China’s intervention in the stock market doomed to fail

There is another standard doomsayer’s article in the Today paper on 13 Jul 15 with a title, ‘Is China’s use of state control, money to stem stocks rout doomed to fail?’ When I look at the author, Tom Mitchell, Gabriel Wildau and Josh Noble, I can guess the answer. This kind of China bashing literature has been flooding the western media and our local media for decades.  China is doomed to fail in everything it does. There is nothing clever or sustainable in what the nerds and backward and unintelligent leaders in Beijing could do right. China is full of flaws and the economy is waiting to collapse. And the intervention in the stock market is another unthinkable thing to do. Bound to fail.

In the meantime, for the last 40 years, China quietly plod along, growing from strength to strength and is now the biggest economy in the world in real purchasing power terms, overtaking the USA. How could these foolish Chinamen do this? Unbelievable, cannot be true. China must be doctoring their numbers to bluff the whole. They are all fools. Just wait for the collapse to come.

Unfortunately in the case of this monetary intervention by the Chinese govt in the stock market, I must agree it is a silly thing to do. They cannot hope of artificially propping up a market by throwing money at it and think it will work. It is unsustainable if the fundamentals are wrong. Any PE of above 40 or 50 times is questionable. If there are a few exceptions, it is understandable. But for the whole market, for all the stocks to have such high PEs, in the hundreds, how can it be sustainable?

The Chinese may be banking on their huge surplus and a huge population turning investors against a small number of stocks. Even these factors may be abnormal relative to the rest of the world, but still the enormous PE cannot hold. The general PE in the market may tolerate a few more points higher than international norms, but when it is at a ridiculous level, it must come down.

State intervention is not a flaw per se. State intervention is necessary under the present market condition when there are big boys manipulating the market. The manipulations by the big boys are not different from state intervention. The criticism by the analysts against state intervention is as flawed as allowing the big boys to do what they want in the market with their huge war chests. The big boys are also intervening in the normal functioning of the market. They are not the real market forces by an oligarchy out to manipulate the market to their favours in the guise of free market forces.

Without state intervention, the small investors would be at the mercy of the big boys and their intervention to reap them off. The big boys could push up the market or whack the market down to the abyss.  They are demanding that govt and stock exchange regulators stand aside and let them do as they pleased. And state intervention is unacceptable but their intervention is acceptable, normal and good for the market.

State intervention is now a necessity in a market dominated by the big boys. Without state intervention, the small investors would be at the mercy of the big boys and turned into gun fodder. States and govts must be strong enough to intervene in the stock market to balance against the big boys rigging the market in their favour.

What is wrong in the China intervention is to prop up a market that is already too high with very high PEs. China better think twice and change their strategies to something more down to earth and more real, if they want their markets to function normally in the long run. This short term intervention must be unworn in a matter of time. Yes, this intervention is doomed to fail and will cost the Chinese govt heavily in financial terms.

Let’s be kind to Swee Say

Swee Say said several things he wanted to do to correct the crimes against Singaporean talents in Parliament. These were quoted in a thread in TRE titled ‘Lim: FTs still needed to transfer knowledge to us’.  Here are a few paragraphs of this article.

“The MOM is also looking at how we can support those companies that are able to help us to transfer the know-how and the capabilities to our workforce, over the near term.”

“If we identify that certain areas of skills are in deficit and if we feel that those sources of expertise are available out there, somewhere in the world, we would like to work with companies to bring those expertise to Singapore and put in place a know-how transfer programme so that over time, this skills deficit can be narrowed,….

Mr Lim also revealed that his ministry is acting on concerns over firms with foreign HR directors, who may prefer to hire their own kinds.

“In fact, this is an area I’m looking into as well,” he said.

But he seems to have his doubts over such complaints from Singaporean PMEs.

“I’m not accusing them of being biased. But I would like to know if this concern by many PMEs is founded or unfounded.’

For saying the above, which was nothing new, many commentators took him to task with very stern remarks. I can’t blame them for I too wanted to say the same things. But on hindsight, I think the commentators are being too harsh on Swee Say. Though the concept of transfer of skills and knowledge were 30 years old, practiced 30 years ago but somewhere in time forgotten and lost, it is not fair to expect Swee Say to know these things. He was in NTUC and not in charge of productivity and the transfer of knowledge and knowhow to Singaporeans. He was not in charge of creating a Singaporean core of expertise in the banking and finance and IT industries. He was not in charge of hiring of foreigners to replace Singaporean PMETs. He did not know that Singaporeans were discriminated in the hiring process.  

He just took over this hot seat a couple of months ago and needs time to know what is going on. These problems have been there for years and not resolved, how to expect someone new to the job to know them and solve them immediately?

Let’s not blame him and be kinder to him. At least he is trying to understand the problems in his new job and he needs to know what went wrong and needs time to under concepts like transfer of skills and knowhow. You can’t expect him to know that this was the mantra of the day 30 years ago.

Let’s give him the chance to do the right thing and to correct the wrongs against Singaporeans in the industries. He has very little time to do so as the GE is around the corner.  He has to work very fast if he wants results to show that has indeed done something good for the PMETs and to build a Singaporean core.

And I think he is on the right track, tackle the HR heads and the companies with a lot of foreigners first. He has to be serious and any wayang will only expose his insincerity. All the eyes are on him now as the problems are serious and well known. If he cannot prove anything to his credit, the GE will be very harsh on him and his party.

Whatever you like, he is the best bet among all the MOM ministers in the past. He is the only one that appears to be serious in wanting to do something real. And he knows that time is against him and he cannot wayang anymore like past MOM ministers. The problem is going to hit his party very hard if not tackle immediately and seriously.

Ok, I have done my part to speak up for Swee Say. Now it is his part to produce the results.

PS。If only Swee Say has taken over the MOM 20 years ago, maybe things would not be so bad.

Serving Redbean Soup

Hi Guys and Gals,

I have just received my books from the printers and will be sending them out in the following days.
Only limited copies are available and those who have yet to order, please do so.

And Virgo, can you confirm you have ordered one or 3 copies please.

Thank you everyone.

PS. For Singapore address and multiple copies, please note that one envelop will contain one book and the books may arrive on different days.

Redbean

SMRT lessons: Look at the positive side

It is not good to be negative. Look at the bright side of things. The recent and past breakdowns of the MRT should not be cause for alarm and depression. We need to look at things positively then we can put on a brave and cheerful front and go about life feeling good.

Just look at those countries that don’t have MRT, count yourself lucky to have MRT to move around.

Look at those countries that have people hanging on the trains from the outside, or sitting on the roof of the trains, aren’t you grateful?

Look at Japan, they have to hire pushers to push you into the trains. Here you wait for the second or third train and sure you will be able to get in without being pushed into it.

And where on earth can you find the best talents, paid in the millions, to manage the trains and run it so efficiently?

Be reasonable. It could be worst if you don’t have the best talents like ours running it, or don’t even have trains to take you around.

Don’t listen to people saying that only poor people take trains and you need to bath the moment you get home to rid yourself of the smell of poor people. Our trains are used by rich local people also. They don’t smell so bad like the snobs said.

Count your blessings. This is as good as you can get. Stop complaining. Wait till you get a rogue govt and mismanagement then you will know how good things are today.

See, positive thinking, I already feel better. Hope you people reading are also feeling better. And with the GE around the corner, things can only get betterer. Even the supply of COEs is more than before. And they have found out that Singaporeans are better for banking jobs also and the banks have started to recruit Singaporeans. Everything is so promising.

And there is a good chance that you may get a whole new train system to replace this ageing system. Now that must be something to look forward to. If we can scrap cars after using them for 10 years, we should consider scraping the train after 30 years and get a new and gleaming one with no problems to run again.

Smile, the sun is smiling.

Lin peh kong swee swee.

Transfer of knowledge from FT to Sinkies

After turning a swamp to a first world metropolis, being the best workers in Asia, we have reached full circle today. We are no longer the best knowledge based workers anymore. We are now no better than 3 world rejects. And rightfully we should learn from these 3^rd World rejects, hoping that they would transfer their skills to us even if they are still from the 3^rd World and would take another half a century if they are lucky to turn their countries into first World. Untalented Sinkies should not be shy to learn from the talented 3^rd World talents as they have longer experience being in the 3^rd World while we are rejoining the 3^rd World as a new member.

Now let’s see what skills the 3^rd World talents are better than us that they can pass it to us? What about building clean cities? Yeah, they have the experience in building clean cities. After all they built Singapore into what it is today. We better learn from them. Can anyone name some of the great 3^rd World cities that they built other than Sin City?

What about banking skills and knowledge? What is the name of the financial centres in Asia and SE Asia? Did anyone say Tokyo, Hongkong, Shanghai and did I hear Singapore? Now which 3rd World financial centre did the 3^rd World financial talents came from that is better than Singapore that we have to learn from them? They have the skills set and latest financial knowledge that we don’t have and we must learn from them, transfer of knowledge? Who built DBS, UOB, OCBC, Tat Lee, UOB, Chung Kiaw Bank, must be bankers from the 3^rd World.

Oh IT talents. Singapore got no IT talents. We need to learn IT knowledge from 3^rd World IT talents. What have our polytechnics and universities been teaching, Basic, Cobol or out dated IT programming knowledge? We are so lucky to have 3^rd World IT experts to transfer IT knowledge to us.

And medical knowledge too. There are so many specialists from the 3^rd World here and they can transfer their latest medical knowledge to us. Their hospitals and medical facilities must be world class and their medical techniques must be the best, better than out Mount Elizabeth, Raffles, our NUS and Tan Tock Seng and our general hospitals.

And yes, we need them to fill up our world class universities as lecturers. They are the best talents and our not so talented lecturers and students must learn from them before they are sacked.

Singapore, a first World to 3^rd World country has a lot to learn from 3^rd World talents and will greatly benefit from the transfer of knowledge from 3^rd World to first World talents? Or is it the other way round? Now I am very confused.

But one kind of knowledge sure we can learn. How to cheat in examinations, how to buy fake certificates, how to present degree mills degrees as the real thing? And how to con first World people that these fake degrees are the real thing. But the supreme knowledge or skill is how to make the daft first World talents believe they are daft and stupid by one with only a fake degree or a degree from the degree mills.

I think this is the most precious skill and knowledge that must be transferred to daft Sinkies to save them from being daft and continue to be cheated by the fakes and cheats and asking for more. It is time our world class universities start to teach this supreme knowledge before it is too late.

Seow liao.