Monday, November 30, 2009

Knockoffs from Handphones to Fruits....

The other day I picked up a few oranges from Seng Siong. I didn't notice anything amiss until a family member told me that all the labels are mis-spelled.

I still have a few (genuine, real) Sunkist oranges from Coldstorage and the stickers look like this:

Except for the words, the shape and colors are all the same.

The SonKiss oranges are really not too bad but I wonder why they have to copy the sticker. I bought them because they were cheap...that was a good enough selling point for me.

If you walk around Sim Lim, you will see those iPhone and BlackBerry knockoffs. For $145, you can get a phone that takes dual sim card, wifi, touchscreen, java, analog TV, 2 cameras, FM radio, MP3 and MP4 playback. They are really not too bad for the price conscious. But I really wonder if they have to make them look like BlackBerries, iPhones and Nokias because the price is already so attractive. It is really embarassing to be carrying a fake. I rather be using a unknown brand phone that doesn't look like some other popular phone.

Sunday, November 29, 2009

Cheaper, Better, Faster : Recycling a failed strategy....

NASA Report: Too Many Failures with Faster, Better, Cheaper"

Having a slogan linked to the Mars disasters is not so auspicious. However, "cheaper, better, faster" is not something new in Singapore. It has been practiced by the PAP govt for the past 2 decades - cheaper workers, better pay for elites and faster price hikes. The PAP has diversified its interests and it policy decisions clearly show this. Worker's Party MP Low once asked the PAP ministers to peg their pay as a multiple of the lowest earning 20% of the workforce to align their interests with those with the greatest need for improvement. The PAP refused and chose to peg their salaries to the highest earnings in various professions. The result is ballooning income gap - a constant stream of pro-business policies, regressive taxation and shifting cost burdens from govt to ordinary Singaporeans to lower corporate tax. When you have a govt driven by such mis-incentives, you sometimes wished they were not so efficient at hiking prices, eliminating subsidies and thinking of the next method of squeezing Singaporeans.

The "cheaper, better, faster" strategy like NASA's creates risks and passes them to ordinary Singaporeans. Because of the income gap, the faster we go with this economy (artificial steroids = massive foreign worker influx) the faster many Singaporeans fall towards the poverty line...hence Mr. Brown's famous article "Singaporeans are fed, up with progress!". We are also fed up with a govt that refuses to the interests of Singaporeans ahead of its other interests and it rewards itself handsomely for doing so.

Saturday, November 28, 2009

Ultimate Apathy?

In my previous posting on the topic, I discussed Michael Hwang's speech urging lawyers to less apathetic and work for the interest of the community[Link]. I speculated on the causes of this apathy among Singaporeans. Many Singaporeans don't seem to care what happens to other Singaporeans. Some of you might feel the lack of reaction and outrage among Singaporeans for having political detainees locked for decades and bankrupted for their views can be rationalised by the tumultous politics of the 60s that they are actually not so uncaring and ignorant but pragmatic. Optimists among you may believe if something big happens to our society people will stand up when it matters and all this talk about apathy is overblown - Singaporeans are more caring that what critics make them out to be. These optimists are wrong. Singaporeans are really apathetic, many really practise "mind your own business" religiously and will simply continue doing what they do no matter what happens around them. Don't believe? Try dying in front of Singaporeans to see if you get a reaction!

When you see no reaction from Singaporeans to govt policy, decisions, mega-losses by Temasek & GIC and countless price hikes, it is not because they think the govt has done nothing wrong or they have accepted those losses as honest mistakes - they have simply don't think and don't care.... period. They just mind their own business. The lack of reaction cannot be interpreted as Singaporeans being contented and generally happy. The lack of reaction is the result of extreme apathy. People don't care, they mind their own business.....their fellow Singaporeans can just drop dead in front of them and they can continue eating their chicken like nothing has happened. It is very sad what has happened to Singaporeans - almost nothing can move them and wake them.

Apply for Casino Exclusion ....Part 2.

In response to my previous post on the above topic, I received this comment
Anonymous said...
This self-exclusion thing is for problem gamblers/addicts to prevent themselves from losing control and start gambling. What's the rationale behind ppl who dislike gambling to sign up for this? Isn't your conscious mind and self-control adequate in stopping you from entering the casino?
27/11/09 22:55
My reply is this:

I tried to point out that gambling is bad not just problem gambling. Everyone should not go to the casino because gambling is bad not just for addicts. Addicts start by being non-addicts who get hooked after their 1st time. That is why those arguing against the casino don't want it on our soil because it will result in more people getting hooked. Sign the exclusion even if you're not an addict. Gambling is bad and we all should not start gambling. And if ever we get tempted, the exclusion will turn us back right at the door. The govt's message telling people to PLAY RIGHT, PLAY LIGHT is the wrong message. The point that only ADDICTS need to sign the exclusion is also wrong..because by the time you become and addicted it is too late. Everyone should sign this exclusion. Everyone should try their best never to get started on casino gambling. This govt has made too many mistakes on this problem.

I also receive comments that it does not matter if the govt campaign is encourages "responsible gambling" or "stop gambling". It makes a world of difference. You don't tell young kids it is okay to try some cigarettes as long as you don't get hooked. This campaign to ask people to gamble "responsibly" is a trojan horse. Out of 20 people who start gambling responsibly, 5-6 will become addicts and the problem will expand. The more they run this "PLAY LIGHT, PLAY RIGHT" campaign the worse this problem will get. It will be more beneficial for our society is people are told that gambling can lead addiction (so don't start). However, this govt has other interests like Singapore Pools and now ensuring the upcoming casinos are a success. The problems caused by gambling is handled by churches and social workers. I don't support the prohibition of gambling because it will push the problem underground and result in criminal elements in syndicates making money. What I support is proper education and sending the right message to the people.

Friday, November 27, 2009

Interesting quote on Dubai....

runroad left this quote in his comments in my blog....

"Dubai has the resources and visionary leadership to be one of the world's leading business hubs." Singapore's elder statesman said: "I'm greatly enthused by what's happening in Dubai. It's spectacular" -Lee Kuan Yew in the UAE, April 29, 2007.
..and yessir, MM Lee is also a visionary.

Apply for Casino Self-Exclusion Here...

You can apply for self-exclusion here:
I got my whole family to do it.

I was reading through stories about problem gamblers in Australia serveral months ago. In many cases they were passing by the casino (back from the cinema, restaurant, supermarket) and were drawn by the bright lights. They decide to go in play a few rounds on the slot machines(pokies) and before they know it they were hooked. Companies making slot machines program these machines with lights and sounds to trigger plenty of endorphins (pleasure inducing chemicals) to be released in your brain when you win. In fact they hire Phds to research how to get players hooked on their slot machines. Why do people get addicted to drugs? Drugs like marijuana cause the release endorphins in the brain and cause a craving for more. In Singapore we hang people who bring in marijuana but allow the slot machines in clubs. Why? Problem gambling is just as harmful as drugs - just look at the 12,000 loan shark harassment cases year to date. Many, I believe, are the result of gambling.

Before the govt even decided to build casinos to added to the problem, it was already a problem for many families and the harm caused by gambling is no less than that caused by drugs. Why are we so harsh on one problem and so lax on the other? I can't believe the poster at one Singapore Pools outlet I passed by the other day - it warned people about gambling by asking them to gamble within their means. The poster is found here [Link]

This ridiculous message is reflective of the effort our govt to put in to tackle the gambling problem. If you follow what the what the poster says, it is actually asking you to start gambling (responsibly?) as if it is a good thing like exercise - the correct message should be don't gamble or don't learn to gamble or don't start gambling or stop gambling. Most of these so-called "responsible gambling" campaigns are run by casino operators or online poker website operators. It is similar to the "Children don't smoke" campaign run by cigarette companies - the underlying message is children don't smoke so you're very adult to do so. How do people become problem gamblers? They start by playing light You don't go around telling people taking recreational drugs occasionally for pleasure is okay. It sends the wrong message by telling people there is something called "responsible gambling" ...that gambling can be good. They should tell people gambling is bad and it can lead to harm. I'm not suggesting the govt ban gambling outright but the campaign message has to be that you do it at your own risk of harming yourself and your family.

This govt is so strict it censors what we watch and read. Yet it allows something as harmful as gambling to proliferate and the related problem of loan sharking to grow. The govt's limited effort in this area has been disappointing and that is why many Singaporeans believe the casino will bring more harm than good.

Dubai's problems deepen.

I wrote about Dubai's real estate collapse in Feb 2009[Link]. I have a Malaysian friend who is there working as a business consultant and 2 months ago he wrote to me that he moved into a big mansion because rentals have fallen by more than 50%. If he loses his job in Dubai, he will just leave and go back to Malaysia. In fact that is what many foreigners working in Dubai have done in the past few months - they just leave without paying for property debt and car loans. Thousands of cars are left at the Dubai airport.

Yesterday, Dubai rattled global markets when it announced that it needed to reschedule its massive debt of US$80B. My instincts tell me that we will get over this one with a deal struck over the weekend. What worries me is actually what the market is not lookcing at manufacturing in Singapore is actually declining[Link] and the Chinese stimulus is masking many problems with its economy.

There is an important lesson in Dubai that is economic illusions can look really convincing. Just 18 months ago, Dubai announced it was about to build an skyscraper half a kilometer tall and a 2 years ago it was looked so impressive with its palm tree island and indoor skiing[Link]. They went on this strategy of growing their economy by attracting foreigners to set up shop and work there. Towards 2007, the large numbers led to a housing bubble and everyone was just flipping property and working as property agents. When the bust came, foreigners simply left and their banks and govt were left to hold the bag.

Really wonder if Durai is still in Dubai?

Thursday, November 26, 2009

Expert Defense of CPF : FLAWED Part 2.

“Staying Together, Moving Ahead.”
- PAP Election Slogan 2006
Before I get to dissecting what the expert has to say, I'll start with a story. A few months ago, I met a relative who was in his mid-forties. He was lamenting that the 'good ol days' were gone. He was working as a senior technician in his company and just bidded fareware to one of his senior colleagues who retired after almost 40 years with the company. The colleague who was also a technician will retire with full pension and medical benefits - if he got sick, he will get to stay in the same type of hospital ward as the top guy in the company. That is because when he was hired 40 years ago, the company believed that where-ever the person was in the company hierachy once they got sick, they should all be treated as equals and deserved the same medical treatment. They believed that people should have sufficient to for a proper retirement so they had a pension scheme. Which company had such a good scheme and wonderful philosophy that inspired so much loyalty among its workers? The company is the Singapore Civil Service and these people's boss was none other than the government of Singapore! Of course none of these came from the PAP govt. They were left behind by our British colonial masters - the Hong Kong Civil Service still has these schemes[Link]. The PAP quickly eliminated these schemes and replaced it with the CPF in the 1970s. So how does the CPF compare? In 2006, 103 veteran civil servants sued the Singapore govt to return to the old pension scheme[Link]. They felt short changed after the switched to the CPF scheme especially the loss of the medical benefits. They lost the case and had to settle for CPF. But they are not the only ones who should feel short changed - we are all now dependent on the CPF for our retirement and medical care.
I'll come back later to get to the next instalment of this discussion. We will discuss the underlying principles behind the CPF and I'll tell you why the PAP election campaign slogan is put at the start of this posting...and yes, we will dissect the expert's defense of CPF.

Wednesday, November 25, 2009

Expert Defense of CPF : FLAWED

In Oct 2009, Mercer's Global Pension Fund Index gave the CPF a 'C' grade. The full report is found here [Link].

The CPF did especially poor in adequacy and integrity (3rd from the bottom among 11 countries). In response to the Mercer report, an 'expert' who was involved in designing CPF Life defends the CPF in today's Straits Times. Most netizens would like to hear from a expert like Leong Sze Hian, but we get this expert from the National Longevity Insurance Committee tell us how good our CPF is. Is the CPF so complex that ordinary Singaporeans cannot understand the scheme and need a government expert to tell us how good it is? If the expert says it is good, then it has to be...Mercer's report is flawed, CPF is the best! I suggest you read what this expert says about the CPF in the Straits Times and see if you agree with her.

"...confirm will have report say the (Mercer) report is misleading not accurately blah blah blah"
- Hardwarezone forum 16 Oct 2009[Link].
I'll be back to do a line by line analysis of what the 'expert' has said.

Tuesday, November 24, 2009

Is linking HDB upgrading to votes pork barrel politics?

"Pork barrel is a derogatory term referring to appropriation of government spending for localized projects secured solely or primarily to bring money to a representative's district"
- Wikipedia [Link].
Friday, October 7, 2005 at 07:24 JST SINGAPORE — Singapore Prime Minister Lee Hsien Loong on Thursday criticized the corruption and pork barrel politics that have bedeviled Japan's political system.Lee, speaking at a luncheon organized by the Foreign Correspondents Association, said Japan is a good example of an Asian-style parliamentary democracy that has worked well. "But they landed into problems because of corruption, money politics, pork barreling, and then necessary changes were not made and the country, instead of making adjustments and prospering like America, just flew straight on and went into a storm. So how do we maintain our system and not end up like that?"[Link]
Our PM is so enlightened to be able to see the flaws in the Japanese democracy. The flaws that cause the Japanese system to become stagnant and eventually led the LDP's loss of power.
Before the Singapore General Elections are held, these were some of the announcements that came out:
Sembawang Town Council to spend $570m on renewal plan.
Jalan Besar Town Council unveils $517m estate upgrading plan
Sembawang Town Council to spend $570m on renewal plan
East Coast Town launches S$500m makeover programme
PAP's Sitoh has 10-year facelift plan for Potong Pasir
"Five years down the road, assuming Chiam do win, there will be no upgrading. After that, we got to ask ourselves whether the estate is worthwhile upgrading" - SM Goh
PM Lee said in March 2006 - "Whenever it comes to upgrading between the PAP and the opposition ward, it has to be the PAP first or else how do we explain to voters that they supported us and we did not pay attention to their needs? So that remains the policy. In Hougang and Potong Pasir, I think both Eric and Sitoh have ideas on what they want to do for their constituencies and these ideas include upgrading."
Because HDB flats are so expensive and most Singaporeans spend their whole working life paying for it, Singaporeans are very fearful that their estates are left out in estate upgrading because it will result in their flats being worth less. By linking estate upgrading to votes, Singaporeans are compelled to vote not for someone with the best ideas but for upgrading works in their area. Many will even vote for someone who is less ompetent and underperforms just to get priority in upgrading. Linking votes to upgrading undermines our democracy (or what is left of our democracy) because it takes away our right and freedom to choose the right person to represent us.
What the PAP govt has been doing is wrong and they keep doing it to preserve their own power at the expense of ordinary citizens. What we need are honest men with integrity who are willing to do the real work needed to serve the citizens and win elections fairly. We will never have this as long as they link votes to upgrading.

Monday, November 23, 2009

Apathy among Singaporeans...

In a recent speech by Law Society Chairman Michael Hwang, he described Singaporeans as apathetic and urged lawyers to stand up for justice.

"You must care about justice, and fight for justice where you see injustice, not just for your immediate client, but for the community at large" - Michael Hwang[Link]

In his speech he cited a few examples of apathy among Singaporeans. But he didn't explain why and how ordinary Singaporeans and lawyers became so apathetic. After a number of lawyers in the law society were detained under the ISA[Link] in 1986, I remember the then PM telling lawyers they should focus on their legal practice as there were plenty of opportunities for them (to make money) as the economy expands. MM Lee made it very clear when he ran the place that fighting for justice comes with steep personal price - you're better off minding your own business. In the 70s, the university was the hotbed of activism and the govt ended that with the arrest of student leaders. By the time I went to university in the 90s, most students had little interest in anything else other than passing exams. The hightlight at that time was when a few students from the Socialist-Democracy Club plucked up enough courage to visit Chia Thye Poh in Sentosa who by then had been detained for more than 2 decades.
Years of authoritarian rule has transformed Singaporeans into 'sheeple' - having only enough enthusiasm and energy to make sure things are okay for themselves and their families. I've frequently been given this advice - if you're not happy with how this country is run, you're better off using your brains to make as much money as you can so that you can emigrate rather than change the way it is run. This is true only if most people believe it is true. Unfortunately, thousands of Singaporeans take this advice and leave the country every year. The more you believe things cannot change, the more they will stay the same.
In the past few years, Singaporean sheeple have noticed the grass in front of them has been getting thinner - the things they don't care about and complacently left to the people who were suppose to take care of their interests are starting to affect them in negative ways. A number woke up one fine day to find their lifesavings have vanished because the banks and regulators have allowed toxic financial products to be sold to them. Many find that job security is now gone - they can be easily hired, fired or replaced with little compensation. Others woke up to find they can no longer afford something as basic as the housing they want. Many suddenly discovered that they are surrounded by foreigners who have no long term stake in this island. Many discovered how far they have fallen behind as the cost of living rose and the income gap ballooned.
In a society we are always better off if we learn to care for each other and pay attention to the plight of other Singaporeans because we won't know when their problems will become ours. They like hiving subservient apathetic citizenry so they can keep their hold on power and maintain the status quo. At the end of the day, being a Singaporean only matters if Singaporeans care about what happen to their fellow Singaporeans otherwise you can just issue those pink cards like candy to anyone who comes here just to boost the population numbers.

Govt helps Singaporeans by increasing property tax!

It is not enough for you to understand that the property tax has been increased because your property value has gone up due to our govt's inability to cool the current property bubble. You have to understand that the increase is actually done for your own good and this increase is made to help you!

According to Minister Lui, the hike of property tax next year is to prevent a bigger hike later "should home prices continue to rise". How does he know that home prices will continue to rise? It will only keep rising if the HDB does not keep up with supply so is that the govt game plan?

So all of us should go to our boss to ask for a pay hike to help our company. Please hike our pay now to avoid a bigger hike next year should the economy get stronger.
Hiked to avoid bigger rise[Link]

THE property tax of HDB flats is being raised next year partly to avoid having to introduce a bigger increase later should home prices continue to rise, said Acting Minister for Information, Communications and the Arts Lui Tuck Yew.

He gave the reason on Sunday when he was asked, at a dialogue with Aljunied-Hougang residents, whether the Government could have delayed it since the recession has just started to ease

Sunday, November 22, 2009

Every 5 years we get those "once in 50 years" floods....

The previous one being in 2006. The minister said:

"You can't design for rainfall of this level, it is just too huge. The thing we can accept is that we can only design our canal of a certain size, and at the end of the day, we have to live with some of these occurrences which occur once in 50 years or so".
-Dr Yaacob Ibrahim, Environment and Water Resources Minister, 2006.[Link]
Looks like we don't pay our ministers enough to create a different excuse when these things happen.
"Yesterday's event, I was told by the PUB, occurs once every 50 years"
- Environment and Water Resources Minister Yaacob Ibrahim, 20 Nov 2009[Link]
I was caught in a flood at Bukit Timah in 1988. It took 5 hours for the water to subside before I could get out of the bus I was on to go home. Al Gore said in his movie, An Inconvenient Truth, that Singapore will be underwater in a few decades. I wonder if the future minister will say "Sorry guys, it is just a once in a 3000 year event" as all of us drown in our HDB flats.

Saturday, November 21, 2009

Stock Market : Picking a Top Part 4.

Part 3 is found here.

A few of you wrote in the comments section to ask about the stock market.

Here are my thoughts.

After I called a peak at roughly the middle of Oct 2009, the market (Dow Jones Index) fell about 5% after it peaked on 19 Oct. It rebounded from the low in early to rise to another peak earlier this week. I believe this whole rally is driven large by liquidity. On and off we get some economic bad news that get investors worried so they sell off and cause the market to have these small corrections of about 5-6%. We had a number of these since June 2009 and each time the market recovered to reach new highs. In the past postings on the same topic, I said that it can be quite difficult to pick a top unless there is an identifiable final peak. I'm trying to figure it out. The market is starting to look very familiar to what happened in 2003. In the 2003. the market hit a low in March, ran up like it did this year. Along the way, the usual worries about the nascent economic recovery caused a few ripples in the market but no major correction. Like 2009, the market in 2003 was also driven by liquidity following a series of rate cuts that caused the interest rate in the US to be near zero. Like 2009, the 2003 recovery was also a "jobless recovery" so doubts about the economy kept recurring throughout rally. The 2003 rally looks like this:

Our current stock market rally is actually larger than the one in 2003. However, the psychology of the market is very similar so is the duration and the type of 'small' corrections we have seen in the past few months.

If you look at the 2003 chart, there is a big final run up somewhere from mid-Nov to the end of 2003/beginning of 2004. The question in my mind right now is whether we will see a similar run up in this rally that will take us right to the end of the year. I tend to remember things about the economy and stock market very clearly - in mid-Nov 2003, there were nagging doubts and worries about recovery...then all of a sudden, in a matter of days, investors became very optimistic and the market rose - and it did so continuously because the beliefs of investors were reinforced by the rising market and the coming Christmas sales which analysts kept insisting will boost the economy.

The market in 2009 is going through a very similar phase. I think we might see a point in time when doubt is replaced by euphoria resulting in a final run up that will mark the end to this magnificent rally. 2010 might look like 2004 when the economy strugggled to stay out of recession and the stock market went nowhere for a whole year.

In case I'm wrong, I've also put in trading stops to protect my profits from the current rally and if the market becomes directionless, I will sell in small batches. I'll describe in some detail what I did and how I generated those returns when it is all over.

While these are my thoughts on the market and I intend to go along with my I'm not a professional, I suggest you guys take what I say with a pinch of salt.

Ron Paul Audit the Fed Bill Advances

Given the current state of the US economy and the high level of debt in the country, it is hard to argue that the Fed under Greenspan had done a good job. The main argument against his bill was that the Fed should be kept independent so they shouldn't be audited. In the book Greenspan's Fraud, Ravi Batra's analysis of Fed policy showed that Greenspan wasn't independent at all anyway and supported irresponsible fiscal policies such as those of George Bush in 2001 which put country back on the path of rising govt debt. It just doesn't make sense in a democratic country to have such a powerful institution shrouded in so much secrecy.

Ron Paul explains why he thinks why the Fed has to be 'ended':


November 19, the House Financial Services Committee advanced a bill that calls for the General Accounting Office to conduct a comprehensive audit of the Federal Reserve by the end of 2010.
A 43-26 committee vote rejected a substitute proposal offered by North Carolina Democrat Mel Watt. Its provisions would have sanctioned retention of the long-standing ban against congressional scrutiny of the Fed’s monetary policies.
Despite opposition from committee chairman Barney Frank of Massachusetts, the measure written by Texas Republican Ron Paul survived its first test. Success came because of 313 House cosponsors and a huge outpouring of citizen backing. Yet Frank claimed that the proposed audit would “be seen as weakening the independence of monetary policy with consequent negative implications."Frank’s opinion has regularly been buttressed by Fed chairman Ben Bernanke who urgently favors retention of the Fed’s independence. Practically all opponents of the Paul measure pointed to the need for the Fed to continue operating without oversight. Former Fed research specialist Michael Feroli, now an economist with JPMorgan Chase, urged the Fed to “do whatever it takes to stop this from going forward and eroding confidence in the Fed’s independence."But it is precisely a loss of confidence in the Fed that has generated unprecedented support for opening up the central bank’s books and supplying the American people with heretofore hidden information. The Fed certainly had a role in bringing on the current economic downturn. Chairman Bernanke’s refusal to answer questions about the Fed’s role has added more muscle to the growing demand for scrutinizing the Fed’s books. If the Fed has nothing to hide, detractors ask, why do its leaders and supporters fear scrutiny?Should the measure gain full House and Senate approval and a presidential signature (surely steep hills to climb!), the Fed will have to bare details about its emergency lending programs, bailouts of financial institutions, dealings with like institutions in foreign capitals, and the process it employs in setting interest rates. Chairman Frank has sought to calm the fears of Fed supporters by indicating that the Paul measure will be “revisited” when the full House considers the bill. Piggybacking the measure onto another bill, such as the proposed Financial Stability Improvement Act, might be one tactic to undo it. Without doubt, roadblocks will be erected to gut the bill, and the big guns seeking to preserve the Fed’s vaunted “independence” will surely be trotted out as the measure proceeds through the legislative process.Few supporters of our nation's central bank care to note that the creation of the Federal Reserve parallels a call in Marx’s Communist Manifesto for “centralization of credit in the hands of the State, by means of a national bank with State capital and an exclusive monopoly.” The Fed was actually pushed toward creation in 1913 by President Wilson’s powerful and manipulative guru, Edward Mandell House, who earlier had written of his desire for “Socialism as dreamed of by Karl Marx."But note that Marx sought a central bank “in the hands of the state.” Those who created the Fed in 1913 went a huge step further and made it a private institution free of congressional scrutiny. Fed creators actually out-Marxed Marx by shielding it from examination. The result? Under its management, U.S. currency has lost 95 percent of its value, a trend that continues. The American people are being cleverly divested of their wealth. And power over what happens in our nation sits more with the Fed than it does with Congress. The American people need to know what the Fed has done and continues to do.Congressman Paul has also introduced a measure to abolish the Federal Reserve outright. His recently published bestseller End the Fed provides reasons why management of the nation’s economy should be terminated, fiat currency should be discarded, and commodity money reestablished. His efforts over many years, long considered extreme or even absurd by the establishment, have attracted enormous popular support as evidenced by the audit measure’s 313 cosponsors.What will happen as the audit bill moves through the congressional process is unknown. But the awakening of a large number of Americans to the secrecy and power of the Fed should already be considered a stunning victory for Constitution-minded Americans.

Friday, November 20, 2009

Some Singaporeans become a minority in Singapore......

“When I go for a function and I see only expat Indians and no Singaporean Indians, I feel uncomfortable – like the future is being taken over by expats. What will happen in 15 or 20 years’ time, when my children start work?’ -Mr K. Varatharaju.

Straits Times [Link]

Actually Mr. Varatharaju does not need to wait until his children start work. It is already happening.
An increasing number of companies in Singapore now do not even want applications from Singaporeans let alone older Singaporeans:
I don't blame these companies or foreign individuals at all for the current situation. Companies want foreign workers for various reasons - no in-camp disruptions, can easily hire and fire, bigger pool of younger workers, sometimes lower wages etc. Companies are profit seeking entities, they do not exist to maximise the social or economic benefits for Singaporeans. Someone else was suppose to take care of that equation. You cannot blame foreigners because they are here to seek a better life for themselves just as we do for ourselves. Once there is a large pool of, say, mainland Chinese, in the company it makes less sense to hire Singaporeans because the cultural and language differences will make management difficult. There is no shortage of almost any kind of skill you can get from China and India so you can guess what will happen to the Singaporean worker in the long run if the PAP keeps its policies.

Thursday, November 19, 2009

Structural Unemployment in Singapore

We are told to work for as long as we can and if possible never retire.

However, once you reach 45 and above, finding a job is a challenge. Older Singaporeans have struggled with this problem for many years. Recently the MoM came out with a set of guidelines on the re-employment of older workers[Link]. These set of guidelines will lead to legislative changes in 2012. So 3 years from now we will discover these guidelines to be inadequate and ineffective. Why?

Our structural unemployment problem is caused by our liberal foreign worker policy which brought hundreds of thouands of young workers from India, China, Phillipines etc. Our workforce demographics has been distorted by this high influx. With a large pool of young workers available why would employers try to retain or hire older Singaporean workers? Remember in the past we never had the structural unemployment problem because during the boomtime, employers will have a hard time find workers and they are 'forced' to hire older workers and give them a chance.

You can read about what the MoM is trying to do. It does not get to the heart of the problem and when we get to 2012 another 3 years will be wasted and many more seniors will be struggling to stay afloat.

52-year-old tried CDC job-matching, but still draws a blank
I REFER to the letter, "Hiring seniors", by Ms Jackie Chew last Saturday.
She is not the only one who has been experiencing difficulty in finding employment.
I am 52 years old and the sole breadwinner of my household. I lost my job in August and have tried job matching via community development councils (CDC). I sent in numerous applications, attended numerous interviews and still drew a blank - no replies, no phone calls whatsoever.
Some jobs in the administrative field require women only or someone who can "liaise with Mandarin-speaking customers", which puts me out of the running, even though I have administrative experience of more then 20 years.
I hope local employers would reconsider their age restriction policy, and like Ms Chew, I am not giving up hope just yet.
Sazali Arshad
Please don't belittle older job applicants

I REFER to last Saturday's letter by Ms Jackie Chew, 'Hiring seniors: Too many firms still unsupportive'.

What does it take to get a job after age 56? I found out the hard way that trying all ways is of no help.

I am 59 and I am experiencing the same discouraging questions and remarks from potential employers.

The often pointed interviews go like this:

'So you have no more housing and car mortgages to service. Your children are all grown up now. You are now a free man. But this job calls for hard work.

'You can't take this job to pass your time.'

I also note that younger supervisors prefer to work with subordinates younger than them.

Still, I am not giving up.

Hiring firms and bosses should be more humane in their interviews. Please do not belittle us.

Those who interview older applicants should remember that one day, they too will join our ranks and taste the same bitter pill.

Tan Siang Eng
Hiring seniors
'Too many firms still unsupportive.'

MS JACKIE CHEW: 'What does it take to get a job? I found out the hard way that trying all ways is of no help if one is aged 56, like me. While I read of earnest government efforts to encourage people to work until they are 65, the reality is far from encouraging. An example: When I answered a job ad, the first question I was asked was my age, followed by the remark that the company was looking for applicants aged 30 or younger. Too many firms are still unsupportive. Firms should also be more diplomatic in conveying their age-restrictive policy. Still, I am not giving up.'

Tuesday, November 17, 2009

The Economist : A PR problem

The warning signs were all there for the past 8-10 years. The PAP ignored the concerns of the people and it is now too late to turn back - the PAP will have to face the resentment of the citizens adversely affected by their policy at the coming elections.

I sense the ground has shifted on this single issue. Along with the rising cost of living, income gap, stagnant wages and structural unemployment, there is rising disquiet and unease among the population that is not going to disappear due to the PAP's usual pre-election 'sweetening'.

The PAP govt pursued a path that lacked common sense and a large segment of the population have suffered due to their bad policies.
[Link to article in The Economist]
Immigration becomes the hot political issue in a model city-state

A bit too exotic for Singapore’s comfort?AT CHINA’s 60th anniversary bash last month, Zhang Yuanyuan, a China-born, permanent resident of Singapore, was caught on camera professing her love for her native country. The clip caused a storm in the island state; it was the latest sign of resentment towards incomers and evidence that immigration is becoming the city-state’s dominant political issue.

Faced with an ageing population and low fertility, Singapore’s government has long courted foreigners to plug gaps in the workforce. In 1990, citizens made up 86% of Singapore’s 3m people. Today, the share is 64% of 5m-odd. More than one in three people are foreigners (permanent residents, known as PRs, and non-residents).

In the past, immigrants were concentrated at the top or bottom of the jobs ladder, performing work that Singaporeans could not or did not want to do. Today, foreigners compete on almost every rung. Some, like geneticists, bring in useful skills. Others—it is feared—displace local skills and depress wages at the bottom.

Such fears are especially sharp during a recession. Critics say PRs enjoy the benefits of citizenship without all the responsibilities, such as national service for men (first-generation PRs are generally exempt). Immigrants are said to mix less with Singaporeans than they used to. The rise in numbers means many foreign groups have reached critical mass, producing little ethnic enclaves—the government’s bête noire. “I am Singaporean and tired of service staff who can only speak Mandarin” is a group on Facebook, the social-networking site, with more than 10,000 members.

High immigration has coincided with a widening income gap. Singapore’s Gini coefficient, a measure of inequality, rose from 0.444 in 2000 to 0.481 in 2008—higher than in China and America. The contrast between the glitzy downtown and the “heartlands” is glaring, and more damaging in tiny, dense Singapore than it would be in a big country, says Paulin Straughan of the National University of Singapore.

To defuse the pressure, the prime minister, Lee Hsien Loong, says Singapore will slow down the intake of migrants while accentuating the privileges of citizenship. Meanwhile, the government has plonked S$10m ($7m) into the new National Integration Council (NIC), which will try to promote interactions between different groups. It will not be easy, as the government admits. “The NIC recognises that integration is a long-term effort, and may take years before success is apparent,” says Dr Vivian Balakrishnan, the head of the NIC and minister for community development, youth and sports.

But Singaporeans care less about fuzzy notions of integration than their own jobs, says Chung Wai-Keung of the Singapore Management University. He wants employment laws rewritten to favour locals. But this would contradict the government’s commitment to an open economy. And the dominance of the ruling People’s Action Party means that in Singapore—unlike many countries—anti-immigrant sentiment cannot easily gain a strong political voice. Expect no drastic policy changes.

These ripples are part of Singapore’s transformation from a micro-managed melting pot into a cosmopolitan city-state. Before the internet, it is hard to imagine the debate that raged around the hapless Ms Zhang. Now, many Singaporeans defend her. In the new Singapore, it is all right to love one’s country—even if it is China.

Taxi Ridership Falls...

Straits Times taxi ridership falls

So what is the surprise? Taxi ridership fell from 11.3 million rides in 2007 to 10.9 million in 2008. Taxi driver's income (those driving 10 hours a day) shrunk 6% to $2250 a month.

I used to take taxis everyday to work 5 years ago. But my taxi fare went up from $16 to $26 over the years! The last fare hikes in 2007 pushed me to take buses and the MRT.

The following postings from my blog:

So who wanted the fare increase? Recall that the cab drivers were against the fare increase which caused them to lose customers during the peak hours. There is now a deadweight loss as the capacity exceeds demand during these hours and many cabs lay idle during peak periods except on rainy days.

Goodbye taxi hello bus + MRT. I love taking taxis to work. They get me there fresh, ready and energetic. The buses and MRT packed like sardine cans drain my energy. However, I didn't have a choice but to switch because the hikes at the end of 2007 were hefty:

Current Rate.............................................New Rate
City Area Surcharge $1 peak hour to $3.00 (5pm till midnight, Mon to Sat)

Late Night Charge staggered 10% to 50%--------- 50% of metered fare (12am till 5:59am)
Peak Period Surcharge $2.00 ---------35% of metered fare (7am till 9:30am, 5pm till 8pm)
Flagged Down Fare $2.50 for first km ---------$2.80 for first km
Waiting time $0.10 every 25s ----- $0.20 every 45s

Distance Rate (<=10km) $0.10 every 210 m-------$0.20 every 385m from 2nd km till 10km
Distance Rate (>10km) $0.10 every 175 m ------$0.20 every 330m above 10km
Call Booking (prime time) $4.00 ------$3.50 (7am to 9:30am, 5pm to 11pm , weekdays)

Call Booking (other time) $2.50 ------$2.50

Singaporeans pay more for fewer taxi rides. Taxi drivers make less income. So who or what is doing better? Answer here.

Recently, LTA rejected the application to start another taxi company[Link]. But I think the solution is to cut out the unnecessary middle man who makes a hefty profit from taxi rentals.

It is a case of high fares killing the goose that laid the golden
The Land Transport Authority should realise the current system is not
Privately owned taxis do not require a layer of management and
its associated costs. In fact, the idea of taking home all the fare spurs harder
work, as in any free enterprise.
- Jack Chew's Forum Letter[Link]

The LTA eliminated independent privately owned taxis leading to almost full corporatisation of the taxi business. The end result is higher taxi fares and lower income for taxi drivers.

"Taxicabs of Hong Kong provide a taxi system. Most taxis are independently owned and operated" Wikipedia on Taxicabs of Hong Kong.
In many cities, taxi company operate as cooperatives[example here] so that taxi drivers can earn a better income. But in Singapore, it is better, cheaper and faster so that corporations can make more rent.

Monday, November 16, 2009

Dr Lim Hock Siew speaks....

As a Singaporean, I cannot support this system and the people running the system that did this to a fellow Singaporean. Dr. Lim tells us that the authorities wanted to extract a 'repentence' from him as a condition for his release from detention. Dr. Lim does not need to repent...the people who locked him up for 19 years should be the ones repenting their atrocious inhumance actions. Until today, they show no regret - one of them telling the whole world that the Chinese people do not want democracy or freedom....the 2 things that could have prevented this despicable act.

Economic Illusions : Where the Chinese stimulus went...

Hedge fund manager Hugh Hendry is a very intelligent guy. You can occasionally catch him on Bloomberg when he appears as a guest to share his wisdom on the world economy and financial markets. In today's world, you get to the truth by asking the right questions. While the world applauded China's stimulus for being more effective than Obama's generating 9% growth for the Chinese economy, Hugh Hendry asked himself where the billions in China's stimulus package went to and this is what he found:

From the mainstream media, we get this impression that the Chinese economy is an almighty unstoppable engine that is about to lead and dominate the world. The truth is a large part of the Chinese economy is export dependent and highly dependent on US consumer demand. When the US economy started tanking, Chinese factories closed and workers were laid off in large numbers. In a normal year, there are 600 riots (official figure) so there is enormous fear of social unrest if unemployment goes up. To shore up its economy temporarily they pumped billions into infrastructure projects and encouraged their banks to lend to businesses. They were able to avoid massive unemployment and keep the economy going until now.

While the media become fixated with the 'Chinese miracle', they forget how fragile their system is today. There is little doubt where China will be in long run. Throughout history, there were a few short periods of 100 years where China fell behind for various reasons only to surge ahead of the world. The problem is most of us don't live to 100 and China's resurgence is not a one way street given its current political and economic system in which various excesses can build up. The recent case in Chongqing [Link]shows how things can go very wrong in when you have a mix of centralised power, corruption, capitalism and crime. Chongqing is not a small town - it has a population of 31 million.

MM Lee said the Chinese are not interested in votes and freedom of speech[Link]. Economic growth masks many underlying problems with the Chinese system - we just have to look at Indonesia and S. Korea in 1997 to understand how quickly the illusion of an economic miracle can unravel. ...and when those economies fell apart during the Asian Crisis...what did the people want and demand for? Democracy and freedom. Today these nations are functioning democracies and the people are no worse off than they were under dictators and authoritarian rule.

Saturday, November 14, 2009

Prof Hui Weng Tat: Slow the foreign influx.

You can read the article on Prof Hui's view here[Link]. The article can be summarised as follows:

1. Singapore in maximising its GDP growth went overboard to import foreign workers. In 2007, of the 235,000 jobs added in 2007, six in 10 went to foreigners. The ratio rose last year, with foreigners taking seven in 10 of the 222,000 new jobs.

2. Importing foreign workers in large numbers has worsened the income gap. The depression of low wage workers' income, Prof Hui believes will lead to social problems.

3. 5000 Singaporeans seek residency elsewhere. These are usually the higher skilled workers.

4. His solution is to tighten the foreign influx, accept moderate growth and allow dual citizenship to retain talent.

For those reading my blog there is nothing new in Prof Hui's views except that he is an associate professor at the Lee Kuan Yew School of Public Policy and his views appeared in the Straits Times.

With the income gap that is so large, our problem is one of wealth distribution. There is no point in maximising GDP growth when a large segment of the population does not benefit from the growth and have to shoulder the disproportionate burden of the side effects of such growth in the form of rising cost of living and depressed wages. A few years ago, when the govt discovered that the wages of many Singaporeans have fallen below subsistence level, they implemented Workfare to keep these Singaporeans afloat - just enough for food, housing and transport - but it is capped at $100 per month and workers have to:

  • Be a Singapore Citizen; and
  • Have a monthly salary of $1,500 or less; and
  • Be above 35 years of age; and
  • Stay in a property with an Annual Value of not more than $10,000; and
  • Have worked at least three months in any six month period in the calendar year for half the payout, or at least six months in the calendar year for the full payout.

Workfare is a small patch so that the PAP govt can avoid major policy changes and keep the system going. But what is really so appealing about a system that have Singaporeans working full time jobs to stay just above the subsistence level?

The main reason why the PAP has not done more is because we have a political system in which the people whose benefits have been traded off suffer in silence because they have no voice and can do nothing in this climate of fear. If you look at the Prof Hui's table on the widening wage gap, it is no coincidence that every country above us has more political freedom and democracy.

Thursday, November 12, 2009

Snippets from Capitalism A Love Story...

Managed to catch the movie yesterday. It exceeded my expectations in terms of entertainment value but objectivity and rigor are not Michael Moore's strengths. You have to hand it to him for making topics like capitalism entertaining. There are many lessons in movie relevant to Singapore including the erosion of the middleclass, hollowing out of the US economy, falling wages as productivity increases, dangers of consumer & housing debt and the consequences of tax cuts for the rich etc.

One part I found one part particularly interesting was a speech by President Carter who warned about the dangers of a materialistic society in 1979:

A society in which people define themselves by what they own and consum will eventually lose its meaning and purpose. President Carter in 1979 foresaw the dangers of a materialistic society ruled by money.

Another part of the movie I found interesting was about a memo that Citigroup sent to its high net worth individuals in 2005. It described how USA has turned into a plutocracy (rule by wealthy) in which the top 1% has more wealth than the bottom 95% combined. The only threat to this plutocracy is democracy - one man one vote means the 99% of the people at the bottom control 99% of the votes. The only reason why the 99% put up with the income gap is the belief that they too can be one of the people in the top 1% if they work hard enough. The Citigroup memo is found here:

The movie traces what happened to ordinary American families over the past 2 decades and the bottomline is life got steadily worse under a highly capitalistic system in which leaders simply give in to the demands of big corporations . If the system does not change it is not difficult to predict what outcome will be for ordinary Americans in 20 years time. There are many similarities between what has happened in America and what is taking place here in Singapore. If change does not come soon, it is easy to predict what will happen to the ordinary Singaporeans in 20 years time.

Tuesday, November 10, 2009

Time for the govt to do something about loan sharking!

The govt likes to challenge us - please be cheaper, better and faster. Please upgrade your skills. Please bear with the tide of foreigners, 'even if it's making Singapore a little uncomfortable and cramped'[MM Lee's speech to Tanjong Pagar residents]. For a govt so good at asking the people to meet its demands, I have something to ask of the govt: Please do something about the loanshark problem.

In the 1st half of this year, the number of reported loan shark harassment cases doubled to 9395[Link]. By the end of this year, the total number of reported cases will be in the ballpark of 20,000. Most cases go unreported so the actual number is very high. In a country where officers are hired to catch people for eating sweets on MRT, it is ridiculous that we have a loan sharking problem of this scale. Several comments in my previous posting pointed out that borrowers are part of the problem. Whatever it is, there is something very wrong - how did so many citizens of this 1st world country end up borrowing from loan sharks? Gambling? Desperation?

"You shouldn’t criminalize people who have no choice but to turn to the loan sharks to buy food and clothes for their families.” -Ravi Philemon[Link]

We have people who are so poor they need to borrow from loan sharks to put food on the table? If we have a small number of cases a year, perhaps we can blame it on irresponsible people who mess up their lives and need to go to loan sharks. But this problem is so widespread and systemic there are factors beyond the individual. When problem gambling and loan sharking is so widespread in the society, there are probably causes beyond individual level factors responsible. You go to a Singapore Pools outlet and they have these posters that say gamble in moderation, underage gambling is bad....shouldn't the message be gambling is bad whether you do it in moderation ...underage or not. The govt conduct very soft campaigns against gambling - you don't say taking drugs in moderation is okay. The Singapore govt hangs traffickers of soft drugs like marijuana because they believe it will lead to hard drugs like cocaine. Problem gambling starts with 'moderate' gambling. While gambling shouldn't be banned, more should be done to educate and discourage gambling.

The PAP pride itself to be an efficient govt that performs. When it comes to the loan shark problem, I don't see good performance. The problem is getting worse and many Singaporeans are adversely affected by it. Yet the best idea from our minister who is paid millions is to criminalise the victims so that they will be to afraid to go to the police[Link] - yes, that will make the stats look good and pretend the problem has gone away....

Monday, November 09, 2009

MM Lee predicts 3% growth next year...

His latest prediction on the economy found here
In March 2009, he predicted the Singapore economy will contract 10% in 2009[Link]
The other thing I remember him predicting was UBS being a good long term investment. He predicted in 2007 that we were in a golden period. In 2008, he predicted that it would take 3-5 years for the world economy to recover[Link]. Before the recent recession he predicted that Singapore will be able to escape a recession because of growth in China and India:

"This economic downturn will mark the first time that when America sneezes, Asia doesn't catch a cold. Yes, Asia will be affected, but not as severely. Because China and India will not experience a recession, Japan, South Korea, Taiwan and the Asean countries will avoid it...."
- MM Lee in 25 Feb 2008 explaining why there will be no recession in Asia[Link].

I remember MM Lee once predicted that if the Hong Kongers were to leave en masse because they didn't like the authoritarian Chinese govt after the handover, the Hong Kong economy can keep going with imported foreigners. That one about foreigners he got right but on the wrong island.

Given his track record for predictions, I think I better start preparing for a second dip of this economy next year. I think the stimulus induced growth is too good to be true and when the stimulus runs out, many govts simply cannot keep borrowing to push the economy along.

Sunday, November 08, 2009

Man killed his children... ...

By now, I think most of you have heard the tragic story of a father who killed his own children then himself. This is an extremely sad story but one parts of this story occurs in every housing estate in Singapore, every block of flats, and is familiar to social workers, church pastors and many ordinary Singaporeans. This tragedy could have been prevented if we have greater determination....

When the PAP came into power, it spared no effort to contain its political opponents. 4 decades later, the newspapers that had not so nice things to say about the PAP are gone. Political opposition shrunk, laws to limited their activities are numerous and anyone thinking of joining a political party is somewhat fearful. But loan sharks seem to flourish in Singapore. If the PAP spends the same energy to get rid of loan sharks as it does to retain its power by repressing political opponents, these loan sharks would have long been eliminated. Loan sharks hurt ordinary Singaporeans so it is not an urgent problem for the PAP govt but any one giving a speech without permit or taking part in a peaceful march will be haul into court and treated like dangerous criminals. Earlier this year when dismal figures of loan shark harassment popped up, Minister Wong Kan Seng's best idea was to make it illegal to borrow from loan shark so that harassment victims would be too fearful to report the crime because they too can be arrested[Link]. If the PAP govt exercise they same creativity and energy to contain loan sharks as they do the opposition, this problem would have disappeared 20 years ago!

In response to concerns about the casino and to make the decision to build those casinos palatable, it promised a campaign to prevent problem gambling. For that purpose, the NCPG (National Council for Problem Gambling) [website]was formed. It took the PAP, decades to get around to doing something and they did so only when tremendous opposition from all quarters of society got together to oppose the casinos. However, saying they will do something about problem gambling to reassure Singaporeans that casino will not cause that much harm is a promise I do not trust - casinos typically make about 42% of the revenues from problem gamblers[Link] and their success depend on a large part on problem gambling.

Why did the father kill his children then himself? He was a problem gambler who borrowed from loan sharks and was badly harassed by them. Remember before the decision to build those casinos, there was a similar case of a man killing his family then himself because of problem gambling and loan shark harassment[Simon Lee killed his family and himself in March 2005] . Now 5 years later just before the casinos are opened we have this tragic case and no progress on problem gambling. The PAP tells us they are building these casinos to create jobs for Singaporeans but many jobs are filled by foreigners and Singapore has so many jobs we need to bring in foreigners to fill them. The problem in Singapore is not the lack of jobs but structural unemployment, low wages and shortage of jobs that match Singaporeans' skills. There are numerous other better ways to create jobs. Why build those casinos? Andy Xie once said in an email what the Singapore govt is trying to bring in with those casinos. I think there is some truth in what he said - recently ahead of Singapore's casinos opening, the Chinese govt increased the number of permits/visas for its citizens to go to Macau. I don't believe these casinos are built to benefit ordinary Singaporeans - the govt will gain from the casino revenue and leave the churches, volunteers and social workers to cope with the problem it generates.


Man kills own children [Link]

A MAN, 38, suspected of setting fire to a flat and killing his two young children, later fell from a high floor and died in hospital.

The incident, believed to be murder-cum-suicide, took place at Block 543 Ang Mo Kio Avenue 10 on Saturday night.

Police received information at about 9.50pm that a four room flat on the sixth floor was on fire. The Singapore Civil Defence Force (SCDF) was alerted too.

When they arrived at the scene, a body of a man was found lying at the foot of the block, badly injured.

He was believed to have run up to the 12th floor and leapt off. He was rushed to hospital where he died later.

When officers went up to the burnt flat, they found the bodies of a boy, five and a girl, three, who were said to be the man's children.

Neighbours said they often heard quarrels and sounds of breaking glass from the flat.

New immigrants help sustain, enrich S'porean way of life, says SM Goh

[Link to Report on SM Goh's Speech ]
Of course it is true - having a appropriate number of immigrants each year will enrich our lives. That is however not the reason for the PAP govt having such a liberal immigration policy that opened the floodgates to foreigners. Having one cup of coffee everyday helps to gets you going, but the PAP's immigration policy is like taking 15 cups of coffee a day overworking your adrenal glands to the point of exhaustion- our housing market is over-heated, our structural unemployment problems severe, our income gap is terrible and the ordinary Singaporean is asking what the hell is going on here. The PAP pandered to the demands of businesses for cheap labor at the expense of ordinary Singaporeans - somehow along the way they forgot Singapore still conduct elections and the people left behind in their policies get to vote. Now that the general election has to held next year or the year after, it is time to say sensible things:

"Singapore must manage the inflow of foreign talents as well as other immigrants to ensure that Singaporeans do not lose out but rather benefit from their presences, SM Goh said yesterday"
- Straits Times 6 November 2009[Link]
So what has the PAP govt done in the past 10 years when it comes to foreign immigration? Did it take them more than a decade to realise that immigration policies have to benefit ordinary Singaporeans not just businesses who want to lower operating costs? Coincidentally, realisation comes when they need to hold elections in coming months. Most Singaporeans are wage earners and a large number are low wage earners whose income in real terms have fallen as the cost of living rose. The task now is to say sensible thinks and talk away the pain of the past few years by saying soothing sensible things and making token efforts to moderate their immigration policy. However, there is real risk that the habit of drinking 15 cups of coffee a day will return after the elections and that habit might worsen to 20 cups - so for ordinary Singaporeans, while the PAP suddenly say and do sensible things, it is not the time to be swayed but to hedge your risk by making sure they continue to say and do sensible things after the elections. Otherwise, the insanity of the next pay hike for ministers, GST hikes and the idea that we can just 'live with' the high income gap will simply return after the elections. Unless we do the right thing, we will allow this govt to fall back to its old habits and much needed change will never come.

Friday, November 06, 2009

Can Raymond Lim survive the rush hour MRT?

The best way to know if the public transport system is good is not to read the statistics from SMRT or SBS Transit but to take the public transport and experience what it is like during the rush hour.

I don't think the sardine can, armpit smelling stuffy experience can ever show up in any of the stats. We may think of Malaysia as being behind us in everything but they have one minister who doesn't just look at statistics...
M'sia's Transport Minister joins morning rush

He did it to better understand commuters' problems.
Fri, Nov 06, 2009 The Star/Asia News Network
KUALA LUMPUR, MALAYSIA - Transport Minister Datuk Seri Ong Tee Keat joined the morning rush on the KTM Komuter and Light Rail Transit (LRT) systems to better understand commuters' problems. He took the KTM Komuter from the Bank Negara station to KL Sentral, then boarded the LRT to Bangsar. During the ride, Ong spoke to passengers and listened to their feedback on how to further improve the urban public transport system. At a press conference later, Ong said the waiting time for LRT trains will be reduced from three minutes to two once six new trains became operational next month. Ong added that another challenge was to cut the KTM Komuter waiting period. --The Star/ANN

Thursday, November 05, 2009

HDB 'suffers' another deficit ...

HDB released its annual report which shows a deficit of $2B[Link]. That is twice as much as last year. Yes, HDB has 'suffered' yet again.

According to Today,

"HDB said the huge deficit for the financial year ending March was due mainly to more flats being sold. These flats are highly subsidised by the government. Higher construction costs also led to the large deficit. Other reasons that contributed to HDB's loss included upgrading works for lifts and rental flats." - Today

The main reason for HDB incurring a deficit is because all you guys who bought flats from HDB at those record high prices have 'enjoyed' a subsidy. You 'enjoy', HDB 'suffers' and you ought to be thankful.

If HDB incurs the deficit, who makes the surplus? HDB purchases its land from the Singapore govt via the SLA. The land from SLA, acquired or originally owned by the govt, is sold to HDB at the 'market price'. If you want to know where the surplus went to, you should look at the SLA. HDB's deficit is just an accounting gimmick. If SLA is part of HDB, HDB will show a surplus. If land is transferred by the State to HDB at the cost it was acquired, HDB will show a surplus.

At the end of the day are Singaporeans supposed to be impressed and thankful for HDB's 'deficit'? The truth is asset inflation has caused the average Singaporeans household to be heavily in debt shouldering housing loans that last between 20 to 30 years in an economy that provides little job security. Many Singaporeans will not be able to retire well because of the high cost of housing. HDB's 'deficit' is yet another sad spin of a govt whose policies have led to high financial burdens for its citizens. The pain for some Singaporeans cannot be spun away just like that - 7.5% of households with HDB loans have defaulted on payment...that in 1 in 13[Link]....that is not counting the many who struggle by scrimping on necessities to make payment every month.

Tuesday, November 03, 2009

Stocks fall sharply around the world....

UPDATE: I posted that value investors with cash might be drawn to buy in the market. Coincidentally, it turned out the greatest value investor, Warren Buffett, chose to make one of his biggest investments yesterday in a railway company. His purchase halted the slide in the futures market and reversed the losses in commodities, oil and gold. I invest most of my money passively for the long term but late last year pro-actively invested a small sum of money. I ended up with quite a few stocks to sell and I had to do it a bit more optimally so I look at more data than I usually do these days. A few things I noticed in recent weeks:

1. In the past 2 months, the market would rise until the middle of the previous month steadily with many consecutive up days until the middle of the month. Then it comes down stringing together down days until the first week of the next month. In the first week of the month, the market comes under heavy selling pressure until about the middle of the week, it then reverses and move up.

2. The KLCI (Malaysia) is considerably less volatile compared with Hang Seng Index and STI. Doing a delta of the returns between STI and KLCI, you can estimate the activity of hot money moving in and out of the market ...the KL stock market attract fewer hedge funds and short term money than ours. Yesterday the KLCI rose and the STI fell probably due to hedge funds forced to sell when the US$ carry trade was disrupted. The HSI fell a lot more.

I can't jump into conclusions with just a few observations but can make a few interesting guesses. I think there is a lot of mechanical trading or algorithmic trading going on the markets these days many short term traders use fixed rules to execute their trades. Perhaps these systems and rules come together and result in a some kind of pattern. Markets are supposed to be random - you shouldn't see so many consecutive down days or up days but I notice in this 7 monthrally such short runs are common. The talking heads on CNBC will attribute it to some change in economic fundamentals but I think they are the result of short term strategies and trading systems. Collectively, they will sell after the market moves up for 1.5-2 weeks, then buy after the market move down for 1.5-2 weeks.

I can really say for sure....but will we see the market start moving up for 1.5-2 weeks from today? In any case, I've been selling my stock in batches after mid October. ...even if the market moves up, it will probably turn down near the October peak.

Just my 2 cents worth. I'm not a professional. Take what I say with a pinch of salt.

-------------Original Post------------------------------
Right this minute stock markets that are still open are seeing a sharp sell off.

Very interesting trading pattern has occurred for the DOW- it surged up 200 points last Thursday, fell 250 points on Friday then rose 76 points yesterday in the most volatile 3 day since last year's crisis. US stocks have fallen steadily for 2 weeks before this 3 day period. The VIX index which measures "fear in the market" is at a high for the year. The Dow futures which anticipates how the Dow trade tonight is sharply lower at -100points.

It is almost certain the DOW will open sharply lower and will be under tremendous selling pressure. This will put to the test the hypothesis that there are billions in cash waiting at the side to enter the market because stocks rose too quickly and many funds were 'left behind' missing out on the rally. The high level of fear will definitely attract long term value oriented funds which like Buffett invest when they smell fear. One sign that a market has bottomed in an intermediate move down is for the market to open sharply lower and move up from there and perhaps close positive. The selling pressure when the DOW opens tonight is tremendous given the US$ carry trade is disrupted again as all currencies have moved down vs the US$.

It is equally likely for the market to sell off, rollover and stay down.

Jim Jubak pointed out in his column a week ago that such a pivotal day will come and put the market to a test.

Monday, November 02, 2009

To PAP : You need better MPs...

The letter below did not make it to the Straits Times forum. It appeared briefly on Today's website. A grieving father who lost his son in a naval accident one month earlier went to a meet-the-people to seek help from an MP to delay the enlistment of his 2nd son was shocked to hear these words from the MP:

“What traumatic? After two months, you won’t be traumatic.” - MP

With the next elections coming, you will begin to hear about PAP's new candidates. Typically they pick people with successful careers in the civil service, GLCs, SAF, universities and occasionally high flyers in the private sector. These are 'safe selections' who are part of the establishment and the best people to preserve the status quo. These are also very busy people with high positions in their corporations and little time for the MP role. If they get elected, they usually serve as part-time MPs. In a number of interviews with the media, PM Lee also said that these people are 'reluctant' and had to be persuaded to join politics. The MP allowance had to be raised to $20+K a month to make it worth their while. But I suspect many would rather not serve as MPs given their successful careers elsewhere and the financial rewards they get from their full time jobs. Is the ability to climb the corporate ladder a good measure of their ability to serve the people and bring about change and progress in Singapore? With the elections coming, many people that the PAP likes to select are keeping their fingers crossed that they won't be called up for those tea sessions. It is hard to say 'no' when they pick you and if you decide to go ahead, you'll have to squeeze the MP job into your busy schedule. Many of these MPs who have been parachuted into parliament via GRCs may feel little passion and energy for their MP job.

What makes a good MP? ...hmm...someone who really wants the job. Someone who really wants to serve - his MP role must be the number one priority in life not some big profitable contract at his corporation. I want to show you this clip of Low Thia Kiang speaking during the debate on the critical issue of CPF reform in Singapore.

I put up this clip not to show the standout performance of MP Low on the issue of CPF reform but the empty seats behind him. I don't know who those MPs are but they were too busy to turn up when such an important issue was discussed in parliament.

Lawrence Loh is right to point out that a good MP needs to be caring, have good EQ and interpersonal skills. Above all that he must be willing to put in the time and effort into his work - all that takes passion and requires an MP to prioritise his MP role above everything else. If the PAP can't find people with the right qualities and continues to give us part time MPs busy with their own careers, Singaporeans may have to consider voting for people from somewhere else up the quality with competition.
By Lawrence Loh
It started with MP Seng Han Thong being set on fire. Then came MP Denise Phua who was threatened by a rag-and-bone man. Now it is MP Cynthia Phua who was subjected to a display of violence by a constituent.
Although these incidents are disturbing and a cause for concern, I wonder whether the constituents are solely to be blamed. Allow me to relate my personal experience. In February 2001, my older son died in a naval accident whilst serving National Service. In that year, my younger son was due for enlistment. A friend, a very active grassroots member, suggested that I approach my MP, for help in exploring the possibility of getting an exemption for my younger son. I was reluctant but he went ahead to fix an appointment for me at the Meet-The-People Session (MPS). I subsequently relented and he accompanied me there.
It was in March 2001. That was my first appearance at a MPS, and it was to be my last.I waited until midnight before I could meet the MP. Prior to this, he was given the case paper which detailed the objective of the meeting and the circumstances of my case.When I entered the room, his first remark was “Yes, what can I do for you?”. There was no attempt at offering a word of sympathy or condolence. I then related my situation and said that both my wife and I were very traumatised. His next remark was:“What traumatic? After two months, you won’t be traumatic.”. With that, I decided to end the meeting. And with that, my respect for him hit ground zero. I was too stunned and grief-stricken to react.

Someone who was less-controlled and less-measured than me could have flown into a rage and become violent.MPs are elected or appointed to serve the constituents. People who attend the MPS are those who have real problems and need help. In a lot of instances, they are stressed, distressed and troubled. What they need is a caring soul, a helping hand, a gentle voice, and words of hope and encouragement. To dispense these, MPs need good interpersonal skills and a high EQ. Arrogance, a patronizing, chiding and belittling attitude, aloofness and lack of empathy will only trigger acts of rashness and violence. Many of our politicians have a high IQ, some are scholars. However, a high IQ is not the only attribute needed in a political career. A high EQ is equally, if not more critical, especially when it comes to dealing with the constituents.In my case, I would have felt good if my MP could have been a warm and caring person. If he could have been empathetic, consoling and helpful. All these qualities can only come from the heart, not from the mind. How many of our MPs can stand up and be counted for this?

Sunday, November 01, 2009

CPF & Retirement....

The other day someone asked me what I thought of CPF Life. The person is a graduate but can't figure out which is the best option in the scheme and what is needed for retirement. I jokingly told him that the best retirement plan is to have filial children and if they are not filial there is something known as the Maintence of Parents Act which forces children to take care of their parents. The govt has spared no effort to move the burden of retirement to individuals and their families. However, do all these result in an improved quality of life for retirees? The govt makes all these moves to shift the burden of retirement to the citizens but it refuses to do 2 important things that will significantly improve the financial situation of retirees. The 1st is providing affordable public housing - today Singapore's public housing, the most expensive in the world, causes individuals to be burdened with housing debt that takes 25-30 years to pay up limiting their ability to save for retirement. High cost of public housing has the the subject of much discussion on the Internet and newspaper forum - the govt has decided to little about it except to blame Singaporeans for being choosy and having unreality expectations when it comes to public housing. There has been enough talk about the cost of public housing so there is no need to discuss this further.

Singaporeans are uncertain if CPF Life is enough for retirement because they don't guarantee the payout and it is not clear what the inflation rate is going to be like in the coming years - it does not ensure that the payouts are sufficient if one takes into account inflation. The PAP govt locks up our CPF money giving us a fixed rate of 2.5%. We are told that this is risk free. This is not true. Money loses its value due to inflation and locking it up at a fixed rate means that your retirement is vulnerable to inflation. Based on figures from the World Bank, between 1961 and 1995, real compounded returns for Singapore's pension fund were 1.5 per cent a year, compared with South Korea's 5.4 per cent and Malaysia's 3.2 per cent. Based on those returns over the period 1 pension dollar in Singapore grew to $1.6 compared with $2.6 in Malaysia and $5.9 in S.Korea. In other words, the portion for their income Singaporeans have to set aside for retirement is roughly double that of Malaysians and about 4 times what the Koreans put aside. Returns on funds is more important that % of income put aside for retirement. Locking Singaporeans' retirement funds in low fixed return scheme puts Singaporeans at risk of inadequacy and a degraded the quality of retirement. Why can't the govt puts our CPF money in the hands of the best managers who can give higher returns as in other countries? A large number Singaporeans have low income and depend on CPF for retirement. They are now told to work longer and postpone their retirement (until after they die?) ...Singaporeans already live in a society with the largest income gap among developed countries and the CPF perpetuates this inequality through the retirement years by pushing responsibility onto the those who have the least ability to shoulder it. Where does the 2.5% return come from? The GIC borrows our CPF funds the low interest rate and uses it for its investments - the GIC claims it makes a long term average return of roughly 6% most of which it keeps as reserves.

Is CPF Life sufficient? It is just another tweak to a scheme with fundamental flaws.