblers. The Singapore govt is offering Indonesia help to put out fires by fire starters. And today we have a front page news that a trader of UBS lost $2.48b for betting and hedging on behalf of the bank.
The world is getting to be a stranger and stranger place by the days. What is the point of trying to help fire starters to put up fires? The problem is not with the fire but the fire starters.
The other question is, who are the big time gamblers? The guy who blown away his life savings of $200k or the guy who betted and lost $2.48b? Or is it the guy who sits at the top of a huge bank worth trillions of dollars and authorizing the bank and its army of gamblers to gamble on behalf of the bank? Or is it the politician that put out his soldiers to wars hoping to reap financial rewards at the end of the game? Or is it the politicians that spend and spend without a care of when they are going to pay back, or be able to pay back the money they have spent?
We have just seen how America nearly toppled over. We are seeing Europe on the brink of a financial disaster. Who are the gamblers that are gambling with the nation’s wealth?
Definitely not the politicians? Neither were the bankers and fund managers gamblers. They are legitimate investors, fund managers, taking calculated risks with other people’s money. There is no reason to call them gamblers, while they gamble away other people’s money, the bank’s assets, the nation’s reserves.
The world today is really run by gamblers of all kinds. Everyone is putting his bets for a quick profit for his own pockets but declaring that they are investing for other people’s benefits. Some even claimed to be investing for the long term. When bankers and politicians are looking for quick profits instead of making steady profits and returns by taking small and measured steps, the world can be easily toppled without the need to have casinos. Every stock exchange is now a casino. Every country is also a casino.
The world is getting to be a stranger and stranger place by the days. What is the point of trying to help fire starters to put up fires? The problem is not with the fire but the fire starters.
The other question is, who are the big time gamblers? The guy who blown away his life savings of $200k or the guy who betted and lost $2.48b? Or is it the guy who sits at the top of a huge bank worth trillions of dollars and authorizing the bank and its army of gamblers to gamble on behalf of the bank? Or is it the politician that put out his soldiers to wars hoping to reap financial rewards at the end of the game? Or is it the politicians that spend and spend without a care of when they are going to pay back, or be able to pay back the money they have spent?
We have just seen how America nearly toppled over. We are seeing Europe on the brink of a financial disaster. Who are the gamblers that are gambling with the nation’s wealth?
Definitely not the politicians? Neither were the bankers and fund managers gamblers. They are legitimate investors, fund managers, taking calculated risks with other people’s money. There is no reason to call them gamblers, while they gamble away other people’s money, the bank’s assets, the nation’s reserves.
The world today is really run by gamblers of all kinds. Everyone is putting his bets for a quick profit for his own pockets but declaring that they are investing for other people’s benefits. Some even claimed to be investing for the long term. When bankers and politicians are looking for quick profits instead of making steady profits and returns by taking small and measured steps, the world can be easily toppled without the need to have casinos. Every stock exchange is now a casino. Every country is also a casino.
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