How to save the Stock Exchange

How many people believe that the Stock Exchange is in the pink of health? I think no one knows, or no one believes that it is dying, that it can go on a standstill the moment the computer traders decided to call it a day. But no, the truth is that the Stock Exchange is doing fine, doing roaring business, volume increasing, especially derivatives, and will be the biggest stock exchange soon, over taking Hongkong and Tokyo. The daily trading volume is in the billions and expanding, I think. I also agree that it will be a very big success. All the talks about retrenchment and remisiers going out of job or earning less than $2000 a month is bullshit. How can remisiers be earning less than a clerk or a taxi driver? Cannot be lah.



I think, despite the Stock Exchange doing so well, there are some things that can be tweaked to make it even better, with real trading and more retail participation instead of computer trading among themselves with no change of ownership. This boils down to a return to the basics. A stock exchange must not be turned into a casino for the thugs to do what they like. A stock exchange is for investment, long term, medium term and short term, and not for gambling or day trading only. A stock exchange must provide a level playing field for all players big and small. A stock exchange must operate a system that is fair to all players and no one must have any special advantage against others, to plug their computers into the system, to corner the market, ram shares up and down. I think these are all stated in the Rules and Regulations and by laws, no unfair competition, no insider trading, etc etc.



I cannot imagine any stock exchange would allow such violations to go on, or design its trading system to violate its own regulations and by laws. If it does, everyone will know unless the market players are all like the proverbial 4 monkeys, see nothing, hear nothing, do nothing and say nothing. If such is the case, then one can commit murder and rape in broad daylight.



There is a genocide going on in the New York Stock Exchange at the moment. But the regulators’ hands are tied as the big bankers and funds are preventing any laws to be passed to make their looting, rape, murder and arson a crime. So what they are doing at the moment is all legal, no crime.



Our Stock Exchange has adopted all the latest technology and practices of the industry and is the finest in the world, with the fastest computers that can service all the algos and computer tradings with or without retail participation. This is progress. Soon it would not need any retail participation at all. And this is what I think need to change. Retail participation may be bad for a world class super speed stock exchange that can handle millions of trades per second. The slowness of the retail and their small trades are really an irritant. So is the existence of things like remisiers, or key board operators, with little value add to the advanced and leading edge system that cost hundreds of millions.



I say if someone woke up one day on the wrong side of the bed and decided that remisiers and retail traders are needed even in a sophisticated world class stock exchange, and commission is really necessary to feed the backroom staff in the brokerage, below are a few suggestions that I think may help.



1. Separate the trading of ordinary stocks and warrants from the covered warrants and derivatives. The ordinary stocks and warrants should be traded in a closed system like before, for the small time retail traders and remisiers that are too slow and unsophisticated. The covered warrants and derivatives can continue in the present system and can be further expended to cater to the big funds and their high speed computers and algos on their own without the retail as a hindrance. They will be very happy trading among themselves instead of wasting time with small retail traders and the irritating remisiers. It is also a kind of levelling the playing field and the big funds will be most happy to take on competitive players of the same size. The volumes will shoot to the sky definitely.



2. Scrip lending must be stopped. Short selling is ok as long as traders are able to cover their own trades. But it is just not nice to ask someone who owns 1 million DBS shares to lend his scrips to a short seller for $2000 and see his share value sold down by $1m. Can investors be that stupid?





3. Variable commission rate must be normalised to prevent anyone from taking advantage of paying minimal or no commission to beat other players. Can such thing really be in practice, that big funds or proprietary traders been taking advantage of negligible commission rate to make profits against small traders that have to pay higher commissions? Cannot be right ya?. Level playing field and the regulations would not allow any party to have special advantage. If not, insider trading should also not be an offence.





4. Commission needs to be standardised and raised as this is the blood line that pays the salary of the all the remisiers and administrative and support staff, including the CEOs and operations managers of the brokerages. Without commission or little commission, who is going to pay for their salary and the overheads? See, commission is very important to keep the industry going.





5. The teeny weeny bit size is good for the machines to churn their trades. Is churning an offence? This, couple with negligible or no commission means that the computers can trade in the millions and to make profits by one single bit either way. On the other hand, the greedy little traders need several bids before they can make a little profit. The system should be modified to increase the bid size to the previous levels for the big funds and their machines to make bigger profits in a separate system detached from normal stocks. It is good for them and the small traders as well. Who does not want to make bigger profits unless, unless, the small bid size is specially designed to favour the big computer traders. This definitely cannot be. The system is definitely designed to be fair to all. Let’s make it fairer for the big computer traders by increasing the bid size, let them make more money from the small retail traders who are expert enough to trade derivatives with them without the aid of high speed computers plugged into the system. I am so thoughtful for the big computer traders.





6. Oh, no lunch break and continuous trading. I think the remisiers would not mind having a lunch break when the stocks and derivatives are traded under two different systems. Before I forget, the ordinary stock and warrant trading system must be a closed system and no one is allowed to plug in their computers to gain an advantage over the less sophisticated and cheapskate small traders that cannot afford to invest in high speed computers and software. When this system is back in place, the remisiers can afford to make less with lesser trading volumes and be quite contented. The computers and their algos can continue to trade in a separate derivative system without lunch breaks and churn as much as they like. Who cares? Anyway computers need not have to eat or to pee. In fact the Exchange should provide a non stop 24 hours trading system to please the algo and computer traders, but just spare the remisiers as they are human beings and need a break every now and then.





These are just some minor changes that I think could make the stock exchange even better and healthier. This is free advice, no need to pay big consultation fee unless a comprehensive and detailed proposal is needed.

The Art of RAR

The most compelling story of a new photopainting technique developed by a Singaporean is waiting to get some notice from the local art scene and the critics. I am still promoting this new art form/technique locally and if I fail to get any support or notice, then I would have to go out of this little island to seek the attention of the world. While our local critics and reporters are busily covering the works of foreign talents, incidentally my work was first featured by a Malaysian lifestyle magazine, the Essenze, a couple of months ago.

The most remarkable feature of this technique is that I could create many pieces of artwork, on paper or canvas, just by pointing my camera to a pond of the water. With proper set up, I could create many never seen before paintings and concepts that no human artiste could think of.

My work is a collaboration with Mother Nature with the latter doing the conceptualisation and the main features of a painting and I doing the finishing touches. These unique and revolutionary paintings are now on show at NUSS Guild House at Kent Ridge till 21 Dec 12. More than 30 pieces of my work are being exhibited and all are welcome.

Admission is Free.

Is Sinkieland a cheap third world joint?

Is Sinkieland a first world city or a third world joint? Are people and companies coming here because they see value in this island that could make their investments worthwhile as a package or just a cheap joint for low cost industries?

The picture painted is that this is a first world city where the talents of the world would like to be. And from the statistics on the huge influx of foreigners into the city to work, to become PR or citizens, this must be a choice place to be in. Surveys by international agencies also supported this view that Sinkieland is top choice for expats living and working.

If the finding is real, the city need not worry about companies setting up operations here and threatening to leave if foreign labour or half baked talents are not available. The city should be able to pick and choose and tell those companies that think low cost labour consisting of foreigners is the comparative advantage to set up operations elsewhere. But if we are being deceived and the reality is that this is another shit hole that no companies would want to locate here unless they can bring in third world cheap talents, then we have a serious problem to think about.

What is the truth? Is the city being held ransom by cheap labour intensive companies or really a choice destination, with good infrastructure, rule of law, ease to do business etc as the trump cards that put low cost labour as irrelevant?

One of the truths is that the high cost of operations is at the top and high rentals. Thus anything below top management has to be cheap. This makes sense to recruit more cheap foreigners to fill the ranks. And the reports that Sinkies are a minority in many foreign owned companies here is true. What choice do Sinkies have?

Are sinkies prepared to be a minority in the workplace eventually in the little island they called home? And not to forget, foreigners depressed wages but cost housing prices to go up, as well as cost of living. They are tearing away at the heart of Sinkies basic concerns.

Incestuous relationship and self gratification

The natives of Sin should stand up to applaud Prof Tommy Koh for his vocal support to the lonely voice of Prof Lim Chong Yah in his call for narrowing the income gap and inequality in our society. And thank the ST for publishing his view on this. One or two individuals, no matter how distinguished, could not make any ground against a pack of hyenas. There is an urgent need for the intellectuals with a conscience to stand together to make the voice heard.

In his article in the ST today, Tommy Koh was hitting hard by quoting British PM David Cameroon’s comment about incestuous relationship in high places, ‘I scratch your back, you scratch mine’ in the UK. Among the pseudo elite who are there to protect each other’s interest and pocket, there is a race to pay one another as much as they could. This kind of self gratification or in colloquial terminology, ‘pah chiu cheng’ is getting so serious and prevalent that it has become a norm. The elite thought nothing of it, that it is their right of passage to richness and instant gratification.

The pseudo elite are not blind or stupid. They knew exactly what they were doing, selective objectivity. Tommy Koh quoted the choice of using the flawed American model to pay themselves crazy instead of the more conservative Japanese model when the loot is much smaller. It is so glaring that the American model is running down the American and the world economy, but the pseudo elite are turning a blind eye to the dire consequences awaiting. They refuse to acknowledge or discuss the flaws of the system as long as they can continue to ‘pah chiu cheng’ and have a good time at the expense of the other extreme end of the social economic spectrum.

Tommy ended his article by saying, ‘In conclusion, I wish to thank Prof Lim for being our moral conscience. He has reminded us that our mission is to achieve growth with equity. Our mission is to build a fair and prosperous Singapore. What we have achieved so far is a prosperous but unfair society. Prof Lim has warned us that we have deviated from our original path and that we are dangerously close to a point when our inequality could adversely affect our cohesion and harmony.’

Thank you Tommy. To those elite with a conscience, Tommy added, ‘those at the top, should, however, reflect deeply on Prof Lim’s proposal and on their responsibility to society.’

Unfortunately many are busily trapped in the act of ‘pah chiu cheng’ and have no time to reflect and simply shoot off their hips at the proposal of Lim Chong Yah, without taking their attention off their act of self gratification for a moment. Just wait for the hyenas screaming in chorus to attack Tommy this time.

I don’t want to be a cab driver

Official media are written by paid professionals who carefully checked and verified their facts before printing. They even have editors and proof readers to go through their writings before appearing in prints. The quality and credibility of official media as far as factual reporting is concerned is unquestionable. Who would believe that NYT or Washington Post or CNN or Foxy News etc would print half truths or misleading articles to con their readers? No, they are very respectable media according to their believers and followers.

I was so convinced that a cab driver can earn $7000 per month less cost, which means his gross income was likely to be more than $10k, that I wanted to upgrade to become a cab driver. I am so lucky that I also read the unprofessional media written by unpaid and unprofessional bloggers. They are saying that this $7000 cab driver is a fake. Now I have to choose to believe the unprofessional whose information, not news, seems to be more reliable.

I am now changing my mind. I am not going to be a cab driver. I was almost taken in by a temporary or occasional truth. I am so gullible. Thank God there is the social media to counter check to find out the truth before I make a grave mistake with my career change.