Friday, April 04, 2008

Government Secrecy in the Age of Information....

I stayed up tonight to watch the Senate hearing on the Bears Stearns rescue. This hearing is broadcasted around the world uncensored and unrehearsed as various players - Federal Reserve, ex-CEO of Bears Stearns, Treasury Undersecretary etc were asked questions by the Senate Banking Committee on market turmoil on the details of the Bears Stearns collapse and takeover by JP Morgan. The hearing was conducted in an open manner, the senators were thoroughly prepared with tough questions on this complex event that elicted insightful responses .....How much risk did Fed take lending US$30B of tax payers money to Bears? Were shareholders treated fairly?...What was the cause of the collapse? 5 hours into the hearing I got all my answers and a far better understanding of the events that have been occurred in recent times in the subprimes crisis & financial markets.....this hearing was conducted just 20 days after the takeover of Bears Stearns.....

Mas Selamat has been missing for 37 days and nobody seems to know how he escaped. It took 4 hours for the public to be told of his escape and quite a few days before they could tell us what he wore and that he only limps while running and not when he is walking etc. We are told that he has to be kept under detention without trial because he is a dangerous terrorit but there was no hurry to inform the public of his escape because he posed no "immediate danger". The govt not just lost Mas Selamat in recent days, they also lost billions investing in trouble banks. GIC's investment of US$11B for a 9% stake in UBS and UBS shares have fallen substantially since that investment. As a taxpayers you might have some questions on what type of due diligence was conducted before the money was invested, why was the GIC unable to find better investments other than banks that are in big trouble and so on. But there will be no hearing and you will never get any answers. Temasek's investment in Citibank has also depreciated substantially. In response to the recent agreement for more disclosures by sovereign wealth funds, Temasek clarified that it is "not a sovereign wealth fund and does not require government to give approval". I guess it won't be telling taxpayers too much about its great secret strategy in getting involved in investments such as Shin Corp, Global Crossing and Citibank.

In the 2006 General Elections, the PAP govt proclaimed itself a world class government. Yes, our leaders receive the better than world class pay and they deserve it. Unlike other govts who have to take questions from the citizens under Freedom of Information Acts (FOIA) that ensures that except for information that will compromise national security, citizens will have full access to govt information, our world class govt implemented the reverse of the FOIA in the form of a draconian Official Secrets Act, which is so broad it makes sure nothing gets out unless the govt selectively releases it. Indeed, the Singapore govt is world class in keeping information from its citizens. It is important that information resides with only a group of selected elites and not the rest of the citizens because only these people have the intelligence to process the information properly. The ordinary citizens should not be burdened with unnecessary informaton like how Mas Selamat escaped - they should be told only enough information to start looking him in their own neighborhood. Few govts in developed countries are as considerate as ours to pre-process and filter information so that the citizens get only information of the highest quality. For example, our unemployment figures are now reported for "residents" which include PRs not just"Singaporeans" by MoM. As a Singaporean, I cannot find out the unemployment rate among Singaporeans. I guess they are probably trying their best to make me happy by consistently showing me good employment numbers so that I feel more secure as a Singaporean.
Singaporeans are so lucky to have a govt that manages the information they receive. How else can the govt ensure their happiness as citizens (or residents) of this globalised city?...Filtered information like Newater is very clean and healthy for our minds. As good obedient citizens we should learn to suppress our futile curiosity on how Mas Selamat managed to escape and focus on our work so that we can contribute more to Singapore's economy that our GIC & Temasek will have more to invest ....


Anonymous said...

this is a "I know best" government.

I know best u need to do NS.
I know best u need to pay more after the first three years of election
I know best u need to somehow live through inflations, recessions, etc. But don't ask me how.

If Singaporeans want to let them think they are the best, then please carry on. If not, you continue to suffer.

yamizi said...

Live by the day lor.

Relac a bit lah.

Know so much also won't help us in paying the bills and loans we got ourselves entrapped into right?

Most important is for Lucky to share with us his financial understanding and see we can earn a bit of money from there.

Anonymous said...

Dear Mr Tan,

I notice your recent postings are getting less satirical liao leh.

limp biscuit

Anonymous said...

Singaporeans know by default that the funds of Temasek belongs to the Government and yet Temasek is constantly arguing against the whole world that it is not a SWF. Not everyone has to give way to their arguments though, especially non-Singaporeans.

recruit ong said...

excellent post, lucky tan! support!!

Anonymous said...

What do You want them(Leaders) to do and to be?
As Individuals, each of them is like You and Me and maybe even more ambitious.

What does ambitious man want?
Money and Fame, right? Has any man said he has got enough of the two?

As leaders, how do they get the wealth and fame if they do not make us work for them? By their talents? Nah!


yamizi said...

anon @ 4:23pm,

Not all people after wealth and fame de lah. Some also seek simplicity in life and a peace of mind =)

Anonymous said...

possible reason y temasek is not a swf because the wealth generated from investing nation reserves does not go back to the people..simple as that

Anonymous said...

mas selamat is dead.

let's no talk about him.

and do pray for him

wildboar said...

our gahmen is world class,brilliant brain, so GIC &Temasek should earn profit in the long term,poor singaporeans can get rebate,& singapore shares..etc,election come they will give more, so we citizens are beholden to pap, we must increase their% vote to more than 80%, not 66%, next election vote Chiam & Low out, let pap get 100% of parliament seats,let PM salary increase to $5 million, MM $6 million,SM 5.5mill,because they are talented & world class.

Anonymous said...

Mr Tan,

to clarify, GIC's investment in UBS is a convertible bond, not a share, i.e. it is a loan to UBS, and not share.
Even if the share price of UBS declines, GIC still gets 9% per year from UBS; GIC gets to convert the loan to UBS shares only when UBS shares rise above a certain price level.

As a debt holder, should UBS go bankrupt, GIC gets first pickings of UBS too.

In other words, GIC actually gains money with limited losses.


Anonymous said...

those who believe convertible bond holders are much safer than shareholders are in a made-believe fantasy because in either leaves your pocket and goes into the same risk entity --UBS. sure enough, convertible bond holders are accorded seniority & higher priority to claims on assets in the event of ubs default or collapse, but that is pure consolation and doesn't discount the fact money indeed leaves your pocket.

notwithstanding this, usually holders seldom exercise their conversion rights at the expense of their stable yield returns -- that is provided the company is still solvent enough to be able do so.