Malaysia’s 1MDB crisis

The husband is the PM and the wife is the Chairman of a sovereign fund. They thought having a sovereign fund with a lot of borrowed money must surely make money. They may be doing a copycat operation after visiting the rich southern state with two successful sovereign funds to boot. So the husband and wife team copied the successful formula of their neighbor, to every small detail, to borrow billions to set up 1MDB, after Khazanah, to invest with OPM. With so much money to make money, how to lose, or at least statistically it should make money in the long run. Even if the money is lost, so what when it is OPM?
 
Somehow sovereign funds have the same bad habit of buying high and faced with immediate fall in value and then hoping for a good return in the long long run. This formula never fails. 1MDB is no exception. But no worry, the long term would be ok, and they went investing recklessly, buy all kinds of shit that the snake oil sellers threw at them, even hot air.
 
The PM and his wife are now accused of corruption openly. Everyone is talking about it, from the kampong folks to the lawmakers. And they did not mince their words and were very generous in the use of the fear term, ‘corruption’. I was viewing the video clips of presentors Haris Ibrahim and Rafizi Ramli and their interviews with Tony Pua on the subject of 1MDB. My God, if you want to know what democracy and freedom of speech are you must google for these names to know what we are missing.
 
Najib and Rosmah are involved in this corruption case amounting to 42 billion ringgits in unexplained debt, and the audience roared with the approval. And why was Mahathir complaining? Because he did not have his fair share, that’s why. And who topped the list in the total value of bad debts to be bailed out by the Govt? Mahathir pipped Najib by a nose but only because he ruled the country for more than 20 years. Najib did what he did in 2 years. And the good news, Najib is catching up fast. Wow, can this kind of language be used in our little island of democracy and free speech? I don’t think anyone would dare to say these things even in Hong Lim’s Speakers’ Corner. Oops, not true. I am sure there will be brave people, given the permit, to stand in Hong Lim’s famous little mound to say Najib, Rosmah and Mahathir are corrupt. Sure can.
 
Tony Pua and Rafizi even claimed that the ruling party was treating the Malaysians as daft, a familiar note, not being able to understand how the money was transacted through many layers to lose its trail, till no one know what to ask, where it went. At least our MPs and ministers know how to ask where is the money going. Everything is secret and there was no transparency in 1MDB’s activities to talk about. Is that new? But Tony Pua and his gang were still able to trace the highly questionable investments in oil fields in Altantuya’s Mongolia and the Caspian Sea with equally questionable companies operated by unknown and questionable individuals.
 
The facts that were revealed and confirmed, according to Tony Pua, were that a govt sovereign fund under the charge of the wife of the PM has been involved in questionable dealings and the PM could go down with it, and they are going after Najib and Rosmah for accountability. Tony and Rafizi also claimed that the 42b ringgit of debt by the sovereign fund could bring down the Malaysian govt and affecting every Malaysian adversely. This part I find it quite unbelieveable for such a big country, with oil wealth oozing out from the sea, to be at crisis level all for a miserable 42b in ringgits which is not even 20b Sing dollars. That only proves how rich Singapore is compares to Malaysia. Even without oil oozing out from the sea, we don’t even bat an eyelid with the officially announced lost of $50b or $60b Sing dollars during the financial crisis. In ringgit terms that would be more than $100b! What crisis are they talking about?
 
Anyway, it was an eye opening experience to know the generous space available to talk about corruption of a PM and his wife involving billions of public money, OPM. And they are not even charged, just assumptions and insinuations. And as if God wants to push the knife deeper, the falling oil price would only accentuate the severity of the miserable 42b ringgits and made it a bigger crisis.
 
Malaysia boleh, at least in democracy and in free speech, and the wide berth to play around for the opposition lawmakers in Parliament. The speakers were so casual when they made the corruption charges as if the PM and his wife were already guilty. This is a plus point for the Malaysians. The names of Najib, Rosmah and Mahathir and other senior politicians were freely and loosely used for condemnation with no hesitation, no restraints or the need to self regulate, with no fear of being sued to bankruptcy. They were telling them like jokes in a kopitiam but on youtube and in public forum.
 
Can’t imagine a similar scenario happening in Sin City. The husband and wife team’s days are numbered and it is only a matter of time for more disclosure of 1MDB’s debt problem. They can’t keep manipulating the accounts to show profit when there is no profit or hide under non disclosure or secrecy. And there is a limit to how much they can squeeze from the provident fund and the number of assets they can transfer to the sovereign fund to make it look good. Everything is hidden, secret, no need to tell. And this is what made Rafizi and Tony giggled. Secret lah! When no one knows what is happening, something seriously wrong is likely to be happening.

Who decides who is fit to be the next govt?

I want to follow up with Boon Wan’s statement that the Town Council is the PAP’s way of testing the opposition MPs’ability to run a country. Is running a Town Council a necessary or effective way to gauge a party or MP’s ability to run a govt? LKY never run a Town Council and so did Goh Keng Swee. Maybe that was why the country was so badly run then compared to how well it is run today by the new leaders with the privilege and experience of running a Town Council.
 
To me, running a Town Council is a piece of cake for any reasonably clear thinking individual. The difficult part is to navigate through the landmines, traps, obstacles and avoiding snipers and ambushes along the way. But to be serious, to really want to manage a Town Council to resemble running a country, to benefit from the experience, then it should go all the way. Let the Town Council be run like a mini state, collect its own taxes or be awarded its fair share of the tax collection, let them run their own police and mini civil service etc etc. That would really be a meaningful training experience.
 
The current structure of running a Town Council is more like how to overcome the problems and difficulties in an obstacle course when things were just being difficult, when they have no autonomy in finance and in having very little bargaining chips in their dealings with other govt agencies. How fair is the playing field for opposition parties to run their Town Councils and how fair is the test of their ability to run a Town Council like running a mini state? Heard of playing against a loaded dice?
 
By the way, does an opposition party need to gain the approval from the ruling party in how to run a country, to pass the test set by the ruling party, and then be given a pass grade to go ahead to run a country? Who decides which party is suitable to run a country? The ruling party or the voters?
 
An alternative party does not need the blessing and consent of the ruling party to be the elected govt. It is not the power of the ruling party to set the conditions and to say the alternative party is not good enough. It is the right and will of the people to decide who they want to run the country. This is a democracy, not a monarchy or someone’s grandfather’s company whereby the family call the shot and decide who is fit or not fit to take charge. Maybe I am wrong and Boon Wan is right. The ruling party would decide who or which alternative party is able to run the country.
 
I have a suggestion. The alternative party should send their candidates to PAP for tea, for a fee of course, to be certified fit and able to form and run a govt like the PAP candidates, everyone chopped with the PAP quality seal and ISO 9001 certified.

Saving SGX

It took two petitions, one online and one offline, to pack Magnus Bocker off. SGX announced yesterday that he would be leaving by end of June. The important task at hand is how to save the SGX from the ICU? The state of denial that all is fine is not an issue to MAS. The main problem is whether MAS sees any problem with the pathetic or critical condition of the stock market. Is everything doing fine, more new investors signing up, more derivatives being traded good indicators of the health of the stock market? Or would the MAS look at the number of investors really trading and the value of trades done in the equity market, the number of remisiers leaving the industry,  and the pittance in commission being generated?

There cannot be any real solution to the dying stock market if the cause or causes of its demise are not diagnosed. Does anyone really know what is wrong with the stock market, wants to know what is wrong with the stock market and to do an overhaul of the failed system? Yes, it is a systems fault, its problem is systemic, not no lunch break, not smaller lot size, not super penny stocks, not dwindling volume and disappearing investors. These are only symptoms of the cancer that is crippling the market and would go naturally if the real cause of the failure is identified.

If MAS is still wondering where to start, go to Shanghai. The Chinese have been studying the American model of stock trading and knew exactly what is wrong and are not going to repeat the same mistake. They are offering Shanghai and Hongkong as the alternative system where computer trading involving super computers in HFT and algo trading would not be allowed, where large scale manipulations would not be allowed. They are returning to the basics of stock market operations. There is an article ‘China now gives investors an alternative to (the)manipulated HFT U.S. stock markets’  at www.examiner.com.

Computer trading with high speed computers plugged into the main system of a stock market is simply unfair trading, giving unfair advantage to the computer operators to manipulate and rob the rest of the investors in broad daylight.

And the last thing the SGX should do is to go globe trotting to hunt for another foreign talent to replace Bocker. It would be a replay of the pathetic story all over again as most of these talents would still be sold to the American model of computer trading and all its fraudulent ways.

The MAS is faced with a mammoth and arduous task to quickly disconnect all the toxic cables connected to the SGX main trading system. These external computers are like parasites sticking to the main trading system and sucking everything, every dollar from the investors.

The stock market must go back to its original role as a source of funds for the industries and not a casino. It must not be turned into a cheap gambling system for boys and girls to play with their pocket money. The boys and girls can go and play monopoly. The stock market is for the adults to invest, for the industries, the corporations to tap as a source of fund for growth and expansion. They can’t get the funds from little children in the schools.

The stock market must be X rated and not PG13.  The broking houses and the Society of Remisiers must use this window to work with the MAS to find a real solution to the serious problem the stock market industry is facing. Make the stock market do what it was originally supposed to do. We already have two casinos and there is no need for a third casino. The broking houses and the MAS have a common interest to want to see the stock market back in the pink of health.

What is the point of having more boys and girls signing up as potential investors when they are not investing? It is time to be real. Or would this opportunity be wasted and everything back to square one with the hiring of another foreign talent to do the same thing all over again, with the stock market fighting for its life in the ICU?

If I am the PM

I know this is as good a talking nonsense. No one can dream of becoming a PM unless he takes the first step to join a political party and become an Indian chief of a political party. I have not joined any political party so thinking of becoming a PM is academic. But it is quite fun really, to talk cock once a while. Many people did that. So let’s talk about this daydreaming.
 
Let’s say suay suay all the parties become minority parties and need to form a coalition govt but cannot agree on who to be PM. Then they look around for someone neutral and call Redbean to stand in as the PM. So I am the PM. I would want to be the most righteous PM, most caring PM, most pro Singapore PM, not necessary pro Singaporeans. I would like to even add, the most religious PM but that would only insult the religion that I professed to believe in. So I pass this one. I am no good and I have no religion so no need to pretend to be religious and spoil the good name of the religion.
 
OK, I must think Singapore first, always think Singapore first. This is not the same as the Singapore First Party. The latter thinks and wants to care for Singaporeans. I want Singapore to do well, to prosper, to grow into a vibrant and rich country at all cost. And to do that, it must have very good and clever people with the right qualifications and experience to govern the state.
 
I will start with the President. I will make the criteria for this appointment very stringent. Remember, he holds the second key to our reserves. So not anyone can offer himself as candidate to be President. See, I set very high standard for a good President to look after our reserves. He must have excellent credentials and experience in managing big money. I think someone in the finance industry like CEO of GIC, Temasek or DBS would qualify. Anything less no good. The President is all about guarding the reserves of the state so I think it is good to limit to finance people, top bankers and top fund managers. The rest no need to apply. Oh, PM and Finance Minister exempted, automatically qualified.
 
As for the politicians, MPs and ministers, they better be qualified or have knowledge on how to run a country. Yes, yes, they must know how to run a Town Council for a start, a prerequisite. But that is elementary. They must know the meaning of running a country and must be qualified or trained in government. Just because a person is a lawyer or doctor or engineer, or a general, does not make him good enough. Running a country means knowing everything, from being in the govt to running clans, trade unions, sports clubs and charity organizations. To be able to do these jobs, to become a ‘knows all’, they must have a degree in govt.
 
NUS and NTU must conduct a degree course on govt and anyone wants to stand for election to be in Parliament must have such a degree. You think running a govt is masak masak and any Tom, Dick and Harry with all kinds of unrelated qualifications and experience can just walk into Parliament and start to run a country. Cannot right? I am the PM so I decide what is best. I may even try out a candidate to catch rats. If cannot catch rats then not good enough. To me, since I am the PM, I regard catching rats very important, more important than running Town Council. Who is there to say I am being difficult?
 
Ok, exceptions. All incumbent MPs and ex MPs can be exempted from this degree course. They got experience mah. The new rule would apply to new politicians to be. As the new PM, I want to raise the bar to make sure only good people with the right experience and qualifications can stand for election.
 
See, I think only good for Singapore. Singapore will be very good, will go on forever and be prosperous forever under my premiership.
 
Agree or not? My conditions good or not?
 
Ok, Ok, I daydreaming only and pretending to be good PM.

A handout budget but something missing

Call it an election budget or whatever you like, it is a handout budget, full of handouts for the people. Everyone is going to collect an angpow somewhere along the line. The biggest and most welcome package would be the Silver Support Scheme. Remisiers would be happy to know that this scheme will be most appreciated as many will join the ranks for this handout. I doubt there would be many criticisms about the money handing out by the Govt other than some minor complaints of people missing out or not getting enough. I would leave the nitty gritty to the social scientists and statisticians to delve into the fine details.
 
I was looking for something else, the future of Singapore. This is what the Govt called this budget, a budget for the future of Singapore. I can see a lot going to education and technical training and some piece meal crumbs for middle management as an after thought that would not result in anything meaningful or substantive. We will be producing a lot of quality technicians and foot soldiers and also an appeased middle management.
 
The issue of PMEs is left blank. Nothing mentioned and very likely many will continue to join this rank and be beneficiaries of the Silver Support Scheme when they join the Silver Brigade. The other important and critical structuring that was left untouched or unsaid is top management. The technical schemes and support given to students would result in a lot of good technicians, a lot of little Indians.
 
What about the Indian Chiefs? Would Singaporeans be good enough only to be little Indians and the Indian Chiefs would still come from non Singaporeans, the so called foreign talents? Is our top world class education system and tertiary institutions real or just hogwash? Why is it that our graduates from these world class universities not making it to the top but being replaced by wild oats from God knows where and definitely not world class universities except those from the North? Do we believe in the quality of our education system, that our graduates should fill the top positions in govt and in the private sector?
 
Apart from the fetish craze that angmohs and foreigners are the best, and the colonial mentality that we are daft remnants or descendants of the British colonial regime, the leftovers, what is wrong with our people that they cannot become Indian Chiefs in their own country while most of these positions have to be filled by foreigners from banking and finance to sports and recreation? Many of these top positions do not require geniuses to do the job and many of the foreigners are not genius either but the average Joe in their country. Why are our top talents found wanting and being discarded?
 
Many years back, the finance industry was filled by our own local talents when there were govt initiatives and policies to ensure that. What is missing today? If we could do it then, we must be able to do better with our world class universities and top grade students. Where is the political will and decision to ensure that our own talents become the Indian Chiefs and not some unknown wild oats given a pink IC or not necessary even?
 
The budget did not mention anything about creating more true blue Indian Chiefs. The policy of bringing in more foreign Indian Chiefs and allowing govt and private sectors to fill the Indian Chief positions as they like is unchanged. The restructuring has left this out completely. Would the future Singapore be controlled and run by foreign Indian Chiefs with Singaporeans providing the little Indians and running around like little Indians and be happy with the situation as long as there are cheap handouts from the Govt?
 
Maybe the Govt would be addressing this restructuring to allow more Singaporeans to rise to the top in a separate White Paper. Do you really need the angmohs to run the parks and the zoos and the aquariums? Do we continuously have to rely on foreigners to train our sportsmen at international level? When are we going to produce our own top coaches? Is there something missing in the budget? What is the missing link?