China intervention in market rout

China was forced to intervene in the stock markets following the recent sell down, wiping trillions of dollars from stocks and with many late entries suffering painful losses. The first day of intervention was quickly reversed and the rout appeared to continue to run to the abyss. China went in with more restrictive measures yesterday and for the moment has temporarily halted the fall and turned around with the biggest one day gain of 5.8% in the Shanghai stock market.

The measures introduced include halting trading of 50% of the stocks and forbidding big shareholders to sell their shares. Investigations are going on to look at malicious trading that contributed to the plunge in the market. Though the measures avoided a free fall and more losses, some market analysts as usual have started to express concerns about state intervention and not allowing market forces to do the damage.

What are these market forces? There will be the natural herd instinct, the panic buying and selling of investors at any sign or news that would affect stock prices. What is more dangerous is the collusion of big players, big funds, working in tandem to drive prices up and down at their callings. These are not the innocent market forces. These are big market manipulators. They operate as a wolf pack and reap great profits from the innocent small investors.

All the western modelled stock exchanges that allowed big funds to trade in them are faced with this risk of wanton manipulations. How can this be classified as market forces? These are not your normal investors but bandits that used their muscles to muscle in and out of a market like a bull in a China shop.

The only way to counter and prevent these big players from destroying a market and the wealth of small investors is to have a counter force in the form of govt intervention. It is only fair. Only silly govts and stock exchanges would think that govt intervention against these big forces is unacceptable and contrary to the operation of market forces. How can such big players and their irresponsible modus operandi to reap huge profits at the perils of small investors be allowed to run freely and unrestrained and be regarded as fair play, as market forces?

All govts and stock exchanges must have an instrument and even war chest to counter the destructive nature of the big players. Otherwise they are just being irresponsible and unfair to the small investors, like giving a licence to the big players to go for the kill, with their approval.

The Chinese intervention in the stock market is the right thing to do to prevent a very unfair and unlevel playing field. But what is important is also for the regulators and govt to manage a bubble and not allow a market to go wild. When a huge bubble is formed recklessly, the result will be a rout when the bubble is pricked. The Chinese govt must not let irrational exuberance to repeat again and for the present, how to unwind and deflate this bubble without causing too much damages. It was stupid to allow the market to run amok in the last few months and think that it was normal.

The volatility in the Shanghai stock market is not over yet and would take quite some time for the market to stabilize at a lower level.

Don’t leave home without it (part 2) – Free Shuttle Service

Tuesday night’s epic train breakdown involving two main lines is something to ponder. 250,000 commuters stranded, frustrated, angry and got their evening messed up, late appointments, late dinner, late for everything, some missing them altogether.

In my first article on the same subject, I recommended that every commuter should lug a folding bike in case of a train breakdown. What about Free Shuttle Service? Isn’t that meant to ease the problem and congestion when a train breakdown occurs? This Free Shuttle Service sounds so pleasing and the cure all for such a situation. I have one experience of it and knew how effective it is on paper, or how ineffective it will be in a real situation. All I can say is that the effectiveness of this service is as good as not having it. Let me explain.

The logistics of this Free Shuttle Service just does not work. The meticulous planning of this service will not improve much as there are so many variables going against it. For a start, a simple play with the numbers will throw this emergency service haywire.  250,000 commuters at one go, how many buses will be needed? Would there be enough roads to allow the buses to pick up the passengers? What if there is an island wide power failure and all the lines went kaput at the same time?

The other problem is the people, the MRT staff, the bus drivers and the commuters caught in a breakdown and wanting to go home. The easy part is the station staff. They can be trained and briefed on exactly what to do, where to direct the commuters to the pick up points. This is as easy as ABC if the staff gets their regular briefings and not once in 6 months or a year.

Next the bus drivers. This is tricky. The standby drivers are not always the same and the stations they will be sent to will not always be the same station. They could be called to Woodlands or Tampines or Redhill. How are they going to familiarize with the routes to take when every incident is unlikely to be the same, and the standby driver will also not to be the same? What will happen is that you will have different driver going to different places to pick commuters using different routes. The only solution is to go robotics where everything can be programmed. Without robotic drivers, no standby drivers would be familiar with the location and the routes.

The commuters will also be a big problem. Everyone is new and would not know where to go to take the correct bus to the next destination. They will be unfamiliar with the pick up points and which bus to take. They would not know which route would the bus take and where to drop. How to brief 250,000 lost and unorganized crowd to direct and control them to the right pick up points and to take the right bus is mission impossible given the limitation of time, space and equipment.  And the space around the pickup point would not only be too small for the crowd but also for the buses to wait for them.

A one station breakdown may still be manageable. But more than that or in a situation like Tuesday or worst scenario, the Free Bus Shuttle Service is completely ineffective.

Don’t leave home without it. Have folding bike will travel. This may be a realistic solution if only the bike can be put in the pocket or backpack. Free Shuttle Service anyone?

Redbean Soup serving anytime soon

Everything is settled and the book is in the process of being printed. The printer has promised to deliver by 15 Jul or earlier, which means at the latest early next week.

There will be 54 articles as planned but not 200 pages. My intent was for 200 pages and I had to remove several articles earlier to fit to size. The printer has somehow redone the layout and squeezed the text all into 132 pages, very compact. I should have put back the articles I removed earlier but it would delay the completion date further. Inexperience makes a big difference. Will learn from this and not to repeat it in the next few books in the series, if the sales are good and I get to publish them.

For those who have ordered the book, I will autograph them and mail them to the addresses given. Anyone who need to make any changes, please email me at redbeansg@yahoo.com. For those who ordered multiple copies, please let me know how you want them to be autographed.

The book should be available by next week latest. I only print a small limited copies, for those who have not ordered, please make your orders asap as it would be on a first come first serve basis.

The book is recommended reading for politicians of all parties, colours and stripes as well as civil servants and uniformed services. University students and those taking their A and O levels will find it helpful in their  GP and English papers. And all Singaporeans who are interested in the affairs of our country, the book will set you thinking about what is going on and how things should be.

Cheers
Redbean

PS. Printer said the book will also be available at the National Library. I think this is a standard requirement.

Shanghai and Hongkong stock exchanges, a time to learn the hard way

The recent run up in the Shanghai and Hongkong stock markets and the tumbles they took in the last few days are exactly the kind of things they should be wary of and to avoid at all cost.  It is elementary, set pieces that do not need much intelligence to know that it will crash.  When PEs are too high, when there is irrational exuberance and a big bubble, what would you expect?

The high manipulation of stock markets, when the big boys are able to use their war chests, working in cahoot as a gang, to drive up and down markets, are dangerous to stock market operators and small investors. The big sharks are there to gobble up everything, including the bones if they are left free to do as they liked.

The Shanghai and Hongkong exchanges have been under tremendous pressure by the western manipulators using the excuse of liberalization and non interference as the new international norms of exchanges, to allow them to do as they pleased. Both exchanges should not be seduced and conned into allowing these international financial bandits to run wild in their exchanges. They should not forget the basics of a stock exchange and proper supervision to stop wild manipulations of the market.

The most dangerous things to come, and they are knocking at the doors, are derivatives and computer assisted tradings like algo and HFT. The former is anything but rigged gambling and the latter is simply unfair trading. Both are crimes against the innocent investors.

Take heed, learn from the current upheavals and steer a path that is fair and sustainable for the growth and proper functioning of stock markets. Do no allow the stock market to be turned into free wheeling casinos under the full control of these financial bandits. They are very destructive and will drive stock markets to their early demise. Never allow the bandits a free hand to do as they pleased.

A good example is the Singapore stock market. It still does not know what is going on or in a state of denial.

NTUC to help PMEs to be competitive? MOM also in the picture

‘Speaking at the launch of a Master Class series by NTUC’s Employment and Employability Institute (e2i) last Friday (3 Jul), NTUC Secretary-General Chan Chun Sing told the audience that NTUC is keen to help Singapore professionals, managers and executives (PMEs) improve their skills and widen their networks so that they can compete better on the international stage.

“As our economy transforms, more and more of our people will be in the PME sectors, and (it) is also NTUC’s job to make sure that we help our PMEs remain competitive and stay ahead of the competition,” he said.

I copy this paragraph from an article in the TRE titled, ‘Chan: NTUC to help PMEs compete internationally. And my immediate reactions were, what was he smoking, where did he come from? Does he know what is happening on the ground? Does he know what he is saying?

Our PMEs are losing out to fakes and cheats and foreigners with dubious qualifications from funny universities. Do they stand a chance competing internationally? It is like unable to compete in a pond and wanting to compete in the ocean?  What is this e2i magic? Is it recognisable by the world, better than degrees from top universities?

I am dumbfounded.

The comments following the article said it all. And all I can say is ‘笑话’, he can’t be serious? Or is he trying to say competing with international talents here?

Swee Say appears to have a better grasp of the problems. He is going after companies with a poor Singaporean core. The MOM is going to scrutinize the employment pass applications and the qualifications of the applicants. Fakes and forged degrees will not be tolerated. IDA please take note. There are several other measures Swee Say is doing that may work, some temporary like stop gap measures, but generally he is looking in the right direction.

It is discrimination and fakes, stupid. Unless these two devils are pulled out with their roots, every measure will be superficial and will be seen as a gimmick to appease the people in lieu of the GE.

What I would like to see is a 3 month amnesty for all the fakes and forged degree holders to resign and go home. After this grace period, the MOM would go down hard on fake degrees, degree mill degrees and forged degrees. Anyone caught will be subject to heavy fines and imprisonment. The heavy fines are needed to crawl back the amount of dubious salary earned from their crimes. And they could pay directly from their pockets or sell their properties. Many fakes and cheats have already sunk roots by buying into properties here thinking that the MOM would not be looking into history as they have been here for a long time and their trails have been well covered. Fakes and forged degrees are just that and have to be combed and removed no matter how long they have been here and hiding under a thick layer of new legitimacy.

And to mean business, all organizations with 200 staff and above must employed Singaporeans as their HR managers to ensure that govt policies are not swept under the carpet or just paying lip service and mugging around with the numbers and distortions.

Is Swee Say up to it to implement serious and real measures to rid this scourge once and for all? If these two evils are removed, there is no need for the NTUC e2i training to compete internationally. There will be plenty of jobs awaiting our very own PMEs. PME unemployment rate only 2.7%? Who’s kidding? What about giving up searching or underemployment?

The foreign cheats and fakes are watching. So are the Singaporeans. Any half baked measures, half hearted measures, and wayang for the sake of the GE would stand up sorely like a sore thumb. The govt, the MOM and Swee Say need to regain the trust of the people and not be a joke to the foreigners, thinking they can continue to cheat them like before, silly buggers didn’t know what is happening and so easy to con..

Let’s see what Swee Say and his MOM will do to up the stake.