Thursday, January 29, 2009

Singapore Budget Discussion

BREAKING NEWS : Jan 30, 2009 SINGAPORE'S unemployment rate rose to a seasonally adjusted 2.6 per cent in the fourth quarter from 2.2 per cent in the third quarter as the economy weakened, the government said on Friday. It also said job growth slowed to 26,900 in October-December from 55,700 in July-September. -- THOMSON REUTERS

In Singapore when they discuss the budget, they gather people who have plenty of soft questions, show support and praise for what our govt has done. During the Istana Open House, the ChannelNewsAsia filmed a friendly President Nathan going around telling the visitors be appreciative of what the govt has done because it has gone "out of its way" to help Singaporeans this time.

The more I think about the budget, the more I begin to appreciate how interesting it is....when more people go through it, it is actually a budget of many interesting things.....

One of the unprecedented things the govt did this time was to tap the reserves. I think that was why President Nathan said the govt has gone all out to help Singaporeans this time. I thought the reserves belongs to Singaporeans so why is it a big deal to use it to help Singaporeans? But it does get more interesting if you think more about it. Under the current govt they actually had huge surpluses including the gigantic one due to the GST increase. If you do the sums (anyone come to a different conclusion, please post a comment), there is actually no need to dip into the reserves because the govt can spend this current surplus. This surplus thing gets more interesting because it does not include land sales which brought in billions during the property bubble. So the first interesting point is this, the govt has dipped into reserves when it didn't need to do so to fund this you know why they have gone out of their way.

The 2nd interesting point is the biggest idea in the budget,the Jobs Credit, which is intended to help Singaporeans. It helps Singaporeans by giving companies a wage subsidy...i.e. it helps Singaporeans(+PR) by not helping Singaporeans directly. Heck this idea is really interesting because this Jobs Credit gives money to all companies...gee the govt even gives money to itself because it is the biggest employer in the country. This idea has been sold as a "jobs saver" by our newspapers for a few days. Companies are retrenching workers not because their wages are too high but because demand has fallen sharply. Look at it this way, they are losing jobs by the millions in China where wages are very low. the current situation, we are not losing jobs to China or India due to higher wages, the current bout of retrenchments is caused by a fall in demand. The main goal of the budget is saving jobs, something that cannot be done effectively since the govt has created an economy that is largely dependent on external demand.

The next interesting point is what the budget did not do. The greatest fear for most Singaporeans being jobless. Unless you have been living in your closet, you should be able to figure out that thousands of Singaporeans will be jobless in the coming months. The budget does not address this huge problem that is coming. Interesting isn't it? A budget that goes "out of its way" to help Singaporeans but does not address the biggest problem that Singaporeans are facing. A related problem is the arrears for HDB flats....about 8% (probably more by now) have defaulted on their loan ....don't these people need help? The Jobs Credit will be giving money to companies such as Intel, Microsoft, SIA, SMRT...which are cash rich. Why not give money to the people who needed instead of companies that don't need it? Because of the high cost of living in recent years, Singapore families will be entering this recession with the worse household balance sheet ever, this makes it a double whammy. It is not the fault of families to be in such bad shape because everything from transport, medical to housing was hiked continuously during the good years making it hard for them to save.

It is very interesting to watch these discussions on TV and they can actually talk for 1-2 hours and miss out on all the key issues affecting Singaporeans most.

Sumiko Tan : Missing out on married life.

There are a few unanswered mysteries in life and one of them is why Sumiko Tan never got married.

"Is there something wrong with me? Is this all there is to life? Why aren't I married? Am I not good enough? Am I not lovable enough? Am I not capable of loving deeply and permanently? Have I been too fussy? Do I have bad karma?" - Sumiko Tan

"Hey may be you scared everyone off being a Straits Times reporter who writes about her intimate experiences...." - Lucky Tan

Anyone knows if Chua Mui Hoong and her sister are married? Or are most of Straits Times women single?


Feeling half a woman
Am I less of a woman because I am not a mother and a wife? I sometimes feel that way
By Sumiko Tan

I always feel a bit awkward when I bump into friends with their children in tow. I don't quite know how to behave with the kids. I tend to either overdo the 'oh what a cute/handsome/pretty son/daughter you have' routine or swing the other way and ignore the child completely. I was at a mall one Sunday when I was struck by a handsome little boy walking towards me. He was about eight and had brown hair and startlingly light-blue eyes. I glanced to his side and discovered that I knew the woman who was with him. It was a friend from way back whom I'd lost touch with. We chatted a bit, all the while with me marvelling at how cute her son was. In this instance, he really is an exceptionally good-looking boy so I wasn't lying or exaggerating, but I wonder how much of my gushy chatter was also due to a bit of nerves. I've realised that I don't really know how to behave around children. As someone who has never been a mother and with the only children in my life (my niece and nephew) living in another country, I am unfamiliar with young people and so find myself acting unnaturally in their presence. I lack the instincts that parenthood brings. To use an analogy which I hope won't offend animal-hating parents: Because I love dogs and have had so many, I'm at home with them. Whenever I see a dog, I am drawn to it and know what to do - when to pat it and when not to, how it likes to be tickled a certain way, and I'll think nothing of flicking away the bits of eye dirt on the face of a stranger's dog. It's a different matter with children. No, this is not another column about feeling broody and wishing I had children. I'm so over that. But it occurred to me that because I've never given birth - and never ever will - my life experiences have been very different from those of the majority of women who are mothers. And because I have also never been a wife - and probably never would - I have not experienced the things that 'normal' women go through. Am I less of a woman because of that? I sometimes feel so. Take the friend I saw at the mall. The last time we met a decade ago, she was single, like me. In the interim, she had not only got married but had also begotten several children. My mind boggles at how eventful her life must have been in the past 10 years - meeting her life partner, preparing to get married, setting up a home, adapting to being a wife, going through pregnancy and then coping with motherhood. While all this is alien to me, it's what 'normal' women go through; marriage and parenthood are part of the natural circle of life. My life, on the other hand, has been unnaturally arrested. The cares and concerns I faced in my 30s were not that much different from those when I was in my 20s, and now that I'm in my 40s, not that much has changed either. I'm not complaining. As I've often said, there are loads of things to cheer about in being single. But as age beckons and maybe because I'm no longer so footloose and fancy free, I'm also beginning to wonder if I've missed out on the experiences that most women go through, and if I am less complete as a person because of it. I feel a twinge of this when my sister regales me with tales of her children. She has an especially good connection with her son, who's five, and was raving to me recently about how chivalrous he is. They were out on a nature walk and the boy took it upon himself to clear the path for her; he ran ahead to lift the brambles so that she could walk along unobstructed. Ever so often he'd also stop and shout: 'Mama, are you okay?' How sweet, I told my sister, and thought to myself that, well, that's something I'll never get to experience, the unconditional love of a boy. It's not that I envy her - or any parent - their children, no, not at all. But in my idle moments I am curious: What would my life have been like had I been one too? More fulfilled? Less self-centred? Frazzled? It's the same with not being a wife. Again, it's not that I look on enviously at couples. I really don't. I'm happy with my life. But once in a while, it hits me that maybe there's something wrong with me. It doesn't matter how I love my single life. It doesn't matter that I have all the personal space in the world. It doesn't matter what I've achieved in my career. It doesn't matter how I know it's better to be alone than to be alone in a marriage. It doesn't matter that I've seen how marriage isn't a binding contract or a guarantee of a happy-ever-after. It doesn't matter how many boyfriends I've had or might have. It doesn't matter if there are men who care for my well-being. The fact remains that I am not married, and I say this not in a self-pitying way but as an acknowledgment of a, to me, puzzling fact. And the fact remains that no one has been mad enough about me - and I for him - for us to embark on a journey together. The fact remains that no matter how fun singlehood is, there are nights when I lie in my nice big bed all by my lonesome self (well, actually my dog sleeps with me), and think: Is there something wrong with me? Is this all there is to life? Why aren't I married? Am I not good enough? Am I not lovable enough? Am I not capable of loving deeply and permanently? Have I been too fussy? Do I have bad karma? Don't I deserve more? My mother was married, my sister is married, Michelle Obama is married, the woman who cleans the office pantry is married, so many 'normal' women are married, why not me? Have I failed as a woman? Am I inadequate? Have I become nothing more than a 'singles' statistic? But, ah well, these feelings come but mostly these feelings go. If this is meant to be the script of my life, then why bother trying to rewrite it? It is often said that life is what you make of it, so I shall be thankful for what I have rather than what it could have, should have, would have been. The alternative could in fact have been worse.

Wednesday, January 28, 2009

Obama the keropok eating champion....

Fascinating tales about Obama uncovered by Singapore New Paper reporters...

Our team visits the Indonesian suburb where US President Barack Obama spent part of his childhood
January 28, 2009

GENDUT loved his keropok. He even won a keropok eating contest.
Gendut or 'chubby' is now known all over the world as US president Barack Obama.
His former teacher, Mr Effendi S P D, 64, told The New Paper at his house in Jakarta that Mr Obama was the biggest boy in his class. Mr Obama lived in Indonesia with his mother Ann Dunham and step-father Lolo Soetoro from 1967 to 1971.

Mr Effendi said: 'Barry stood out of course. He was the only African student at the time, had curly hair and he had a ready smile for anyone.'
Mr Obama was 6 when he moved to Jakarta and he joined international school Besuki SDN Menteng, where Mr Effendi taught, in 1970.
The teacher said Mr Obama, who is now famously trim, had a good sense of humour and took the teasing about his weight in a good way. 'Yes, the students teased him and called him 'gendut' but he wasn't upset or anything like that,' said Mr Effendi.
He showed us a photograph of a group of students, including Mr Obama, taken in the garden of classmate Hedi Surya's house.
'I was told they played several games at this classmate's house,' Mr Effendi said.
Childhood games
'They played marbles and caught fish in the pond.
'And Barry took part in a keropok eating contest. The keropok was hanging from a string and they had to eat as many as they could, and he won.'
Mr Effendi said Barry also used to buy keropok from the school canteen.
The retired teacher chortled with laughter as he recalled Barry's pranks. Said the grandfather of three in Bahasa Indonesia: 'Barry would sit at the back. He had two classmates, girls, who sat in the front.
'He was always teasing people. I remember, once, he used his pencil and poked them jokingly.'
Barry came in to his class a month late, in February 1970 because he had transferred from the Catholic elementary school St Francis Assisi. By then, he spoke fluent Bahasa Indonesia, said Mr Effendi.
The teacher, whom he called 'Pak Guru', said he was a sociable student who would always be the first to say hi to anyone.
He remembered one incident during a Scouts camp. Mr Obama, who had joined the Scouts, was camping in school with many other children.
He was given the task of cooking fried rice one day, but left the pan on the stove for a short time while he played. When they next checked the pan, the fried rice had already been burnt.
Laughing at this, Mr Effendi said: 'The poor boys had to eat the burnt rice. We were trying to teach them to be independent, but they were good boys and learnt from the incident and were more careful the next time.'
At the Besuki school, Mr Obama's former classmate Sonni Gondokusomo, 47, showed us where Barry used to sit. Mr Sonni, a lawyer, said Mr Obama was good at playing football and marbles, and loved rounders too.
Said Mr Sonni: 'We were playful and we'd throw the balls at him and he would be able to take it.
'He was a cool friend.'
Mr Effendi, was quick to add that Barry was a 'well-behaved' student who was seldom punished .
He said: 'He was one of those students who liked to ask a lot of questions. Anything he didn't understand, he would make sure he asked till he did.'
Geography lessons
'Once I remembered in geography class, Barry asked 'Does Jakarta have a palace and why does a president live in a place like a palace?'
'So I quickly answered that the president, as our head of state, is treated like a king, and so that's why the president lives in a palace.
'And you know, he seemed in awe. Of course, he had many other questions and I tried answering as many of them as I could.'
Barry was the top student in geography, his favourite subject. Overall, he was among the top five in class.
Said Mr Effendi: 'He also took drawing lessons and I noticed that he loved drawing super-heroes like Batman and Robin. He especially loved Superman.'
Mr Sonni recalled Mr Obama's keen interest in poor people. He said: 'He always asked 'Sonni, how come there's so many poor people? Who's helping them? How do they live?'
'That was one reason why he joined the scouts. He was very interested in doing social work.'
He said Mr Obama ate like them. 'He did not seem to be bothered about Indonesian food and he ate using his hands, like us, when we were in the canteen. He loved his nasi uduk too.'
Mr Effendi, had not seen Mr Obama for decades but recognised him instantly when he saw him on television during the election campaign.
He said: 'The moment he smiled and laughed, I knew it was Barry. I'd recognise that laughter anywhere. It has not changed.'
These Indonesians who knew him are convinced he can be a president who is well-informed about world affairs because he lived among them and learnt about other religions.
Said Mr Effendi: 'I was among the many praying for his win. I think he makes a good leader as he was exposed to many cultures and many types of people.
'My wish is for him to try to get people to understand each other and create more peace in the world.

'I have faith Barry can do it.'

Tuesday, January 27, 2009

State of the Economy.......

Our wise man first said that we were in a Golden Period. Then when the crisis struck, he said that in Feb 2008 Asia won't be badly hit as China and India continue to grow. Yesterday his latest forecast for the economy is that we are in a recession that may last 2-3 years . A few iterations and he might have gotten it right. He did slowly go from Golden Period optimism to the recession pessimism....

"The first and most important thrust in the Resilience Package is jobs for Singaporeans. We will introduce a Jobs Credit scheme to help employers to keep their workers. We will also strengthen our subsidies for training and provide additional support for lower-income workers who face a reduction in pay during the downturn. Finally, the Government will also expand recruitment across ministries and statutory boards, for all levels of employees, and including mid-career professionals" - Singapore Budget 2009 Statement.

There are things we already know have happened and will happen. There has been a demand collapse and job losses will come. Just scanning through public announcements of companies, you can tell there will be massive job losses. Even Microsoft is retrenching - can you imagine that? Microsoft is not short of cash, it is not short of innovative ideas for expanding its business yet the fall in demand is so bad it will retrench thousands of employees around the world for the 1st time since Bill Gates started the company decades ago. The newspapers keep drilling home the message that the job credit will save jobs. It may save some jobs but it is also giving money to many companies that don't need it. For example, the SMRT declared record profits them cash is not going to encourage them to hire another driver for each train. No doubt the job credit will have a positive impact on the economy but it is not going to come close to solving the joblessness problem. The govt can create jobs by recruiting more people to its ministries. It is good thing but I wonder how our ministries can recruit more people than it already has or needs ...I guess for defense and security related, the headcount is elastic you can argue that a policeman is needed for every void deck. In fact I was thinking since the govt is so allegic to giving handouts to the jobless, the other way is to put almost every jobless person on its payroll. You get a handout, you're on the govt's payroll and you do something - look for Mat Selamat in Ubin, search for him in MacRitchie....stand at the SMRT station to scan for potential terrorists...or better still sign on to serve in the Navy, Police etc. Judging from those outlandish, surrealistic Navy ads, I think the Navy probably have the hardest time looking for people. Now they can stop making me watch those ridiculous ads because they should be able to recruit people easily:

I'm sure the guy who came up with those ads can find a job in Hollywood easily...if not MediaCorp should hire him.

Going through the analysis from various economists a much clearer picture has emerged on what is going on and some consensus is emerging on what the solution should be:

1. The global economy is in a recession with a high risk of going into a deflationary spiral (falling prices, falling investments, job losses --> lower prices, more job losses).

2. There is a fear that the global economy will go into what Japan did in the 90s (known as the Lost Decade) or the US during the Great Depression.

3. There are 2 schools of thought - the monetarists view and minority Austrian School on what to do next.

4. Bernanke & gang belongs to the monetarist camp believe that these events were caused by the monetary contraction. The approach is to shore up money supply.

5. The Austrian School economists believe that all the bad things we are seeing are caused by credit expansion and the inevitable collapse of this expansion. Their belief is the Fed caused all these problems by interfering with the money supply. The Great Depression was caused by money supply expansion in the 1920s and the current crisis is caused by Greenspan. Their suggestion is to do nothing and take the pain..and get rid of the Fed and stop interfering with the money supply. You see supporters such as Marc Faber (aka Dr. Doom) and Jim Rogers who asked for his govt to allow all the banks to collapse.

Since the Austrian guys are saying doing nothing which is easy but awfully painful, if you want to do something it has to be to shore up the money supply with the monetarist approach. For govts that want to do something, the tips from Lost Decade & Great Depression are:

1. Do what you need to do early. The same measures are less effective if you spread it out. The PIMCO experts say that the global economy just had a heart attack - you want to shock it back to life with a defibillator now. Doing it later is useless because the economy would be dead, you can't revive a dead man.

2. Do not be afraid of doing too much. You can tackle the side effects of doing too much later.

3. Don't do things reactively like the Japanese did.

4. Do everything you can. Shore up the banks. Slash interest rates. Govt spending. Tax cuts. Spare no effort.

The window of time is small and the effort required is huge. The American people gave Obama the mandate to get these big things done fast and he has gone about doing it. However, there are limits to what is politically acceptable and possible. Obama is now pushing a $850B stimulus to be implemented fast. However, based on a number of models, the size of package required to revive the US economy is closer to $2T. $2T is politically impossible to get done....economics being an inexact science the argument can always be made by politicians for doing less. Because of politics, he probably has to split the stimulus doing $860B first.. making it less effective. Doing things slower will mean doing more. As the US economy weakens, the banks' balance sheet will deteriorate further and they will need to do more to shore up the banks some estimate $1T is needed here. Without political will, US will just descend into a firefighting state like the Japanese - you enter a trap a vicious cycle and you just can't get out. This one can be a long one just like what MM Lee said yesterday but a lot depends on what Obama can get done. He seems to understand what is needed but he is hindered by political opponents who operate on ideology or just don't want to see him succeed.

Bad leadership right to the end....

"Why me? Why did the financial collapse have to happen on my watch" - George W. Bush.

This man doesn't understand that he was responsible for the economy as the president. He was suppose to make sure there was sufficient regulation of markets and monitoring. Even if one argues that the whole mess was unexpected, his handling of the situation was highly reactive. From the start of the crisis, he preferred stand was to do nothing and let everything run its course. Initially when the subprime mess emerged, his immediate response was that people should not be bailed out....rather than examing the situation and do what needs to be done to mitigate it. At the critical juncture when Lehman was about to go down, he applied ideology again "no bailout!" he insisted without spending time to understand the implications of Lehman going down - at that time Lehman required $30B to rescue and AIG $30B. The collapse of Lehman set of a chain reaction within days AIG's rescue ballooned to $80B and they had to go to congress for $750B of TARP to bailout the entire system. Most market participants knew that Lehman was highly interconnected and letting it fail could be potentially disastrous.

It was not bad luck that made this guy one of the worst presidents in history. It was bad leadership. He could have done infinitely better if he had just gotten all the facts, listened carefully to expert opinion and their recommendations on what to do.

Monday, January 26, 2009

Obama - leadership from the wilderness....

UPDATE: I have been corrected by a few people who posted comments that Obama does play golf although his favorite game is basketball. America is not land scarce....Singapore is.
In Singapore, we have been told that leaders have to be selected, groomed and paid the highest salaries in the world to be able to lead our small island. They have to spend time with the upper echelons of society and existing leadership to make it to public office. Here is a guy who spent most of his time working to help poor people after his graduation, he didn't become a CEO of a big organisation with turnover of $100M nor is he part of a political dynasty....if he is a Singaporean, his application to run for president will be thrown out by Singapore Presidential Elections Committee because he does not have the required qualifications. He is not even qualified to be the president of our small island but the American people elected him to highest office on this planet at a time when the world is facing its greatest economic crisis in 70 years. Are the Americans CRAZY?!

Among his first acts as president was the freezing of the salaries of his aides ...contrast that to the leader of another country whose first acts were to raise the taxes of his people and hike the pay of his colleagues who already drawing the highest pay in the world. Barak Obama is the diametric opposite of what we have been told is good leadership in Singapore. Obama wasn't the top student of his school or even his class. A diligent Singapore reporter found out that he was the keropok (cracker) eating champion in his school.No Westpoint, no stint as CEO, no grooming....yet he seems to know what to do once he entered office. He chose to spend so much time helping the poor and ordinary people instead of interacting with the elites. In his 1st 100 hours, he did more for the people than Bush's 1st year in office during which Bush was found to spend most of his time on the golf course (video here : Farenheit 911). Golf....that is the game the elites in Singapore have to play to move up the ladder....they probably spend more time on the golf course in one month then they do interacting with the ordinary people in a year (or their lifetime). Golf, to me, symbolises the inequality in our land scarce island. While large plots of land are used for golf courses, poor family are squeezed into rental flats without rooms (they call them 1 room flats because the living room is also where you sleep). Barak Obama does not play golf, it is a favorite game of our leaders and George Bush. Obama plays basketball. I've nothing against businessmen, millionaires and others playing golf ...but what games our leaders choose to be seen playing in some ways represent the ethos and values they believe in....and of all the games they love golf...

Saturday, January 24, 2009

Budget : Where are the safety nets?

The day after the "Resilence Budget" was announce, Straits Times was filled with articles on how it will save jobs and help Singaporeans during the impending hard times. The budget attempts to save jobs by giving companies a wage credit. The govt will subsidize up to 12% of the first $2500 of wages. This was reported as an innovative new idea to save jobs. I figured this is probably a rehash of an old idea - in the 1980s recession, employer's CPF contribution was slashed to lower the wage bills of companies. The lower wage bill helped to save jobs in the 80s recession. This time the govt probably wanted to do the same but cutting CPF is not possible because there is not much left to cut and many depend on it to service their HDB loans. The only way to lower the wage bill was for the govt to subsidize wages. However, this move will not save as many jobs as it did in the 80s. If you recall the 80s recession was caused in part by the loss of competitiveness due to the NWC recommending wages to be increased too quickly, the cut in wages helped Singapore to restore its competitiveness thereby saving jobs. This recession is very different. It is triggered by a massive abrupt collapse of external demand. Wages are not the issue - they are losing jobs by the tens of millions in China where the wages are the lowest in the world. Cutting wages will have a limited impact on retrenchments. Companies need to shed capacity because there is no demand for goods produced- Intel, Nokia, Microsoft, DBS etc etc have decided to cut jobs and these are companies that are still cash rich and competitive. When Lim Swee Say "scolded" DBS for retrenching staff instead of cutting pay, DBS replied that cutting pay is not the answer because certain segments of their business will not be revived for years and they just don't need headcount.

What is going to happen is quite predictable. There will be widespread retrenchments and our unemployment rate will rise because the measures in the budget will have limited impact. A few months ago, Alex Au wrote that it is time for safety nets to be in place. I agree with him completely. These can be removed once the crisis is over and jobs are plentiful again. A survey done recently showed that 30% of Singaporeans are worried about retrenchments ...they believe they will be retrenched. The last time something so abrupt happened was during the Asian Crisis. People simply queue up around the block at the MP office to seek help because they don't know what to do when they become desperate. The MP had to decide what help to give on the spot. It is all very unsystematic and haphazard. Its the worst way to dispense help. This is a crisis people need to clear about where to seek help, how they will qualify for help and what help is given so they can at least plan when the situation deteriorates. Many Singaporeans will become jobless through no fault of their own and many have no savings because of the rising cost of living made it difficult for them to save. We will face a problem for which the budget offers no solution.

I have long thought there will be a serious situation which will cause the PAP govt to overcome its aversion to giving help to Singaporeans when they really need it. When the crisis came, I thought "this is it"...they will have to do it. Afterall, Singaporeans contributed to the massive reserves which are meant for rainy days. The crisis we are seeing is a once in a lifetime event....for once in our life, our govt has a chance to lift you up when you go down. But the PAP helped to recapitalise Western banks with our reserves instead. There was no scrutiny when tens of billions are lost in those banks but when it comes to helping Singaporeans directly with the reserves the PAP just can't do it. Our PM recently brought up his fear of Singaporeans cultivating a sense of entitlement and dependency when the govt gives help - that is why there is no direct help for Singaporeans?! It is like not sending the fire fighters when someone's home is getting burnt because you think that the people will abuse the fire engines by not taking measures to prevent fires in their own homes. But this time someone threw a lighted match into our backyard, it is global systemic crisis and ordinary Singaporeans will get into trouble through no fault of their own. This is not a time to teach your citizens lessons about being self reliant or worry about entitlement mentality. The last time our PM was very was about he and his minister colleagues being not paid enough and he fought hard for the pay he believed they were entitled to. Isn't it time to worry about jobless Singaporeans who cannot afford the basic necessities? ....When will he fight for us?

Wednesday, January 21, 2009

PAP's economic policies comes to bear....

We were told that foreigners are here to create jobs for Singaporeans. Now that they are leaving en masse what is going to happen?

Last quarter GDP growth was an annualised -16.9%[Link]. I don't remember seeing a number this bad anywhere in the world.
From Times Online
January 21, 2009
Singapore faces devastating exodus of foreigners
Leo Lewis, Asia Business Correspondent

Singapore faces an exodus of 200,000 foreigners as the financial services and manufacturing industries scythe through their workforces and the city-state grinds towards the worst recession in its 43-year history.
The expected exodus, predict analysts at Credit Suisse, could see the number of people living in the tiny but economically powerful island shrink more than 3 per cent to just 4.68 million by 2010 in a shift that would severely undermine the government’s 22-year efforts to boost the population through immigration.
A broad rule of thumb, said analysts at UBS in Singapore, is that nearly every new job created over the last few years went to a foreigner. The economic policies of the city state have overtly relied on its ability to attract talent and skills from abroad.
The departure of thousands of ex-pat bankers, lawyers and accountants between now and 2010 is expected to lead a secondary exodus of manufacturing, construction and service sector foreign workers.

Job losses will hit Singapore hard, said Credit Suisse economist Cem Karacadag, “because they affect more highly paid workers and could result in a semi-permanent drip in the population”. He added that the potential drop “would have far-reaching implications for the economy” including a possible sharp contraction in private consumption.
The knock-on effects of a Singapore exodus, some real estate analysts believe, could also see property prices fall by as much as 30 per cent from their current levels.
Credit Suisse’s grim population forecast comes amid warnings that among non-Japan Asian countries, Singapore’s open economy may be hit hardest by the global downturn. Consumption growth, said the report, could fall to almost zero.
Analysts at believe that the country’s GDP may contract by 2.8 per cent in 2009 as rising unemployment hammers domestic growth and the collapse of consumer confidence around the world hits exports.
Mr Karacadag raised a further red flag for Singapore’s economy by warning that there was a risk that forecasts were still underestimating the effects of a broad Asian downturn and further terrible news from the financial sector.
Singapore – the world’s busiest port by tonnage handled and the home of some of the world’s largest shipping companies - is already feeling the pain of an alarming slump in global trade.
With the credit crunch still affecting trade finance and the demand for Asian manufactured goods in acute decline, hundreds of container and dry-bulk ships now sit unneeded and at anchor outside Singapore. The stagnation, say brokers, is matched onshore.
In tandem with the warnings over a possible population crunch, concerns are growing among investors over the health of Singapore’s domestic banks. The “benign asset quality” environment in which Singapore banks have thrived, say analysts, has now reached an inflection point.
The ratio of non- performing loans is expected to rise sharply as the construction boom that has filled the Singapore skyline with towers and cranes begins to deflate.
Between 2003 and 2008, the population of the city state soared nearly 18 per cent in an increase driven predominantly by foreigners hired to meet Singapore’s endemic shortage of workers during the good times.
When global trade, investment banking and Asian stock markets were booming, Singapore successfully fashioned itself as a financial hub to rival Tokyo and Hong Kong and the expatriates flooded in – around 200,000 jobs were created in the financial and business services sector over the last four years.
A large number of jobs are expected to be lost in manufacturing, which accounts for about a quarter of Singapore’s GDP.

COE Price Collapse...ahead of CNY

Just a sign of the times.

A Car (1600cc & below) &Taxi $2,693 vs $5000 (last month)
B Car (Above 1600 cc) $200 vs $3089
C Goods Vehicle & Bus $2,900 vs $3500
D Motorcycle $900 vs $1000
E Open $3,000 vs $5701.

There has been a demand collapse and talking to friends from various industries, I gather that the economy has can be described has having fallen off the cliff...or had a heart attack. I'll give my thoughts on the economy tomorrow.

Empathy for Tan Yong Soon....

I applaud the numerous netizens who have stepped forward to show support for Mr. Tan[Link]. A number have worked with him and described him as affable, professional and humble. I wrote yesterday that Peter Ho and Teo Chee Hean's expectations for top civil servants were unrealistic and unfair. Some people might have felt better if Mr. Tan had kept his trip secret but does that change anything for you?...However, netizens cannot be blamed for the emotional outburst - that too has a logic if we look back in time.....

In the 80s, a whole generation of people was elevated from poverty. They went from being kampung dwellers without clean water, sanitation and electricity to be HDB dwellers. When I was a boy I did my business in a longkang (drain) and let the water wash away the produce. The drain was far better than the stinking jambans (wooden toilets) that had no flushing system. Moving to a HDB flat (bought for $40K) was considered a luxury...and to be able to flush away the stuff by pulling a handle was a miracle. While the wages were lower at that time, medical care, transport and housing were all affordable. ...and people were able retire at age 55. We were told our civil servants were excellent and all of us believe it. they were the architect of the miracle. When you go to the toilet and pulled that handle it reminded you of how much things had improved. When a vigorous young Goh Chok Tong ran for PM, he made a bold promise that we will all be eating Swiss fondue in a few years. It was a promise that cannot be fulfiled but few blamed the likeable Goh as external factors can be seen to be responsible for the broken promise. Things started to change 10-15 yrs ago, when the interests of the govt and the people diverge. Elitism started to take root in govt and combined with their interests in GLCs they pursued policies that did not benefit a large segment of the population. The income gap grew as the PAP govt hike its own pay and that of its top civil servants to a level that people in other countries think is a joke when you tell them. All this while poverty started to just have to open your eyes to see it, from the aged cleaner to the old man digging dustbins for aluminium cans. ..and you see it when the economy was supposed to be booming in 2007. The PAP implemented policies that hurt the ordinary Singaporeans - high prices of HDB flats, opening the floodgates to foreign workers just for the extra % points of GDP growth causing structural unemployment, hiking the GST to cut corporate tax when profits as a % of GDP was at an all time high. ...all this while ordinary Singaporeans were hurting badly. The straw that broken camel's back was the pay hikes for the ministers ....they elevated themselves to god-like creatures without which the country will sink to justify those hikes.

There is a reason why people are very angry and it has little to do with Tan Yong Soon learning French cooking...that article was just a spark that lit a fire. There is still plenty of firewood left for many fires to come.

Tuesday, January 20, 2009

Don't be harsh on Tan Yong Soon....

Did you notice that I don't have a single article on our most famous French chef cum civil servant on my blog? I believe Tan Yong Soon is not to be blamed. He is after all just a product of the system.
Singaporeans please be understanding. Tan Yong Soon and our top civil servants make about $1.54M a year (after the pay cut!). $46.5K for a vacation is merely 3% of his salary or just a fraction of the interest on his savings account. The misunderstanding is the other way round - Singaporeans should have a sense of proportion and be more understanding why Mr. Tan cannot possibly comprehend that you find his vacation so extravagant because it is not extravagant at all to him.

".... My colleagues and I feel very bad about this episode, because it stands in contrast to the values and ethos of the service. " - Peter Ho, Head of Civil Service
"Gee...ethos and values? Tan Yong Soon has merely exposed the truth about our civil service!"
- Lucky Tan.
At about the same time I received my "A" Levels exam results, I received a pile of scholarship applications form from various govt bodies. I took the whole pile and threw them into the waste paper basket. I wasn't sure what I've done to deserve one of these scholarships and what I'll being signing away if I accepted them. I did pay a heavy price ..... I had to take up a loan to pay for my school fees and gave tuition on weekends to earn an allowance so that I didn't have to burden ageing parents. So while my friends on overseas scholarships were enjoying skiing lessons on weekends, I travelled all over the island to give tuition to primary and secondary school kids. No hard was a decision I made and I accepted the outcome. A few months ago one of my cousins called up and told me that he had won a scholarship to study in London, he asked me if I can be his guarantor. I agreed and having supported myself through university, I thought it would be a good idea for him to have a "easier life". I arranged to meet him at the scholarship office to sign the documents. When I got there, the walls of the office was filled with posters of smiling scholars diving, skiing, ...and experiencing the good life around the world. I sat down and the public servant did an outstanding job of explaining the T&Cs of the document I was signing. However, when it came to the bond quantum, I almost had a heart attack - the amount I was asked to guarantee was just short of 7 figures (one reason was my cousin has been with the organisation for a few years and will receive full salary while he is studying). I had a chat with my cousin afterwards and among other things make him promise not to break his bond and get me into trouble.
You see the starting point of our top civil servants are all the same - fully paid education with generous allowance even before they put in a single day of work. After that a well paid recession proof job - they can afford a car and say goodbye to public transport the day they start their working life. If they are as successful Tan Yong Soon and climb the ladder in this elitist system all the way to the top, the pay is $1.5M....entitlements aplenty - free medical care, pension etc. We cannot blame Tan Yong Soon for the lack of empathy because it is impossible for him to understand the struggles of ordinary Singaporeans. He cannot possibly understand what it is like to stay up at night to worry about mortgage payments or having your electricity cut off because you can't pay for your electricity bills. Peter Ho and Teo Chee Hean are completely wrong to expect humility, the "ethos and values of the service" when the entire system breeds nothing but a oversized sense of entitlement and importance. When the civil service pay for top civil servants was hiked to astronomical levels, we are told that they are men of rare talents and their leadership is a scarce is only scarce because of the elitist system in place that narrows the selection of good men...with rigid beliefs about what makes a man a good public servant. What is so difficult about about the formulation of public policy? The ordinary citizen cannot understand the tradeoffs and what is good for himself?
What will bring about the empathy, humility, ethos and values are the things the PAP govt continue to resist - the freedom for ordinary men to express their views and demands democratically. The freedom of ordinary citizens to access that there will be accountability, transparency and competition of ideas. Many of us don't understand why Tan Yong Soon deserves his $1+M salary ...we also don't understand why our leaders are paid so much higher than those of all other countries. But it is not Mr. Tan's fault that he paid whatever he is paid, he is just part of a system ....a system that the PAP govt wants to preserve.
."Maybe it made lesser mortals envious and they thought maybe he was a bit boastful. Would people have taken offence if his wife (a senior investment counsellor at a bank) had paid for everything ?” - Charles Chong
Teo Chee Hean and Peter Ho expressed great disappoint over Mr. Tan's article. This will encourage all the other govt mandarins to keep their extravagant ways secret.....yes, the ordinary citizens can feel better once they do not know. In the words of Charles Chong, the fault lies with us lesser mortals who became envious of Mr. Tan. His only mistake was to let us know what we don't....and the solution is for top civil servants to keep their secrets and keep the people in the dark and that is suppose to lead to great respect for our top civil servants.

Today George Soros on the economic crisis....

Before you read what Soros has to say today. Listen to what he said in June 2006...

Prophetic isn't it? If you have not read his book Crisis of Global Capitalism, you should, to understand globalisation and the current crisis (here is a synopsis of his book [Link] for those who don't have the time).

Here's what George Soros said yesterday and it gives a sense of the magnitude of this crisis:


U.S. stimulus not enough, TARP bailout misused: Soros 2 hrs 5 mins ago

WASHINGTON (Reuters) – The stimulus plan the U.S. government is currently considering is necessary to help American citizens, but it will likely not reverse the country's economic decline, hedge fund manager and billionaire philanthropist George Soros said on Monday. "It is not enough to turn the situation around," Soros told the U.S. Conference of Mayors about the $850 billion proposal to increase spending and cut taxes. The plan, which was introduced in the U.S. House of Representatives last week and will likely be passed by next month, will help state and local governments balance their budgets and preserve important social services, Soros said. At the same time, the $700 billion financial bailout known as TARP for Troubled Assets Relief Program had been carried out in a "haphazard and capricious way" and "without proper planning," he said. "Unfortunately it was misused and the way it was done has poisoned the well. It has created tremendous ill will toward putting up more money," Soros said. For more than a year, the United States has been crippled by a recession that was triggered by a housing market downturn. Last summer, financial institutions with exposures to securities backed by bad mortgages began to buckle. The government stepped in with the TARP to inject liquidity into struggling firms. Last week, President-elect Barack Obama requested Congress release the second half of the funds. Soros advocated using bailout money to recapitalize banks, but said the $350 billion would not be enough. He said such a move would take more than the entire $700 billion. The bursting housing bubble "acted like a detonator that exploded a much larger bubble," he said. "The economies of the world are falling off a cliff. This is a situation that is comparable to the 1930s. And once you recognize it, you have to recognize the size of the problem is much bigger," he said. Soros said the United States needed "radical and unorthodox policy measures" to prevent a repeat of the Great Depression of the early 20th century that include recapitalizing banks and writing down the country's accumulated debt. Also, he said, it should create more money to offset the collapse of credit and then rapidly pull that cash out of the system when inflation emerges. The government would have to be very nimble in the timing of such moves, he said. "If they are successful...the deflationary pressures will be replaced by the specter of inflation and the authorities will have to drain the excess money from the economy almost as quickly as they pumped it in. Of the two operations the second one is going to be, politically, even more difficult than the first," he said.

Monday, January 19, 2009

Time to stop predatory lending....and miscellaneous thoughts...

LATEST UPDATE: US Congress acts against abusive lending [Link]
Very interesting news over the weekend about how our esteemed govt is tightening laws on protests to prevent any harm to our society. Although countries like S. Korea, Malaysia and many around the world have allowed protests without seeing any violence, Singapore has chosen to pre-emptively enact laws because our extraordinary govt is extremely concerned about our well being. It is because our govt is so extraordinary in caring for us that I urge them to do something for the ordinary people of Singapore - something they might have is time to stop predatory lending!

If you're familiar with the work of Harvard Professor Elizabeth Warren (she does very interesting work look her up on the web), allowing banks to charge beyond 20% in credit card interest rates will lead to something known as predatory lending. Banks will be willind to lend to people who will struggle to pay and will impose hefty fees for late payments. This will eventually lead to a debt trap in which a large number of people in the population struggle to service their loan. The harm to society is great....yet our govt is more concerned about imposing laws to repress protests because it hurts them politically instead doing what is good for Singaporeans. Rollover credit card debt has increased to record levels as Singaporeans borrow to cover their household expenses in this recession. Our banks have learnt "American style" predatory banking by imposing all sorts of fees, charges etc on unsecured loan causing fees, interest, charges to go up to near 30% per annum.

The Malaysian govt and many around the world have recognised this harmful trend 3 years ago and has limited interest chargeable to 15% [Link]. Studies have shown that at around this level predatory lending can be curbed. Predatory lending has caused plenty of harm to people, society and economies (just look at what happened in US, UK) yet nothing has been done about it in Singapore. However, every single major positive transformation in society (women's rights, racial equality, etc) has been brought about by protests yet the PAP govt introduces more laws to curb it. They tell us it is for our own good to prevent social disorder.....but we know why they did it. 3-4 powerless protestors caused plenty of embarassment to the PAP when the IMF & World Bank came here a year ago and that was enough for them to introduce new legislation ahead of the APAC meeting ...yet for the hundreds of thousands of Singaporeans struggling as a result of predatory lending nothing is done. The Malaysian govt may be accused of corruption, cronyism, and incompetence but even when they lost elections, they never resorted to curbing protests...and whatever it is, they got these 2 things done right.

Over the weekend I met up with quite a few friends and the lack of sympathy for MP Seng was quite shocking even for me. I believe nobody deserved the harm done to MP Seng-his family must be in great pain. I wish his family well. The lack of sympathy among Singaporeans reflects a shift that has taken place in our society that makes the words of our PM ring hollow among Singaporeans - "Staying together, moving ahead", "We are in this together"....never has the govt and the people drifted further apart. Some people are saying why should there be sympathy for the MP when there was none when Singaporeans who couldn't afford their bill had the electricity cut off, struggling famillies are asked to pay for neverending price hikes imposed by govt bodies and govt linked companies. The lack of sympathy goes both ways.

Today, I was greeted by this big Straits Times headline "Govt MAY tap reserves" about the govt dipping into reserves to limit the downside for the economy 1 or 2...maybe $5 billion. It talks about the govt needing to be VERY VERY careful to dip into reserves to help Singaporeans. I was wondering why we even bother to debate this when we had no debates about giving tens of billions to trouble western banks and losing a substantial part of our reserves on risky investments .....why they are so disproportionately careful when it comes to helping Singaporeans when they can just dump billions into those Western banks and Shin Corp without any check and balance. There is an urgent need for reform here and it will never come as long as the PAP maintain this elitist system ...the GIC and Temasek is a source of high paying jobs for many of these elites and our leaders will try to preserve the lack of accountability and transparency to serve their own interests.


Look at credit-card interest rates

MOST credit-card companies charge 2 per cent on rollover balance on a daily basis, if card holders do not pay the full amount on due date.
One intriguing piece of legislation I wish to draw attention to is the Moneylenders' Act.
The Act was passed to protect common people from unscrupulous moneylenders or loan sharks. The maximum interest rate a legal moneylender can charge a borrower on an unsecured loan is 18 per cent. And for only $1, the debtor can request a statement of his loan.
It is not the same with credit-card companies. Card holders have to pay a higher fee to print an old statement, if they lose their copy.
Credit-card companies also make a spread if card holders buy goods in foreign currencies. That spread is not favourable to card holders compared to the over-counter rate.
While moneylenders and credit-card companies are different service providers, they both primarily provide a credit service to the public. Of course, one difference of credit cards is that they are also convenient to use.
I applaud the recent decision by lawmakers in the United States to scrutinise credit-card companies on their interest rate charging practices.
Singapore lawmakers should also look at how credit-card companies charge their customers for card usage and the maximum interest payable. That goes for unsecured lines of credit.
Do remember to look closely at the fine-print terms and conditions on your credit cards and lines of credit. You may be in for a shock if you forget to pay on time.
Felix Ng

Saturday, January 17, 2009

Not much left for Citigroup shareholders...

Our GIC is one of them....

Citigroup’s Pandit Tries to Save the Little That’s Left to Lose
By Bradley Keoun and Josh Fineman
Jan. 17 (Bloomberg) -- Citigroup Inc. shareholders aren’t buying Vikram Pandit’s attempt to salvage the bank by splitting it in two. Nor are they buying the stock.
Citigroup shares tumbled to a 16-year low on Jan. 16 after Pandit, the U.S. bank’s 52-year-old chief executive officer, said he would undo a decade of acquisitions by separating the bank into two units, Citicorp and Citi Holdings.
The problem: Nothing -- not $45 billion of U.S. government funds, not federal guarantees on $301 billion of debt, not a pledge to dump non-core assets -- can stave off the worst financial crisis since the Great Depression. Already crippled by trading losses on mortgage bonds, the bank faces credit-card losses that surged to a record in the fourth quarter.
“The losses from the investment banking businesses wiped out any margin for error that Citi might have had to be able to weather the storm of the U.S. consumer defaulting on his debts,” said James Ellman, president of San Francisco-based money manager Seacliff Capital LLC.
After initially rallying 17 percent yesterday on news of Pandit’s planned reorganization, Citigroup shares fell, closing down almost 9 percent at $3.50. At that level, it’s below the $3.77 it dropped to on Nov. 21, when the bank entered talks with officials from the U.S. Treasury Department and Federal Reserve over a second round of rescue funds.
Citigroup Chief Financial Officer Gary Crittenden said In an interview yesterday that the bank has had “no conversations at all about additional capital from the government.”
Deposits Stay Steady
Analysts aren’t speculating -- as they were in November -- that nervous depositors might pull out their savings and erode the money Citigroup uses to fund its operations. Total deposits stood at $774 billion at the end of December, little changed from the end of September, Citigroup said.
The government’s $52 billion of preferred stock in Citigroup provides a cushion for depositors, who would stand to get paid off before the government in an insolvency. Common shareholders, whose interests are junior to the government’s, don’t get the same comfort.
Tangible common equity, a measure of a company’s net worth that excludes “intangible” accounting entries such as goodwill, fell by $3 to $5.40 a share in the fourth quarter, Deutsche Bank analyst Michael Mayo estimated in a report.
‘Lowest in Industry’
In dollar terms, there’s $28.9 billion of tangible common equity, or 1.5 percent of total assets, according to Citigroup. The ratio is “perhaps the lowest in the industry,” Mayo wrote.
“Management needs to sell business units fast, in our view, to build capital before another big quarterly loss emerges,” wrote David Trone, an analyst at Fox-Pitt Kelton Cochran Caronia Waller.
Relief isn’t in sight. North American credit-card losses, as a percentage of total loans, climbed to 8.04 percent in the fourth quarter from a third-quarter rate of 7.13 percent, the bank said. During the early 1990s recession, the losses peaked at 6.44 percent.
“Given current estimates of rising unemployment into late 2009 or early 2010, we could expect to see the cards” loss rate continue to rise, Crittenden said yesterday on a conference call.
Crittenden said in the interview that the bank’s plan to hive off about $850 billion, or about 45 percent of total assets, won’t immediately add to equity. The main benefit is to “provide strategic clarity and managerial clarity,” Pandit said on the conference call.
Among the businesses being moved into the “non-core category of Citi Holdings are the CitiFinancial consumer-lending business and Primerica Financial Services life-insurance unit. The company’s core businesses, to be grouped under Citicorp, will include branch banking, corporate lending, transaction processing and securities underwriting and handling trades for clients.
Every time Pandit sells a business -- such as its German retail banking operations, which were sold in December for a $4 billion gain -- he has to forfeit the revenue that goes with it. In the fourth quarter, Citigroup got $582 million of profit from discontinued operations, not including the one-time gains from selling them. The figure dwarfs the $29 million earned by the bank’s only profitable division, global wealth management.
“Splitting Citigroup into two separate subsidiaries doesn’t change Citi’s business model,” said Roy Smith, a former Goldman Sachs Group Inc. partner who’s now a finance professor at New York University’s Stern School of Business. The plan merely “moves the peripheral business into a separate place.”
‘Stop the Bleeding’
For the U.S. government, Pandit’s mission to save Citigroup carries urgency. The Treasury and Federal Reserve said in a joint statement in November that it had to prop up the bank to “strengthen the financial system and protect U.S. taxpayers and the U.S. economy.” The company also has 323,000 employees, to whom Pandit said yesterday in a memo that the new organization will “enable us to sharpen our focus.”
Another round of government intervention would probably take the form of an American International Group Inc.-style nationalization, NYU’s Smith said. Pandit and board members probably would lose their jobs and the government would try to “stop the bleeding without too much regard for saving the business model or future shareholder value for that matter,” he said.
Citigroup has racked up $28.5 billion of net losses over the past five quarters, or an average of $5.7 billion per quarter. At that rate, the bank’s tangible common equity won’t last long.
“The next six months will determine if there is anything left,” said Smith Asset Management CEO Bill Smith, who has repeatedly called for a breakup.
With the stock at $3.50, there’s little left to lose.
To contact the reporters on this story: Bradley Keoun in New York at; Josh Fineman in New York at Last Updated: January 17, 2009 00:01 EST

Friday, January 16, 2009

Structured Products : 54% of investors to be compensated!!!

If most of the people get more than 50% of their money back without lawsuits filed against the banks, I say the MAS deserves a pat on the back.

It is not clear from the report how much these people will be compensated.

For Singapore to be a successful financial hub, protection of investors is paramount. If the banks act against the interest of investors, they have to be punished to send a strong signal. The banks might lose some money when they pay out the compensation but what is important is reputation - lose money, don't ever lose reputation.

Digress a little....

DBS recently allowed those with home loans to pay only the interest on their loans to help those struggling with mortgages - it is a good move .....I hope more banks follow given the extraordinary times we are in. I hope MAS is proactive in tackling this home loan issue. Looking at what happened in US, it is important for govt to step in early to prevent an avalanche and vicuous cycle of loan defaults, foreclosures falling prices, negative equity and more defaults. In the "interest only" scheme, a $500K loan can be serviced with $1400 per month. This will allow those who are temporarily distressed to hang on longer with limited savings until they can find another job or sell off their homes in an orderly fashion.

It is time for banks to seek out win-win arrangements and quickly implement them. MAS should help to coordinate some of these before things get worse.

58% of investors 'missold' Lehman-linked products to be compensated
By Nicholas Fang, Channel NewsAsia Posted: 16 January 2009 1836 hrs

SINGAPORE: More than half of investors who complained they were mis-sold products linked to the collapsed Lehman Brothers are set to be compensated. The Monetary Authority of Singapore (MAS) says the financial institutions who sold the products will inform affected investors of the level of their individual compensation amounts. These could range from partial to full compensation. Over 5,300 complaints were received from investors who bought Lehman Minibonds, DBS High Notes 5 and Merrill Lynch Jubilee Series 3 products. MAS says resolutions have been reached for 5,127 of these cases, including one quarter of investors who bought DBS High Notes and 11 per cent of those who invested in the Merrill Lynch product. The central bank is still working on the details for those who bought the Lehman Minibonds. But 25 per cent of complainants whose cases have been resolved will receive full settlement while 33 per cent will get partial settlement. The financial institutions are in the process of informing investors about the individual outcomes and this is expected to take a few weeks. If individuals are still not happy about the compensation they receive, MAS says they can still turn to the Financial Industry Disputes Resolution Centre for further mediation. - CNA/ir

BREAKING NEWS : Family wins lawsuit!!

Why must there be a lawsuit in the first place?!

Jan 16, 2009, The Straits Times
Breaking News
Family wins suit
By Selina Lum

THE parents of a former full-time national serviceman, comatose for more than three years after an incident in camp, have won their lawsuit against the Defence Ministry. The High Court decision paves the way for the family of Jeremy Tan, now 26, to seek disability compensation and medical benefits from Mindef. On Aug 3, 2005, Mr Tan, then a corporal rostered as duty storeman at Seletar East Camp, was found unconscious at the foot of a building where his bunk was located on the third-level. The ministry classified Mr Tan's injuries as non-service related and stopped paying for his medical treatment at Tan Tock Seng Hospital from March 2007. But Justice Tay Yong Kwang ruled at the end of a four-day hearing that Mr Tan's injuries were 'attributable to service' and he was therefore entitled to a payout. The case hinged on the interpretation of a provision in the Singapore Armed Forces (Pensions) Regulations, which provides for payouts to disabled servicemen. Lawyer Lau Teik Soon, acting for Mr Tan's parents, argued that when he was found with injuries at 6pm, Mr Tan's tour of duty had not ended. But government lawyers argued that even though Mr Tan was performing his national service, he was not doing anything related to his duty at the time. He was not at his place of duty and was last seen resting in his bunk. But Justice Tay said that the words 'attributable to service' can cover injuries caused while a serviceman is on standby duty and was not doing any particular work.

Another insane act...

Gee I guess it is the sign of the times. You cannot set an MP on fire even if you're crazy. ...and you cannot tell MM Lee that you love him by writing on the wall of parliament house. This time the act was committed by another unemployed man - a certain Mr. Koh Chan Meng. I wonder if they become insane before or after they become unemployed. Not sure if this feller is an ex-taxi driver.

It was reported that they sent this person for a psychiatric assessment - I say save the money lah. Anyone crazy enough to vandalise the parliament house has to be out of his mind.
IT WAS not the first time Koh Chan Meng had defaced a wall at Parliament House. . Yesterday, the court heard how prior to being caught red-handed scribbling :“Hi, Harry Lee I love you” on Wednesday, he had allegedly written on it twice before. . The unemployed 47-year-old was slapped with three counts of vandalism, and accused of scribbling on the wall outside Parliament House at North Bridge Road twice on Tuesday and once on Wednesday. . He allegedly wrote :“Go sue me Lee Kuan Yew Go Gavin Son” at about 1.50pm on Tuesday. Later, at 6.35pm, he wrote :“Shammugan can you play your own orgams”. . The following day, at 1.30pm, he wrote :“Hi Harry Lee I love you” and was detained by Cisco guards. . In reply to queries from Today as to why Mr Koh was :not spotted by Parliament guards during the two incidents on the first day, and — since there was a security camera at the spot — if the police had already been alerted to the incident and were already in the process of investigating when he was caught, a police spokesman said it was inappropriate to comment as the matter was now in court. . Mr Koh has been remanded for a psychiatric assessment and will return to court on Jan 29. If convicted, he faces a fine of up to $2,000 and a jail term of up to three years for each charge. He also faces at least three strokes of the cane. ANSLEY NG

Wednesday, January 14, 2009

NS Man collapsed in camp in his uniform....

"Since Mindef's payments ceased in February 2007, his parents have chalked up outstanding hospital bills totalling $133,000 " - Today 13 Jan 2008.
Somehow MINDEF is not responsible.

This reminds me of the issue of insurance for NS men. When I served my NS, I bought some medical insurance and group insurance in case something happened to me. My friend whose mother worked as a washer-woman earning less than a thousand a month said "no way" he would part with the money. The same goes for things like preventive medical care such as bloodtest etc. the PAP must be the only govt in world that expects poor people to starve themselves to finance things like insurance and medical checkups. The argument from the PAP is always the same they don't want to encourage "an entitlement mentality". The people who are entitled to free medical care and check ups are those who can afford it - the ministers and perm secs who spend $46,000 on cooking lessons.....I guess these people have so much money they won't develop an "entitlement mentality".

The Malaysians serve this 3 months chicken feed NS ...but I found out that the Malaysian govt is so paranoid it buys insurance for every one of its NS men for this 3 month period. They have alot to learn from the Singapore govt - they should save all this money ...why waste it on ordinary citizens who have to serve their NS by law anyway when they can use the money to send some of their elites for courses in Harvard.

I'll post my thoughts soon on PM Lee's recent speech where he said that Singaporeans should not get too much help from the govt because it will result in an entitlement mentality.

NSman found unconscious had apologised repeatedly, court told By Leong Wee Keat,

TODAY 13 January 2009 2327 hrs Jeremy Tan's father Tan Kian Lee (R) and mother Hor Hong Kiow (L) have chalked up outstanding hospital bills of S$133,000 for his treatment SINGAPORE: He had seemed "confused" when he returned to his bunk and, according to a platoon mate, Mr Jeremy Tan Chia Whee told them: "I do not know who I am." Twenty minutes after this, at about 6pm, Mr Tan - who was then a full-time national serviceman - was found unconscious on a grass patch outside the block of his third-level bunk at Seletar Camp. More than three years later, Mr Tan is still on the mend. Now 26, he is warded at the Tan Tock Seng Rehabilitation Centre, unable to move or speak, fully dependent on doctors and nurses for his daily needs. His parents are now suing the Ministry of Defence (Mindef) over compensation issues. Mindef has classified Mr Tan's injuries as non-service related injuries, which means he is only compensated on 80 per cent of his ward and meal charges. But Mr Tan's parents claim their son should be entitled to full compensation as he was on duty, and was wearing his army t-shirt, trousers and boots when found. There were apparently no witnesses to what had happened; medical reports said he suffered a head injury consistent with a fall from height. Mr Tan Kian Lee testified yesterday that his son was the duty storeman on Aug 3, 2005, and had been waiting for his replacement, holding on to the store keys when he was found. But Staff Sergeant Wan Chuan Seah - Mr Jeremy Tan's superior - said the general practice was that the duty storeman may return to rest at around 5pm, upon completing his tasks for the day. This was despite the stipulated duty hours for the duty storeman being from 8am to 6pm. Since Mindef's payments ceased in February 2007, his parents have chalked up outstanding hospital bills totalling $133,000 for his upkeep. Yesterday, mother Hor Hong Kiow told the court that manpower officer Linda Quek had told her she would appeal to Mindef to cover Mr Tan's medical fees, as his injuries had occurred in the course of duty. Madam Hor also claimed Major Quek had told her the Singapore Armed Forces would appeal on the family's behalf. Mr Jeremy Tan's sister, Jasmine, provided the court with a transcript of SMSes that he had sent to two servicemen, copied off his mobile phone. In one SMS, Mr Tan reportedly asked a serviceman what time he was coming back to the boat-shed. He also messaged another man, Sergeant Chew Zi Guo, with his apologies. State Counsel Shawn Ho said Sgt Chew, who also spoke to Mr Tan over the phone, would testify that he did not understand why Mr Tan said he blamed himself for everything, apologised repeatedly and cried. The hearing continues.

Tuesday, January 13, 2009

Citibank shrinks...and shrinks....

Here is a CNN report on the incredibly shrinking Citigroup.

A many months ago, in response to a comment on my blog on the book value of Citigroup, I speculated that its book value may end up negative. It took back off balance sheet things like those SIV (Special Investment Vehicles) with alot of mortgage paper roughly $80B worth. It is not clear how much it will lose eventually but it looks like it has to keep selling assets to patch up those losses. Over the weekend, it announced that it was selling its prized assets Smith Barney to Morgan Stanley for $12B. This was seen as a desperate move by Citigroup to sell of high quality assets at this time to raise cash. Everytime it sells something it shrinks and the money raise merely offset losses from rotten assets.

How paper issued on housing loans backed by houses sink by 80%? Investigations show that there was massive fraud involved in the subprime segment. Many homes were inflated by 800%...sometimes 1000%. A person with a home worth $20K had it valued by crooked valuers at $200K, these people took out loans on their homes without any means of paying. The money is gone and the banks are left with homes that are auctioned off at a fraction of the valuation. ...the $200K home may sell at $15K. Even in the non-subprime area, some of the property is now worth 40% less than they were valued. If you take the several trillions lost in mortgage backed paper and the trillion lost in the CDOs following Lehman's collapse. There is quite a few trillion to patch up. That is why the $700B bailout which seemed like a lot of money will come in very short.

Let me digress a little....

There is a very important lesson to be learnt here. Expensive housing that take 20-30 years to pay off is not a very good idea. In Singapore, our public housing is the most expensive in the world and this has been seen as a good thing by the PAP. Even in good times the heavy burden of the housing loan is barely tolerable. ...many backs are broken by this recession and the thing that will do it is high debt due to property. For years and years, citizens have been urging the PAP govt to provide affordable housing that can be serviced without so much strain on the household. The PAP govt refused and often used its favorite argument of a "market subsidy"to justify the cost of HDB flats. However, this is a fallacious argument, the market price of a flat is influenced by the way the flat is financed and the PAP has liberalised the CPF for housing and allow mortgages to be paid over longer and longer periods. They frequently limit supply of rental flats and put rules to prevent Singaporeans from buying smaller flats..... even smaller flats are expensive. This has allowed the PAP to make huge surpluses selling flats to Singaporeans - at the expense of the citizens. This recession will unfortunately show all the flaws of what the PAP has done. Even before we get to the worse point, 8% of HDB mortgages are now in default (> 3 months). The strain on Singapore families is becoming untolerable....and it was all preventable if not for the govt's goal to accumulate billions from the citizens for housing....

Monday, January 12, 2009

Insane act, insane attacker...

Another Update : Someone suggested in the comments that since MP Seng has met the man who asked him to exorcise ghosts, it has to be known to MP Seng that the man is mad and needs treatment....the man ought to be institutionalised because it is obvious he poses a danger to himself and his neighbors. I have to say this is against the principles of the PAP govt. Giving the insane free lodging, food and treatment will result in an entitlement mentality....everyone should work to support themselves for as long as they can breathe even those who are insane.
“The matter of what the reason is and whatever condition the person is in — that is no reason to commit such a crime against anyone, not just an MP. This is a very serious offence, when a person prepares and brings flammable material and goes and burns another person, regardless of whether the victim is an MP or not.” - Minister Wong K.S.
"But Sir, the law was changed so that people can be jailed for 20 years if they attack MP. If an ordinary person is attacked, the punishment is not the same" - Lucky Tan

MP Seng Han Thong was the unfortunate victim of a vicious attack by one of his constituents. This is the second time he has been attacked while performing his duty as an MP.

I would like to wish MP Seng Han Thong a speedy recovery. As I understand the attacker was not of sound mind and has been to IMH for treatment hence it is possible he was honestly unable to tell right from wrong and was not in full control of his own mind. I heard on the news the attacker who is already 70 years old can be jailed for life. From the news reports about his mental condition, he appears to be suffering from schizophrenia. Anyone with such a condition cannot possibly be responsible for his actions. The insanity defense can be applied - but this is not a normal crime is a horrendous attack on an MP. So does the insanity defense apply regardless of whether the victim is an MP? Because the victim is an MP, a different punishment can be imposed on the attacker if he is found guilty. Burning an MP is not the same as burning an ordinary Singaporean...and that to many is a burning issue.

Sunday, January 11, 2009

SInce Independence Day, independence aplenty...

It has been several decades since we gained independence from the British. What "independence" meant to our forefathers was taking control of their destiny - to be independent of their British masters who governed them. Since our independence from the British, our govt has taken our independence to a whole new level....
Recent discussion surrounding the independence of our judiciary tells us how accomplished we are as an independent nation. Our judiciary is now independent of decisions from the Privy Council in England and it is independent beyond all doubt...anyone wearing kangaroo T-shirts is jailed for breaking the law for committing judicial blasphemy. Our AG engages in verbal and legal warfare against the Western media which constantly attacks ours judiciary like barbarians in our civilised world. The independence of our judges are so unquestionable that any worries about them being beholdened due to the appointment process can only be dismissed as conspiracy theories.
Now there will be an independent panel to decide on which party political film will be allowed in Singapore. I'm sure they will be as independent as the team that investigated Mas Selamat's escape and their views will be as independent as that of the Straits Times.
Having set high standards for independence in our institutions our govt constantly lament that Singaporeans are too dependent on the govt. You may wonder how this is possible when we are not a welfare state...when there are no safety nets like in Japan, Hong Kong, Taiwan and Korea. We are dependent on the govt for housing, transport, water, electricity and medical care.....and the PAP govt is so tired of the people being so dependent that it has hindered its ability to raise prices. An outstanding govt like the PAP ought to be able to raise prices to whatever it wishes and not have all these dependent people screaming at those price hikes. When our govt laments that Singaporeans are too dependent on the govt, it expresses the desire of our elite leaders to break free from a citzens who they see as hindering them from realising their grand achievements.
Yes, the PAP govt has created an independent judiciary, independent civil service, numerous independent panels,...and now it wants its citizens to be independent enough to be able to accept those price hikes without screaming the 4 letter word - PAIN.

Saturday, January 10, 2009

Party Political Films UNBANNED!!!!!!!!!!!

I guess that our govt has figured out that it is not quite consistent to say that people are suppose to understand 100 page financial prospectus and smart enough to avoid being missold structured products by banks when they are easily influenced by poisonous party political films put out by evil opposition members. They figured that with the internet, and people travelling widely to other countries, their brains are already poisoned beyond our govt's ability to wash clean with such bans.
"Singapore will soon allow party political films hat are objective and not distort facts, and an independent citizel panel will be set up to pass them...." - Straits Times
"Yes, these films have to be as objective and truthful as the Straits Times "
- Lucky Tan

If you read the article carefully it seems to say that if Chua Mui Hoong decides to become a political film director and objectively create a few films applying the same standards as her articles in the Straits Times these films will be approved and shown. ...however it is not so clear if Martin See makes another film it will be allowed to be shown. In place of the ban, we now have a panel to decide what Singaporeans should be allowed to see. Facts are not to be distorted and for a panel chosen from the establishment what is seen as facts, truth and what is distortion will simply mean that Martin See's film Singapore Rebel will remain banned .....and if Chua Mui Hoong' makes a new documentary "Great Thoughts and Infinite Wisdom of MM Lee", it will have no problem getting approval.

I personally think this is great. With so much poisonous material in the internet, now that the ban on party political films is lifted, the PAP govt can now make sure the right type of films can be broadcasted by Media Corp and shown to Singaporeans. ...and panel is in place to ensure that the film has no distortion of the truth....and the truth will be what this panel decides it should be.

Friday, January 09, 2009

Singaporeans work as long as you can!

MM Lee advises Singaporeans to work as long as you can : [Link]. Yes, work for as long as you can breathe. Why?....Many Singaporeans won't be able to retire at all. After all the tweaking of the CPF scheme for its use in HDB, Singaporeans are now at the bottom of a ranking of retirement income from pensions.


Jan 9, 2009
Pension & retirement income
S'poreans ranked lowest

SINGAPOREANS are at the bottom of a ranking of retirement income from pensions in the Asia-Pacific region, says the Organisation for Economic Cooperation and Development (OECD).
And this is true at all income levels, according to the study, which covered 19 locations including Hong Kong, Taipei and Japan, The Business Times reported on Friday.
The Pensions at a Glance study, which also involved the World Bank, found that Singapore's average gross replacement rate - the value of the pension as a percentage of earnings when working - is just 13.1 per cent.
Taipei has the highest gross replacement rate of 70 per cent, the report said.
'This means that the gross pension income for average earners in Taipei is over two-thirds of their previous earnings level, whereas pensioners in Singapore receive less than one-seventh the amount of their earnings,' says the study.
Singapore's pension is provided by the Central Provident Fund (CPF).
'The relatively low replacement rate for Singapore is because the calculations only consider the earmarked retirement account,' says the study. 'If an individual were to put the general account towards retirement-income provision as well, then the replacement rate would be 82 per cent.'
It points out that it would be foolish to say that one Singaporean who withdrew from the CPF to buy a house is worse off than another who built up a retirement income and then had to use some of it to pay for housing.
'Nonetheless, there is a risk that older people find themselves asset-rich and income-poor in retirement and facing difficulty in unlocking the value of their housing assets to pay for essentials,' the study says.
Replacement rates - the most familiar indicator for pension analysts - are not the only factor governments are concerned with. They also need to measure the value of the overall pension promise.
'This is measured by the indicator of pension wealth which takes life expectancy into account,' the study says.
Again, Singapore has the lowest measurement - a retiree's pension here is worth just an average 2.2 times their earnings at retirement. The figure for China is 21.2 times - the highest in the region.

Sunday, January 04, 2009

Protecting the integrity and independence of our courts...

Today's Sunday Times headline : LAW WON'T TOLERATE ATTACKS ON COURTS. [Link]

Singapore courts must be respected. Singaporeans must obey the law.

Anyone who raises questions about the courts is seen as attacking it as part of a broad conspiracy to undermine its integrity and independence and has to be prosecuted. The Western media is always attacking us and our system and they are trying to destroy the integrity and independence of our courts by questioning it.

The way to protect our courts and show the world that it is not bias is for our courts to unbiasly fine those that question it. A ruling by our courts that our courts are not bias reassures the citizens that our courts are completely unbias.
All these people who like to question our courts are driven by ideology and it is non-ideological to say that our courts must be respected and cannot be questioned.

Yes, the way to change the laws such as those preventing free speech, assembly, on censorship, etc that stops political alternatives from emerging and preventing them from winning elections is to get elected and change the laws in parliament. In short, change the laws that stop you from winning elections by winning elections - how's that for a smart idea. I wonder why Nelson Mandela, the respected leader that he is, never thought of that and organised so many protests.
As a Singaporean, I completely support what our AG and Chief Justice have said and I propose we go further. To bring up good citizens that respect the courts we should mandate that our students be taught that our courts are just in school and put that in the textbooks so that they grow up to be law abiding citizens and not someone like JBJ or CSJ. The truth should be taught in our schools and the truth is our courts are just....that can be the only truth. It must be a good thing for our students to obey the law and not question our courts....I recommend this video for you to further your understanding of the matter:

....and so it must be true that our courts are unbias and independent, I read it with my own eyes in the Straits Times!