Monday, August 31, 2009

The Japanese vote for change and uncertainty....

Many voters said that although the Democrats are largely untested in power and doubts remain about whether they will be able to deliver on their promises, the country needs a change. "We don't know if the Democrats can really make a difference, but we want to give them a chance," Junko Shinoda, 59, a government employee, said after voting at a crowded polling center in downtown Tokyo. - AP Report Japanese election upends long-ruling party

The Japanese people culturally do not like change so it is very dramatic to see them vote out the LDP after 54 years of continuous rule. The electorate did send a strong signal in the 2003 elections when there was a significant swing to the opposition Democratic Party. However, bogged down by entrenched vested interests the efforts to bring about change foundered. It was more about the LDP getting thrown out than a viable vision of change from the Democratic Party. The Japanese people are well educated and they are not so easily swayed by the Democrats which embraced a more populist platform, promising handouts for families with children and farmers, a higher minimum wage, and to rebuild the economy. The Japanese govt has an enormous public debt to tackle spending more money and giving more handouts is a promise that is hard to keep. The Japanese have simply lost patience with the LDP and they know that change will be limited given LDP is contrained by its pro-business and conservative ideology.

Japan's main problems are its ageing population and export-oriented economy highly dependent on external demand. Even though the Democratic Party is going for change and very determined to solve these problems, it will not adopted short term, short sighted and easy solutions like opening the floodgates to foreigners just to fix the demographics. They know that importing people in a large scale will cause overcrowding, cost of living to rise and wages to be depressed. The income gap in Japan is already widening and going for such short sighted solutions will hurt a large segment of the population. The Democratic Party has proposed to ease the burden of families having children by promising to US$275 a month per child through junior high to boost the fertility rate. There is only one way to fix the Japanese economy - boost domestic economy[Link]. The export oriented model is dependent on foreign demand which is slumping and faces intense competition from developing countries. Due to the competition, Japanese exporters have been relocating their factories to cheaper countries causing unemployment to soar to 5.7%. They need to deregulate and reform policies that hinder competition to encourage growth in domestic industries something the LDP couldn't do due to entrenched interests.

It is not clear if the new govt in Japan will succeed or fail. What is clear is they will give alternative ideas a try and that is good enough for the Japanese people who are fed up with the LDP's inability to implement meaningful changes. Some credit has to be given to the LDP for not resorting to undemocratic and unfair tactics to remain in power to preserve the status quo - they did not tinker with the electoral system, change the constitution, repress their opponents, control the media and remove the freedom of ordinary citizens to assemble and speak.

Sunday, August 30, 2009

What happens to people who fall through the cracks....

"There is no free healthcare in Singapore and her late husband's medical bill left her destitude....."
- AFP Report Feb 2009.
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This is the human face of suffering in Singapore ......a consequence of PAP policies...an outcome that I refuse to accept.

video

Saturday, August 29, 2009

Why the LDP is likely to lose the elections.

The LDP of Japan which has held power in Japan for 5 decades looks set to face almost certain defeat at the polls this weekend. Found this short paragraph explaining how LDP lost the support of the people and why the Japanese people are no longer grateful to the LDP which helped to transform Japan into an industrial giant after the war:

What went wrong for Japan's LDP?


"Working closely with bureaucrats and the business sector, the LDP-led government delivered high growth, ample jobs and a steep rise in living standards. But cracks emerged when the bubble burst in the early 1990s. There was a general feeling that the LDP was losing touch and that it wasn't delivering for everybody. Jobs were no longer for life, a gap emerged between rich and poor (Singapore has a bigger gap) and demographic change posed a challenge. Women were having fewer babies (Singaporeans are having even fewer children) and the population was ageing - with serious implications for social security.
Reform was needed but the close bureaucratic and business links that had benefited the LDP also served to constrain it (The PAP govt has even wider links to GLCs & businesses than the LDP). Efforts foundered in the face of entrenched vested interests (whose interest has the PAP been serving? Economic stake holders or the citizens who vote
). Part of the problem was that the LDP was slow to get things done, because it was trying to keep a variety of interest groups happy."

The lesson here is very simple. To win and maintain the support of the people, govts have to serve the interest of the ordinary citizens and nothing else. Once a govt becomes entangled and its interest becomes diversified it risks losing support.

Thursday, August 27, 2009

On gratefulness and appreciation....

The first salvo was fired by a Canadian PR asking Singaporeans to be grateful. The next one was fired by Juliet Chua in a forum letter [Shame on you, young bloggers] berating young bloggers for being ungrateful and unappreciative and writing negative articles about the govt. This was followed up by The New Paper which quoted a number of different sources:
These people got it wrong associating criticism of the govt with being ungrateful. Most bloggers criticise the govt for one of the following: the economic inequality, high cost of living, the lack of adequate aid for the poor and old, the lack of a minimum wage for the low income and negative impact of imported labor on a large segment of the populace. Few of us are asking for these improvements for ourselves and I believe many bloggers who criticise the govt do it out of sense of justice and desire to make Singapore a better place for Singaporeans. I will tell you why these are the truly grateful people in Singapore....and who are those who ones who have really forgotten and forsakened those who held them up.

The current generation of old folks are those who were children during the 2nd World War and they were not well educated but industrous. They grew up in poverty but worked their way up to become the No. 1 workforce in the world during the 80s. It was this workforce - one that never went on strike, one that accepted 3rd shift work, lower wages, tough work and longer hours - that got Singapore to where it is today. They contributed in a big way to Singapore's success that is why many young Singaporeans, myself included, are grateful for their sacrifice. That is why I feel that they should have a graceful retirement rather than made to work in their golden years. That is why it pains me to see aged Singaporeans digging dustbins for aluminium cans. The PAP leaders seems to have forgotten the contribution of this group of people asking them to work longer and hard even when they are frail and weak...denying them sufficient assistance [Link].

I'm grateful to the thousands of Singaporeans who work as cleaners to keep Singapore clean, the drivers, the clerks, etc, who are the backbone of our economy. That is why I strongly believe they deserve a decent wage for doing a full time job - they cannot be left struggling as the cost of living goes up and their wages go down. We cannot keep importing foreign labor to depress their pay so that businesses can redirect their costs towards paying for higher rent, higher utilities, higher fees for govt services etc. It is because young bloggers are appreciative of this segment of our population (now living in poverty and struggling to make ends meet) that is why we write negatively about govt policies such as the FT policy that will hurt this group of Singaporeans further.

So who is it that is ungrateful and unappreciative of Singaporeans? These men have also put their bets on progress being possible only if they open the floodgates to foreigners - creating an unlevel playing field for their fellow Singaporeans [Link] and forgetting the sacrifices Singaporeans have made to serve the country. These men have created an inequitable system with a huge income gap that puts the many Singaporean families at risk. At the same time, they have paid themselves the highest salaries in the world for their profession. Why should we show them gratitude when they have shown none for ordinary Singaporeans?


Tuesday, August 25, 2009

Confusion over EQUALITY....

"No. You suggest to the Malays that we abolish the (Article 152) provisions in the Constitution, you will have grave disquiet" - MM Lee response to Viswa


I was a bit confused over how MM Lee could have linked the call for greater equality with the removal of rights for Malays under section Article 152. I always thought the extra help and protection for minorities who may be disadvantaged due to discrimination by a majority race can help to level them up and bring about greater equality. Anti-hate laws and affirmative action for minorities in other countries such as Native Indians in N. America and aborigines in Australia serve to bring about greater equality and is consistent with equality being a goal that a society aspire towards. I think MM Lee views equality narrowly as 'equal treatment' rather than a social goal. As the economic inequality between various segments of society grows, we need to bring back govt commitment to greater equality. Whether our pledge is an aspiration or ideology, greater equality is a worthy goal especially when we are seeing both poverty and conspicuous consumption (the French cooks among greater mortals?) are growing at the same time. NMP Viswa's speech in parliament is a timely reminder to do what is right for Singaporeans.

Here NMP Viswa's reply to MM Lee:

Saturday, August 22, 2009

The Problem with Housing ....

A friend of mine who got married last year and has been looking for a home in the resale market told me he has given up looking. The COV sellers are asking for is just too high and being financially conservative, he & his wife would rather squeeze in a bedroom in his parents place than to be deep in debt. He still hopes to get a flat via the HDB balloting but that is like winning lottery these days.

"Providing Affordable, Quality Homes" - HDB's Role

One of the words frequently abused in Singapore is affordable. Affordable?...What does it mean? After rising something like 35%-40%, the word affordable can still be used. HDB was selling the most expensive public housing in the world before that sharp rise. Minister Mah keeps repeating this phrase "HDB flats are still affordable" based on the fact that 'most' people can pay for their monthly instalments. The simple trick to making the instalments small is to stretch the loan repayment period. This is not a good way of measuring affordability. Singaporeans shouldering high debt burdens in a 'hire & fire' economy (vs lifetime employment) has resulted in 33,000 defaulting (3 months arrears) on their HDB loans[Link]. That is 1 in 12 or 8% of HDB loans. In the height of the subprime crisis the 90-day deliquency of housing loans in US was less than 5%[Link]. How can the word 'affordable' be used on our public housing when it results in such a high default rate? The problem will be worse because the recent surge in prices means Singaporeans will have heavier housing debt.

"HDB flat still very affordable for average S'porean" - Article by Alvin Foo, Feb 18, 2008.

The other word I have an issue with is AVERAGE. You notice that I rarely use terms like such as "average income" in my blog. See, the word "average" is highly misleading because our income distribution is so skewed: the 2008 average household income is $6,800 but the median income $4,800[Link].
A 3-room flat goes for $250-300K on the resale market. $370-$400K for a 4 room flat and $470-$600K for a 5 room flat. Prices are still going up and you can expect transactions at higher prices because the COV has surged[Link]. It is quite remarkable since we have been in recession and facing anaemic growth for the next 1-2 years. The above letter attributes the rising prices to changes in our demographics - we have a large and increasing number of PRs and new citizens. HDB has not responded to the increase demand and Singaporeans have to pay higher prices for housing. Such high prices can only lead to higher default rates and more trouble ahead. The way for Singaporeans to avoid trouble is to buy a very small unit, say a 2-room flat or stay with their parents. A 2-room flat which is about 45 sq meters in size has one bedroom and a living room - one reason why some Singaporean couples don't have children is they don't have space for children. Singaporean workers will find it very hard to compete when their cost of living is so high....the only way to compete globally is to live miserably - small homes, late or no retirement, foregoing little luxuries and not having children.....life can only get tougher for Singaporeans...

Thursday, August 20, 2009

A time for change....

"Insanity is doing the same thing over and over again and expecting different results"
- Albert Einstein

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So we learn that our pledge is not ideology just aspiration. But you need an ideology to aspire towards the end goals. So what is this ideology? What does the PAP govt believe is right and wrong? The PAP does not have a stated set of ideologies but based on how it has been running this country - analysts have figure out a set of ideologies that guide their decisions:
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"...most analysts of Singapore have discerned four major "ideologies" of the PAP: pragmatism, meritocracy, multiracialism, and Asian values or communitarianism" - Wikipedia [Link]
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See....nothing about freedom, democracy,justice and equality. That is why when NMP Viswa moved the motion calling on the government to reaffirm its commitment to the principles enshrined in the National Pledge, it brought out strong reactions from the PAP MPs and ministers. MM Lee went so far as to say that Mr. Viswa's speech is full of "highfalutin” ideas and in that sense he was also saying that our pledge is full of "highfalutin” ideas. Highfalutin ideas that we tell our children to recite and believe in.
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I tell you why the pledge is important. Our forefathers were coolies and fishermen working on a colony run by the British. The British were the lords and our grandfathers were the servants. They worked hard in poor conditions earning what was seen as an unjust low salary while the British exploited the resources of Malaya as colonial masters. That is why equality is important. No Singaporean should again have to suffer what our forefathers went through - exploitation ...we ought to be able to assert our democratic rights to bring about justice and greater equality. The PAP never honored the pledge and asserted their own ideology and we have come full circle - our democratic rights eroded and our society have become so unequal a large segment of our population work full time but cannot make ends meet.
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The income gap and poverty are the results of PAP's ideology. Because they don't believe in equality, the income gap just got bigger and bigger over the years because the PAP is constrained by its own ideology when they look for solutions to this problem.
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Unless we treat our pledge seriously and believe in what it says, we will never have the society we want and our forefathers aspired to have. Just like what Einstein said, if we sit on our hands, vote the same way we always vote, and keep doing the things the same way we have done them in the past, the outcome is going to be the same - it is insane to hope for anything else.

NMP Viswa Sadasivan's Speech.

You can read the full 50 minutes speech here. I encourage you to read it to understand exactly what he said. There was very strong reaction from the PAP MPs and ministers.

" .....I think it is dangerous to allow such highfalutin ideas to go undemolished and mislead Singapore....." - MM Lee on Viswa's speech[Link]
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"I feel the noose above my head" - Viswa (today's New Paper).
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What was MM Lee upset about?
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"My colleague (Nominated MP Viswa Sadasivan) says we are trying to put square pegs into round holes. Will we ever make the pegs the same? No. You suggest to the Malays that we abolish the (Article 152) provisions in the Constitution, you will have grave disquiet. We start on the basis that this is reality: We will not be able to get a Chinese minister or an Indian minister to persuade Malay parents to look after their daughters more carefully and not have teenage pregnancies which lead to failed marriages. Can a Chinese MP or an Indian MP do that? The Malays will say to him: 'You're interfering in my private life.' But we (the Government) have funded Mendaki and Muis (Islamic Religious Council of Singapore), and they have a committee to try and reduce the numbers of such delinquents."
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Actually I read through NMP Viswa's entire speech and nowhere in his speech he directly or indirectly suggested that we eliminate article 152. All he did was say that having different TV channels for different races and "lost the opportunity to cross-fertilise through the media". I really can't find anything to evoke the above response from MM Lee. I believe in the long run the racial divide will narrow relative to the social divide - a poor Chinese will have more in common with a poor Indian than an upper class Singaporean Chinese. A Singaporean Chinese today probably feels closer to another Singaporean in the same social class than someone from mainland China. While we cannot do it today, race categorisation I believe will lose its importance in the future and we have to prescribe solutions based on social class rather than race.
There are many other interesting points NMP Viswa put across including the need for greater democracy and the need to eliminate "climate of fear that inhibited political participation". The need to bring youths back into the political process to reduce apathy and create a sense of belonging. He also highlight the need to tackle the problem if high income inequality and to look beyond GDP growth to reach the higher goal of happiness enshrined in our pledge.
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MM Lee said the speech is full of dangerous highfalutin ideas. Actually, the speech hightlights what is wrong with Singapore today and the real changes that will take us forward. In fact Viswa's speech is what our National Day Rally should have been. What is really dangerous is for our society to stick to MM Lee's old ideas, beliefs and false compromises.......that we can trade freedom for security, democracy for wealth and equality for progress. We are now on a trajectory where the growing divide is starting to tear apart our social fabric and the dangerous gaps we are seeing in our society will be our biggest challenges.

Wednesday, August 19, 2009

Sending the down and out to jail....

Nevermind we don't have the usual safety nets for the poor and unemployed as in other developed countries. We have many beaches where one can set up tent and try to get by until one's luck changes. So that is what some people think.....

"'I suggest you use a bicycle chain to tie yourself to a tree or you may lose yourself as well."
- Judge Saruwan making fun of the homeless person for losing his passport and IC.
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Here's a sad story about a Singaporean, Noor Mohammad Yassin Ismailm who didn't have a job and had to put up at East Coast Park. He was arrested by the rangers for setting up a tent without a license - see in Singapore you need a license for many things and if too many people become homeless and set up tent at East Coast they will probably implement a 'tent COE' to curb the problem. The judge fined him $800. Noor who was very skinny because he didn't have money for food couldn't pay the fine and had to go to jail for 4 days. At least his meals will the taken care of when he is in prison.

This is the cold hard justice you get in Singapore strict adherence to the law that does not factor in the fact that the circumstances that led this man break the law was outside his control.
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Home > Breaking News > Singapore > Story Aug 18, 2009[Link to story]
Jailed for living in illegal tent
By Sujin Thomas

HOMELESS and unemployed, Noor Mohammad Yassin Ismail pitched a canvas tent at East Coast Park in May, 2007, and lived there for almost a month - without a lease or licence to do so.He was discovered on June 26 of that year, after he was apprehended by park rangers.In court on Tuesday, Noor was asked to produce his Identity Card or passport but he said that he had lost both items. It prompted District Judge Mr Shaiffudin Saruwan to retort in jest: 'I suggest you use a bicycle chain to tie yourself to a tree or you may lose yourself as well.'Pleading for leniency, Noor, who is tanned and skinny, said that he seldom ate, only doing so if friends gave him food. He added that his mother is paralysed and looked after by a younger sibling, while an elder sister does not care about him.

He was fined $800 but could not afford to pay the fine so he was jailed four days instead. He could have been fined up to $2,000.

Temasek : Ho Ching to stay indefinitely....

"There's no push factor for the current CEO to step down"
-Minister Tharman [Link]
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"No push factor after a $50B loss? ...."
- Lucky Tan
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When they brought in Goodyear, we were told that Temasek has been looking for a successor for Ho Ching since 2005 [Link]. It took them 4 whole years to find Chip Goodyear who turned out to be unsuitable so Ho Ching will stay. Minister Tharman said yesterday that Temasek has "no deadline" to find a successor. That I say is one heck of an incredible story. Incredible that they took 4 years to find Goodyear, incredible that they conduct such a search without deadlines, incredible that Goodyear turned out to be 'unsuitable' and incredible that they expect Singaporeans to believe this amazing explanation.
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I think the opposition in Singapore must be celebrating. Yes celebrating. Why? After losing $50B of taxpayer's money and making horribly numerous ill-timed investments ( selling BoA at the market bottom etc), they now expect us to believe they bungled the selection of Chip Goodyear for Temasek CEO. The arrival of Chip Goodyear and Ho Ching stepping down provided some kind satisfactory closure for many Singaporeans after the torrent of bad news. Whether they genuinely bungled by selecting Goodyear or there are other hidden reasons, it has caused great damage to the govt's credibility . This is going an issue that opposition parties can exploit during the next election especially if Ho Ching continues to stay at Temasek.
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The whole saga, however, did not start with the recent losses. Singaporeans viewed the appointment of Ho Ching in 2004 with great scepticism - they found it hard to believe there was no better candidate for the job at that time. It was explained at that time that despite apparent conflict of interest, Ho Ching was so capable there was no choice but to appoint her. In 2006, she lost billions investing in Shin Corp. This was described as "a spectacular misjudgment" by Forbes magazine and would have caused a dismissal if it happened any other investment company. But Ho Ching stayed on after the govt defended Temasek for the Shin Corp purchase. The Shin Corp saga left Singaporeans feeling that there was a lack of acountability at Temasek - someone can just get away with a serious misjudgement that caused billions in losses. The hefty losses in US financial institutions was the straw that broke the camel's back. Goodyear's replacement of Ho Ching would have repaired some of the damage.....but they bungled that and for many Singaporeans that destroyed whatever trust (for Temasek) that remained.
Ho Ching staying on at Temasek will be a great liability for the PAP govt.

Monday, August 17, 2009

PM Rally Speech : What happened to the critical issues?

Our PM chose a nice shirt for his National Day Rally - deep red a better choice than, say, pink. His delivery was better than previous years. The "then and now" slideshow did bring back memories. However, the "jam-ban" i.e. wooden toilet he showed was far better than the one I used as a child. He spent plenty of time on the topic of racial and religious harmony and celebrating Singapore's glorious success. While racial and religious harmony is extremely important, very few Singaporeans have been directly affected by disharmony. We shouldn't take things for granted but I don't think we have a growing problem here. He did mention the Aware saga which is now closed and his concerns about tele-evangelism & mega-churches - so far mega-church leaders like Joseph Prince (original surname Singh) and Kong Hee have been really well behaved and primarily focussed on recruitment and expanding their religious enterprises.

In a recent programme on 938Live, Singaporeans called in to say that their main concern is the foreign talent policy and wanted the PM to address this during the rally. There was no mention of this issue and the very serious problem of high income inequality (correct me if I'm wrong..I went to make coffee & get some snacks but stayed for most of his speech).

On healthcare, PM Lee painted a rosy picture of how Singapore is admired for keeping cost of healthcare low per capita, low infant mortality and achieving better outcomes than countries that spend more. He mentioned the 3Ms (Medisave, Medishield and Medifund) provides universal heathcare. In the US, there is a healthcare debate being fought very hard by President Obama and the most serious problem in their system is the 47M uninsured people out of a population of 300M people that is 15% of the population. Do you know that 750,000 are uninsured in Singapore[Link]? That is about 20%. There are 100,000 housewives[Link] who are uninsured. Babies born with congenital problems, self-employed and folks with pre-existing conditions are also left out of Medishield. These people are at risk because once they get a serious illness they or their family will incur a sizeable medical debt.


The computer generated 3D Marina Bay fly through appeared to be the highlight of his speech and the IR being central to our plan to develop the Marina Bay. The IR is really a casino and while it is really nice to have a beautiful Marina Bay landscaped to perfection, it is just a magnificent facade to impress the vistors coming here. The truth is it does nothing for the growing number of Singaporeans living in poverty and many struggling to make ends meet. The same can be said of our PM's speech - nice shirt, excellent delivery, beautiful graphics but nothing about solving the serious problems many ordinary Singaporeans face....the ones that keep them awake at night and cause them to leave their beloved homeland to seek a better life elsewhere.

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http://news.asiaone.com/News/AsiaOne+News/Singapore/Story/A1Story20090816-161426.html


National Day Rally 2009 highlights
Prime Minister Lee Hsien Loong focused on four key issues in his sixth National Day Rally speech this year - the economy, healthcare, social harmony and shaping Singapore together.


Economy
On the economy, PM Lee said the eye of the storm had passed and GDP contraction of 6.5 percent in the first half of the year was not as bad as feared. Singapore's labour situation has stabilized, the third quarter 'looks alright', but the outlook beyond that is unclear.
He said we will see some job losses from restructuring, but as companies upgrade their operations, they will create new, good jobs to replace lost ones.
The Resilience Package introduced in January has worked and there was no need for a new prescription now, but the government will review this before the end of the year and decide what we need for next year.
PM expects the global environment to stay subdued for some time. He was optimistic Singapore can grow by serving niche areas, finding new markets and expanding our market share.
PM also singled out local companies that are doing well, such as Hyflux, and new business sectors, such as interactive digital media that is seeing a growing pool of talent. He said Singapore continued to attract multinational investments in high-end industries.
One key strength is the Singapore brand-name, which benefits local companies that venture overseas and gives overseas companies confidence to invest here.
As Singapore transforms the economy, our workers will need to adapt and upgrade themselves. The government will establish two national Continuing Education and Training Centres (CET) in Paya Lebar Central and Jurong Lake District.
He said the global economy will eventually turn around, and by then, Singapore will be all set to pick up strongly again.


Healthcare
PM said the government is gearing up our healthcare system to prepare for an ageing population. He noted the trend of older patients being admitted more frequently. After their acute condition has stabilized, they no longer need intensive treatment but are not well enough to go home.
He said the government is responding to these healthcare needs by putting in more resources. This includes new hospitals in old HDB towns (Khoo Teck Puat Hospital and Jurong General Hospital), and increasing the government health budget.

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But he said 'more' itself is not enough. Singapore needs to build up step-down care - community hospitals, nursing homes, general practitioners and home care. PM said the health ministry is working on upgrading home care to help caregivers.

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Another key step is to link up acute hospitals with community hospitals, so that once a patient has stabilised, he can move to the 'sister' community hospital and receive 'slow medicine'.
PM said the best way to keep health care costs down is to maintain healthy lifestyles. He singled out the Wellness Programme started by Minister Lim Boon Heng as an innovative scheme, which includes medical checkups, regular exercise and social networking, which will be expanded islandwide.
He also thanked healthcare professionals and all involved for their performing their duties under considerable stress in the fight against the Influenza A (H1N1) virus.


Racial and religious harmony
PM Lee said social cohesion was critical to our long term success, particularly racial and religious harmony. Singapore has made much progress in over the past 40 years in building a stronger Singapore identity and visitors are often astonished by what we take for granted.

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He noted the global trend of rising religiosity and that Singapore has also been carried along by this global tide. He acknowledged that religion was a positive force in societies, but warned against the risks of aggressive proselytisation, intolerance and exclusiveness by any religious group.

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Shaping Singapore Together
PM Lee showed the transformation Singapore underwent in the last five decades with a montage of pictures from the past and present -- from housing and community centres, to opportunities available and the Singapore Armed Forces.
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He said Singapore continues to renew itself by delivering a first-class education system, a convenient public transport for all, and creating green spaces and a vibrant city centre to make it the best place to live, work and play.

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Taking the audience on a 'fly through' video of the Marina Bay, he also gave Singaporeans a glimpse of what the centerpiece of the new city will look like in a few years.
PM said the way we celebrated the National Day showed what sort of nation Singapore is - our commitment to excellence, the ability to organize, mobilize and deliver results and the spirit of the people.
All this was epitomized in the Pledge moment, when all were united in one voice, saying what it truly means to be Singaporean

Friday, August 14, 2009

MM : Singapore now highly dependent on foreigners....

"Had we not had the foreign workers, more Singaporeans would have lost their jobs"
- MM Lee


"Singapore's current total fertility rate is 1.28, even lower than that of Japan (1.37), which too is facing an ageing and declining population." - MM Lee

"We need immigrants to make up for the children we are not having. This is a hard fact of life. Between the ages of 25 and 40, over 30 per cent remain unmarried" - Mr Lee.

Very sobering facts. Many Singaporeans have decided to stop reproducing. Many won't want to get married. Our MM Lee is telling us that so many foreigners are imported into the country because our fertility rate is very low.

MM Lee is wrong. Why? He uses the fertility rate today (1.28) to explain why we need so many foreign workers in Singapore today. The Singapore workforce today is not build (born) today but more than 30 years ago. You cannot use our low fertility rate today to argue that we need so many workers now because our workforce is today is dependent on the fertility rate 30-40 years ago! The fertility rate was 3.0 in 1970 but steadily declined to 2.0 in the late 70s and early 80s.

Using fertility rate argument, our need for foreign imported labor today is no more than say Canada, Italy or Switzerland. MM Lee is now pushing the blame for the large number of foreign workers on Singaporeans! He is now saying they are here because Singaporeans today refuse to have more children - he is saying it is all YOUR FAULT!!! The real reason why our workforce is not bigger today is due to PAP's gigantuan policy error - "Stop at 2"....the overzealous social engineering based on their own flawed belief 30+ years ago that the Singapore economy cannot support a larger population today. Now they have swung to the other extreme to expand the population.
The real reason for the large % of imported labor, more than almost anywhere else in the world, is to keep wages down so that rent, utilities, transport and other costs can go up. It would have been alright if we did it like Dubai where the indigenous population sit on top of the economic food chain while foreigners do all the work. The problem is a large number of Singaporeans are at the bottom of the food chain....crushed.

The strategy to import people and quickly convert them to citizens to rapidly expand the population today will mean the size of our elderly population will be huge 30 years from today - that will mean that there will be less resources to support each aged person when it happens. The PAP's shortsighted policies to import people to grow the economy quickly will cause numerous problems down the road that will hurt Singaporeans badly. Already we see the benefits of this policy concentrated on a small segment of our society the big businesses and landlords while the ordinary Singaporean has to face the pain of lower wages and higher cost of living (housing etc) leading to the high stress levels that is primary cause of low fertility[link, link, link] To hear that the need for foreign workers is now blamed on our inability to have and support more children per family is an insult - the PAP govt is now rubbing salt onto our wounds.

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Business Times - 14 Aug 2009
H1 would have been worse without foreign workers: MM

More Singaporeans would have lost jobs; immigrants vital to keep economy strong


By LEE U-WEN (SINGAPORE) Among those who lost their jobs in the first half of this year, many have been foreign workers, rather than Singaporeans. And among citizens and permanent residents, there were net job gains in the first six months of 2009, even though the economy shrank 6.5 per cent during that period, Minister Mentor Lee Kuan Yew said last night.


Speaking to his constituents and grassroots leaders at the Tanjong Pagar National Day celebration dinner, Mr Lee drove home the point that Singapore needs foreign workers so that the country can grow faster when conditions are favourable, and to buffer the shock when conditions turn.


In his speech, Mr Lee said 70 per cent of all foreigners in Singapore are here temporarily on renewable long-term passes, while the remainder are PRs.

'Had we not had the foreign workers, more Singaporeans would have lost their jobs,' he said.

'We need immigrants to make up for the children we are not having. This is a hard fact of life. Between the ages of 25 and 40, over 30 per cent remain unmarried,' said Mr Lee at the Tanjong Pagar Community Club. 'Those who marry are not replacing themselves.

'Singapore's current total fertility rate is 1.28, even lower than that of Japan (1.37), which too is facing an ageing and declining population. Latest figures show that in Singapore, Malays have the highest average of 1.91 children; Indians 1.19; and Chinese the lowest with just 1.14 children.

'If we do not have educated Malaysians, China Chinese, India Indians and others from the region, our economy will decline. Our labour force will shrink,' said Mr Lee.

'Without immigration, the ageing problem will be too heavy a burden for our young. Immigrants who can be integrated without upsetting the racial balance are in our interest.'

Turning to his views on the economy, which is beginning to show signs of a recovery, he urged Singaporeans to take a 'long-term view of our position' and not be short-sighted.'We are in a strong position today, our stability and efficiency is known throughout the world,' he said.

Citing one recent example of the overall level of investor confidence in the Republic, Mr Lee recalled how US oil giant ExxonMobil decided to pump in US$4.5 billion to build a steam cracker project on Jurong Island in 2007. The plant is scheduled to be completed in 2011.

'Their CEO Rex Tillerson believed demand would be there. But his board of directors were so surprised they were unwilling to believe this,' said Mr Lee.

'So he took an aeroplane to bring them all here, to meet with the prime minister and I. We spent one-and-a-half hours discussing the future of this region and Singapore's place. We took them to Jurong Island, and after that they agreed.

''US$4.5 billion is a vote of confidence in our future. Other MNCs will notice that and I'm quite sure when the financial crisis is over, we are going to get many investments,' said Mr Lee, adding that Singapore has many free trade deals with countries such as the US, Japan, India and China.'If we cannot grow, then there must be something wrong with us,' he said.

Thursday, August 13, 2009

The end to "run road" lawyers...

In Dec 2007, I wrote "Another lawyer run road". That article was about lawyers who ran off with clients' money deposited with the law firm for property purchases. The solution is actually quite simple - use cashier's order or deposit the money with an escrow e.g bank. Big law firms that handle millions prefer not to do this because they earn hundreds of thousands in interest when the money is in their accounts. The cases of lawyers running off with clients' money affects smaller less well known law firms more negatively than bigger ones. So it took a long time for a few simple changes to take place, but they are finally here:

I tell you why I'm only half happy with this....... The other issue is why are lawyers allowed to monopolise and set minimum prices for conveyance services (read the Law Society guidelines for conveyance fees) when such services can be provided by licensed conveyancers (who compete) as in other countries. Our lawyers are intelligent highly trained individuals and a precious resource in our justice system - they should be freed up from mundane tasks to do more important things. This price setting is completely inconsistent with other professions having no minimum price for service provided and having to compete with foreign talents from anywhere in the world. Our software developers don't fix prices for applications they develop . Our cleaners have to compete much harder than our lawyers. Why does our society have to feed and protect people who drive BMWs while others have to compete so hard to make ends meet?

Wednesday, August 12, 2009

Issues Singaporeans want PM to address during National Day Rally.

Today on 93.8Live, listeners were asked to call in to say what topics PM Lee should address during the National Day rally...I have provided the standard PAP model answers along with my own comments for each of the topics:

1. Why so many foreign talents? Are they really talents? Can we limit the number or implement Singaporeans-first policy?
The issue that cropped up most often among the callers was the Foreign Talent issue - about 70% of those who called in.

The PAP has standard answers for this question. Foreign talents help to keep the labor cost down. They take up jobs that Singaporeans do not want or don't have the skills for. Without them, businesses will go somewhere else in search of cheaper labor. We cannot implement Singaporeans-first policy because that will limit the flexibility of businesses to hire people. Imported labor keeps Singapore competive.

If you're not tired of listening to these standard answers, you can hear them again at the National Day rally when our PM speaks. At the end of the day, whether this policy is good or not good, it is how much it benefits the majority of Singaporeans who are workers rather than business owners. Before we go further lets put things into perspective - our foreign talent policy is not a normal one, it is a policy on steriods. The PAP govt carried the FT policy to its extreme with about 30% of our work force made up of foreigners higher than all developed nations. Such a high % makes us dependent on foreign labor and the policy irreversible because of this dependence.

Importing cheap foreign workers in such large numbers result in many distortions. We are told that it is necessary to get cheap labor to keep Singapore competitive. This is not true. Singapore is an expensive place to do business high rent, high utilities (2nd highest in the word), high cost of transport (ERP, COE) and high cost of various govt services. To keep the total cost of doing business contained, cheaper labor is imported to keep this component of cost down so that the rest of the cost can remain high. Much of the rented space is owned by the govt or its GLCs that benefit from the high rent. The distortion is quite incredible - a foodcourt where each stall can cost $8000 to rent per month and the income of cleaners there can be as low as $600/month. Very few countries suffer from such a huge rent-income differential (if you know, tell me).

This policy has hurt a large segment of the population. It has caused structural unemployment among older workers who find it hard to get a job because employers can always import younger workers. It has worsened the income gap and increased poverty in Singapore.


2. Is it possible to have a minimum wage?

The PAP standard answer for this is it will cause unemployment and cost of business to go up. Their standard alarmist answer is businesses will pack up and run away.

My view is the PAP has pursued policies that caused the income gap to balloon and a large segment of the Singaporean workforce to have such low wages that implementing a minimum wage will cause problems down the road. The PAP has created a situation that makes it hard to implement a minimum wage because we have an economy with so many low wage workers. Full explanation here.

3. What will the govt do for the old? What can the govt do for the poor? Safety nets?

The standard answer is govt cannot afford to take care of the poor, old and sick. The govt cannot afford safety nets. If it implements schemes to help people in need, it will have to resort to higher taxes. It is better to rely on philanthropy and charities (such as RenCi & NKF?) to take care of the underprivileged (Read PM Lee's speech on this idea here).

It is not true that taking care of the weakest in our society will result in higher taxation. For a start, taking care of the old and sick probably only requires our existing annual budget to be properly allocated to where it is needed most rather that other forms of spending such as grand buildings, rebranding campaigns and overspending in other areas. Talking about taxes what happened to the $5B surplus in 2007 from the GST increase that was meant to help the poor - maybe just doing what it says, the govt can go a long to solve these problems. The strange thing I observe is Singaporeans like to migrate to countries with higher taxes,minimum wages and more comphrensive safety nets. ....why?..

On Sunday I suggest you tune in to the live broadcast of the National Day Rally. Listen to what PM Lee has to say and think hard about the issues. As a citizen, it is your responsibility to do so because at the end of the day, you have to cast a vote to decide on your future and your children's future (not the best estate upgrading plan). You have to decide if the PAP govt has the right solutions for problems Singaporeans face or a better solution is possible. You have to decide if the PAP govt puts your interest first or does it put other interests above that of ordinary citizens. If PM Lee drowns us with the worthless standard answers that we have heard so many times, he won't be worth 1% of the $3+M we pay him every year.

Monday, August 10, 2009

"Pledge moment unites Singaporeans " - CNA

"It's very meaningful to unite everyone together, especially in this downturn like now....it's more important that everyone stays united as one people, one nation"
-Sheng Siong Supermarket's corporate affairs manager, Tan Ching Fern
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8:22pm yesterday hundreds of thousands of Singaporeans recited the pledge and renewed their commitment to Singapore. This is a serious but also a strange moment because it was organised by a govt than has in the last 4 decades turned Singapore from being one of the most democratic societies among east countries to one of the least democratic developed east asian countrie - just compare us with Taiwan, Japan, S. Korea ...even Hong Kong, Indonesia, Phillipines and Malaysia. Many of these countries went from martial law under dictators to full blown democracies with freedom of the media and rights of the people to assert their power restored. What happened to this promise of democracy? Singapore today is known for jailing and bankrupting people who fight for democracy and assert their rights as citizens , running elections based on estate upgrading and a media ranked among the lowest in press freedom. Equality too has taken a beating. While a small number of elites have rewarded themselves with the highest salaries in the world and its network of GLCs, many of which are monopolies, dominate the economy, many Singaporeans now find it hard to make ends meet. At almost every National Day rally they will blame this economic inequality on an ageing population[Link], I just want to remind everyone when they hear it this year that Japan's population is ageing much faster and Taiwan[Link] & S. Korea are also facing an ageing population yet the income inequality is half of ours.
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8:22pm yesterday was a very meaningful moment for many Singaporeans because it reminded them how far this nation has strayed from its promise and how Singaporeans must now work together to restore democracy and equality. Many have been busy making money and have forgotten what they have pledged to this nation. The time has come for us to fulfil this pledge rather than just reciting it. To fulfil this pledge we need men and women who believe in it and will lead us towards our promise for Singapore.

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The Pledge Moment unites S'poreans in one voice

SINGAPORE:
Time stood still in Singapore at exactly 8.22pm on Sunday when tens of thousands of Singaporeans at home and abroad took time out to recite the national pledge.
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The "Pledge Moment" was a symbolic gesture to get the nation thinking about what it truly means to be a Singaporean on the country's 44th birthday.
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Singapore's national public warning system sounded its chime signal at 8.22pm islandwide, signalling the start of the Pledge Moment.

With that, thousands of Singaporeans across the island joined the 150,000 people at downtown Marina Bay - where the National Day Parade was taking place - to recite the Pledge.
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As the parade was being beamed live on giant screens from two of the newest malls along Orchard Road - Orchard Central and ION Orchard - Singaporeans stood at attention and with one hand on their heart, the words flowed...."We the citizens of Singapore......"
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At train stations and heartland supermarkets, pockets of people dropped what they were doing and for 30 seconds renewed their commitment to a country they call home. A supermarket at Bedok North, a suburb in the east, was one of the many retail outlets taking part in the Pledge Moment. The supermarket staff got into the National Day mood by giving out flags to shoppers and encouraging them to stay back to recite the Pledge. Sheng Siong Supermarket also took part in the Pledge Moment. "It's very meaningful to unite everyone together, especially in this downturn like now....it's more important that everyone stays united as one people, one nation," said Sheng Siong Supermarket's corporate affairs manager, Tan Ching Fern. Words flowed easily for some, but for others it took some prompting to recall words that were probably last spoken when they were in school. "To all Singaporeans, since primary school days they have been saying the Pledge. For me, I'm not schooling anymore. So in fact, this brings back some memories," said a member of the public. "This is very good - because everyone celebrates with Singapore," said another. "Singapore's birthday is actually our birthday..." said a third. Truly, the pledge recital was a historic moment when Singaporeans were literally united in one voice. - CNA/ir

Saturday, August 08, 2009

Happy National Day!

30 years ago when I was a little boy, I heard my parents quarrelling in their bedroom. My dad had applied for and received a job offer in Australia and he wanted to moved the whole family there. Singapore was then a relatively poor developing country. My family lived in a kampong and we did not even have toilets with a flush. We were so poor entertainment was at a neighbors home because there were only 2 black and white TVs in the whole kampung. Saturday was a day we looked forward to because that was when Tarzan (starring Johnny Weissmuller) was on TV. My dad wanted to move the family to Australia because Singapore's economic future was uncertain. We were a young nation that had existed for just over one decade and our fate was unknown. While the economic reasons to leave were compelling, my mom had stronger reasons for wanting to stay. Since my grandparents came to Singapore 2 generations ago, ties we formed in Singapore - among relatives and friends - were far more important than the economic gains to had if we leave. While we faced an uncertain future, we were not facing it alone in Singapore and we have people here who would never let us down and that was the reason we stayed and chose to remain as Singaporeans. Other countries can offer you better weather, better pay, better opportunities and bigger homes but they will never be able to offer you people who will care deeply about you. We were poor but we never had to feel poor because the relationships we had with other Singaporeans enriched our lives.

."We the citizens of Singapore, pledge ourselves as one UNITED PEOPLE...."
- Singapore Pledge.

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The bonds we formed with our fellow Singaporeans is the thread that is weaved to form the fabric of our society. It is this fabric that unites us as a nation and make us one people. It is people caring for each other and not just for themselves. It is how much the well being of your fellow Singaporeans matters to you. In the Singapore Pledge, the first thing we pledge ourselves to be is one united people because without this unity nothing else will matter. Today we celebrate 44 years of nationhood. Are we more united as a people than we were 20 years ago?

The other day our esteemed SM Goh spoke of 10 challenges facing Singapore. Most the challenges he mentioned was about the economic well being of Singaporeans. While these are important, he forgot one challenge for us as a nation - how to remain united and keep increasing the unity among the people? Today this unity is strained by many gaps in our society - the income gap, gap between the leaders and ordinary Singaporeans and the gap due to immigration where large number of citizenships are given quickly to people without a common shared experience. We cannot forsake unity for fast economic growth and we cannot make a large segment of our society shoulder the burden resulting from the aspirations of the few. That is not the way to unite a nation - it is not they way to stay together as we move ahead. Every year more and more people are left behind and they are left further behind as we continue with the same policies as the past 2 decades. Going forward, we cannot expect a different outcome doing the same things the same way.
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"....pledge ourselves as one united people,regardless of race, language or religion,to build a democratic society,based on justice and equality...." - Singapore Pledge

The purpose of being one united people is "to build a democratic society based on justice and equility". On this unity rest the purpose of our nationhood. We, as a people who were formerly controlled by colonial masters, want a democratic society so that our voices will be heard and we can become the masters of our own fate. Our collective interest addressed based on priciples of justice and equality. We are not a corporation in which the people who have the most money have the greatest control - everyone's interest matters because among our forefathers were coolies and the poor who labored hard to build this nation.

Today is our 44th National Day. We are still a evolving young nation and we can still choose how we want to go forward as a nation - whether we uphold the ideals in our pledge or we forget those ideals for short term gains. We can stick together and succeed or let the self interest of a small segment of our society widen the gap in our society and tear our nation apart.

When we recite the pledge at 8:22pm today, we should recite it with sincerity and an understanding its truth meaning.

Happy National Day!

Thursday, August 06, 2009

Buffett Vindicated!

During the crisis, Buffett faced strong criticism for selling puts on stock indices[Link], writing an op-ed calling a buy on the market in Oct 2008[Link] and his purchase of Goldman preferreds. Critics said he lost his touch[ Has Warren Buffett Lost His Touch?]. They were all wrong. Buffett was right, right and right. Those big bets will give him the best quarter ever in at least 2 years.
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'[Buffett] has a different view. He has to give returns to his investors year by year. We don't have to. We have to think in terms of the next 10, 20, 30 years. We are buying into something which we intend to keep for the next two, three decades and grow with them.'
- MM Lee

MM Lee got it wrong. Buffett's time horizon is actually forever - whatever he buys, he has the intention to keep them for as long as possible. What Buffett has to do is meet his shareholders ,20,000 of them face to face, every year at the Berkshire annual meeting and answer every single legitimate question they have which is something GIC does not do for its shareholders. Buffett publicly admits all his mistakes and take responsibility for them which is another thing the GIC has never done. All his investment moves are disclosed and that has never hurt his performance while GIC keeps many secrets claiming they will be disadvantaged if people knew what they have been doing. Berkshire is managed by a small group of people no more than the number for fingers you have on your hand while GIC has a staff size of 1000 and Temasek employs 300 people to give us sub-prime performance.
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Bloomberg : [Link]
Berkshire May Post ‘Blockbuster’ Results by Buffett’s Measure
By Erik Holm

Aug. 6 (Bloomberg) -- Berkshire Hathaway Inc., with a stock portfolio valued at more than $60 billion, may report its best quarter in at least two years using the metric preferred by the firm’s billionaire chairman, Warren Buffett.
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About $11 billion in gains in Berkshire’s stocks and a recovery of derivative bets tied to equity markets caused book value, a measure of assets minus liabilities, to reverse after two quarters of declines, according to analysts and investors including Glenn Tongue at T2 Partners LLC. Berkshire is set to report second-quarter results tomorrow.
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“It’s going to be a blockbuster,” said Tongue, whose New York-based firm’s largest holding is Berkshire shares. “It may well be the greatest dollar gain in book value in any quarter in the history of the company. Warren Buffett showed extraordinary discipline in the first quarter when all others were losing their heads.”
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Buffett, one of the world’s most celebrated stock pickers, this year confessed to investing mistakes that hurt returns over the prior 12 months. Berkshire’s book value per share, the measure highlighted by Buffett in the first sentence of his annual letter to shareholders, has declined in four of the past five quarters, and 2008 marked only the second time since Buffett took over in 1965 that it dropped for a full year.
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In his “owner’s manual” for Berkshire shareholders, Buffett says he considers the figure to be an objective substitute for the best measure of the Omaha, Nebraska-based firm’s success: a metric he calls intrinsic value.

Intrinsic Value
“Intrinsic value is an estimate rather than a precise figure,” Buffett wrote in the manual on Berkshire’s Web site. “The percentage change in book value in any given year is likely to be reasonably close to that year’s change in intrinsic value.”
The value of shares Berkshire reported holding as of March 31 increased 23 percent in the second quarter. Berkshire is the largest shareholder in American Express Co., whose stock rose 71 percent in the three months ending June 30. Buffett’s firm is also the biggest investor in Wells Fargo & Co., which jumped 70 percent, Goldman Sachs Group Inc., which rose 39 percent, and Burlington Northern Santa Fe Corp., up by 22 percent.
Buffett, 78, didn’t respond to a request for comment left with assistant Carrie Kizer. He doesn’t provide a number for intrinsic value in his annual reports or other communications with shareholders.
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Berkshire’s book-value decline of 9.6 percent last year beat the 37 percent plunge of the Standard & Poor’s 500 Index, and the firm has outperformed the total return of the index in 38 of the 44 years Buffett has led the company, according to Berkshire’s own calculations. Under Buffett, Berkshire’s book value per share grew 362,319 percent through the end of last year, compared with 4,276 percent for the S&P, the firm said.

Markets Recover
The declines last year and in this year’s first quarter were fueled by drops in Berkshire’s own equity portfolio, and charges on derivatives tied to corporate defaults and stock indexes on three continents.
Since then, markets have reversed, helping both the equity derivatives and Berkshire’s own stock holdings. The gains in the existing stock portfolio, including warrants to buy shares of Goldman Sachs, and the reversal of losses for the equity contracts may have increased book value by 10 percent before results from operating units are factored in, Tongue said.
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Remarkable Turnaround’
“Some of the stocks had a remarkable turnaround,” said Janet Tavakoli, author of “Dear Mr. Buffett” and founder of Chicago-based advisory firm Tavakoli Structured Finance. “Combine that with the equity puts going up, and this will be a very interesting quarter.”
Berkshire’s own stock rose 3.8 percent in New York Stock Exchange composite trading in the quarter. It reached $100,000 on Aug. 3, the highest since January. Berkshire’s record closing price is $149,200 on Dec. 10, 2007.
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Berkshire’s equity puts -- the derivative contracts tied to stock markets -- were sold to undisclosed buyers for $4.9 billion, according to Buffett’s most recent letter to shareholders. Under the agreements, Berkshire must pay out if, on specific dates starting in 2019, four market indexes are below the point where they were when he made the deals. In the meantime, Berkshire can invest the cash and keep any profits.
The four indexes -- the S&P, the U.K.’s FTSE 100 Index, the Dow Jones Euro Stoxx 50 Index and Japan’s Nikkei 225 Stock Average -- would all have to fall to zero for Berkshire to be liable for the entire amount at risk. That figure was $35.5 billion as of March 31 and can move with currency valuations.

Derivative Liabilities
The $10.2 billion in liabilities on the derivatives, which pushed down book value in past quarters, will shrink after the indexes recovered in the second quarter, said Guy Spier, principal at New York-based hedge fund Aquamarine Funds LLC, which owns Berkshire shares. The liabilities are accounting losses, not cash that Berkshire has paid out.
“We’re going to have a huge reversal in the index puts -- just massive,” said Spier. “We can expect to see some substantial non-cash results.”
The S&P rose 15 percent in the quarter, while the Nikkei jumped 23 percent. The FTSE increased by 8.2 percent and the companies in the European Dow rose 16 percent. Quarter Book value Change from
prior quarter

1q09 $102.8 -5.9%
4q08 $109.3 -9.1%
3q08 $120.2 1.8%
2q08 $118.0 -1.2%
1q08 $119.4 -1.1%
4q07 $120.7 0.7%
3q07 $119.9 4.0%
2q07 $115.3 4.9%
1q07 $109.9 1.4%

Tuesday, August 04, 2009

SM Goh's 10 challenges for the next generation...

Yes, I know it is not his fault but had we reached the Swiss standard of living, most of the challenges won't be there. I thought as SM he should have some insight on how we can meet the challenges instead of just posing them . Lets at least look at whether the questions are well formulated.
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SM Goh highlighted 10 challenges for the next generation of Singaporeans


1 High growth: Amid global competition, can you maintain Singapore’s high economic growth and keep on improving our standard of living?

In 1959, thousands of Singaporeans lived in slums and squalor. Today, more than 90 per cent own their homes.


Why do we equate high growth to rising standard of living and quality of life? We should be thinking long term and going for sustainable growth that benefits Singaporeans. In pursuing high growth, the PAP had to open the floodgates for imported labor causing wages of the lower income Singaporeans to be depressed and structural unemployment. Today we are seeing an increase in poverty as the GDP grows and cost of living goes up. The basic necessities are price beyond the reach of an increasing segment of our population. That is the price we pay for high growth.

2 Life will get better: How do you, as leaders, convince Singaporeans of that when they are already living in good-quality public and private housing?

They can convince the populace the same way one of our leaders convince us we were headed for Swiss standard of living. The message can be repeated on the state on media until 66.6% of the population believes it is true. In fact the newspapers have on a daily basis been convincing us that our lives are better than what they really are - yes the MRT trains are not that crowded, HDB flats are affordable, medical care is affordable, there are no poor people in Singapore, jobs are plentiful and Singaporeans are just fussy.

3 Transport: How does the Transport Minister satisfy the demands for comfort, convenience, congestion-free travel and punctuality of services and expectation of affordable fares, ERP and parking charges?

How? Is SM Goh pretending not to know? SMRT just reported record profits again[Link] in a recession year. The profit motive of the transport monopolies conflicts with the need to provide comfortable and affordable service. Profit is enhanced when trains are packed like sardine cans. Profit is enhanced when frequency is low and air-con is turned down.

As for cars, it is allocated based on the ability to pay. A disable person or a person who needs to bring his aged parents to hospital everyday can be denied a car by a person who uses it to go play golf. Such is the rule of money in our society many things are allocated based on the ability to pay. The fact that cars are considered a luxury tells you something about the quality of life living in an overcrowded island whose population continues to expand due to imported residents.

4 Health care: Can the Health Minister stamp out diseases linked to an affluent lifestyle, such as diabetes and cancer? And keep health-care costs down and affordable?

If we live till 90, we would probably have to work till 75 to have enough savings for a cosy retirement of 15 years.

Cancer is linked to lifestyle?? ..The risk is higher for smokers but cancer can strike anyone.

In a previous article, I showed that Singaporeans shoulder a disproportionate part of the cost of healthcare compared with citizens of other countries. The govt does this by forcing citizens to save for healthcare i.e. medisave + medishield. The govt continues to shift the burden of healthcare costs to Singaporeans by implementing means testing. So when SM Goh talks about keeping healthcare cost down and affordable - he talking about keeping it down and affordable for the govt. ...and the way it is done in Singapore is shifting the burden to those who get sick in our society.

SM Goh said "we would have to work till 75"...the use of the word 'we' is incorrect. It should be 'you'. SM Goh has a large pension and so do all the other members of the elite...they don't have to work. You wonder why they have to be paid millions every year and still get pension when they stop working.


5 Worker training: Can the Manpower Minister and the labour chief design a new training programme, Workfare (a wage supplement for working low-income Singaporeans) and a Jobs Credit wage subsidy scheme for grandparents and maybe even great-grandparents?

The message is very clear - you work until you die. You work even when you're a great-grand parent! Retirement is history in Singapore. That will absolve CPF from being a failed scheme unable to take care of Singaporeans' retirement because Singaporeans don't retire. They can rename CPF to CHS : Contribute to HDB Scheme.

6 More babies: What will get our young to marry and have children? Any creative ideas on procreation, Mr Goh asks parents and the young.

This is a real challenge especially after they spent two decades convincing Singaporeans to have fewer children. It will probably take another 2 to undo the brainwashing....this is a classic case of a govt creating its own problem.




7 Ageing: Today, 9 per cent of our population are over 65 years of age. By 2030, it will more than double to 20 per cent. How do we support so many senior citizens, he asks the chairman of the Ministerial Committee on Ageing.How will we look after our parents and grandparents? Will you build more community hospitals, nursing and old folk’s homes, and keep them affordable?

Given the PAP penchant for manipulating the demographics by 2-child policy, import of foreign residents, etc., we are in for big trouble because of the large intake of people these few years to avoid the effects of an ageing population will hit us later. These new citizens will grow old in 2030 and we will have an even bigger ageing population and problem to solve. What the PAP has done to postpone the effects of an ageing population which is slower economy growth is to bring in new citizens from other countries. The problem is these new citizens will add to the pool of the aged in 2030 and we will be facing a bigger problem at that time. Yet another self-created problem by the PAP.

8 Scarce land: In the last 50 years, land area has been expanded by more than 20 per cent, through reclamation. How much more land can Singapore reclaim over the next 50 years, he asks the Minister for National Development.As the population and the economy grow, how will Singapore deal with the potential over-crowding problem?

Isn't the solution obvious? Stop growing the population beyond the physical constraints of our small island just to achieve high GDP growth.

9 Education: Bright students will be sought after internationally, chipping away at Singapore’s talent pyramid at the top. Mr Goh considers this one of the most serious threats to Singapore’s long-term survival and says it has to be solved now. His questions for the Prime Minister, Education Minister, schools and families: How do we bond students going abroad to Singapore, physically if possible, and if not, at least emotionally? How do we ensure most will return home and contribute to Singapore? How do we ensure there will always be a core of honest, able and dedicated Singaporeans to look after the country and their fellow men?

It helps if the govt can set the example. If Singapore is just Singapore Inc, what is there to hold people back. If it is run like a big corporation, people will go where the pay is highest. That is why this nation has to be de-corporatised. Democracy and equality are not features of a corporation.

10 Religious harmony: For four decades, Singapore has enjoyed racial and religious harmony. How do the people of Singapore ensure that Singaporeans of different faiths will continue to mix with one another and respect one another’s faith?

I guess we have to watch the fanatics and extremists closely. I don't think we are doing too badly here. Unfortunately, the same cannot be said of some other parts of this world where bigotry is on the rise.

Actually SM Goh missed out the biggest challenges in Singapore one of which is the rising income gap leading to rising poverty among the bottom 30% of the population. The other challenge is how to close the gap between the govt and aspirations the people for greater democracy. What about the erosion of our ideals and values as we seek high economic growth allowing the pursuit of money to take precedence over equality and justice.

Monday, August 03, 2009

Bubble Trouble?....

"If something cannot go on forever, it will stop"



"If something goes on for longer than expected, people will start explaining why it will last forever." - Lucky's Law


Today's ST front page : Asian markets are hot, hot, hot. The back page talks about the best July the stock markets had in 20 years. Singapore's STI beat everyone else in Asia except for Shanghai. Now you see why the simple advice I gave out [Link] to invest during recession does make some sense because once the slightest signs that recovery is on the way, the stock market seems to go all out to discount an all singing all dancing economy. At the current level stock markets are discounting a V-shaped recovery (when it is actually L or U?) if it goes higher it is discounting longer period of strong growth....if it gets above certain levels (STI 3000+?) it will discount the best possible economic scenario. Stock markets often get it wrong that is why it is more volatile than the real economy. However, they will humiliate nay sayers first by defying logic. In 2006-2007, I read that the SSE (Shanghai) market was a bubble when it was at 2000, nay sayers said the market was in for a crash when it was 3000.....it peaked at 6000. During the dot.com bubble George Soros famously shorted the Nasdaq Index when it go to 3600 declaring that it was a mania of historic proportions and he was right and wrong...before crashing to 1000, the Nasdaq Index rose to 6000 costing Soros several hundred million dollars. Stock market bubbles are fuelled by overly optimistic investors and short sellers who are forced to cover when their bets go wrong. The fact is most people make money then eventually lose in a bubble. The trick is getting out ...walking away...not looking back...taking your money and run. While there is no way to tell the peak of a bubble, one successful speculator who made off with several fortunes in each of the past bubbles (1987, 1996, 2000, 2007) told me there is some kind of symmetry in the market movement and psychology - in the current market rally, one can see that at stock index levels when it fell the fastest in Sept-Nov 2008, it is rising the fastest and he expects the market to stop rising so fast when it reaches levels where the market had consolidated last year.


We appear to be seeing 2 potential bubbles forming this time. The other one is in the property market. You can just see from the number launches over the weekend....(hmm..why are the developers selling now if prices are poised to go higher). There was an interesting remark by the CEO of Capital Land that this whole thing is not a bubble. It is actually not difficult to tell if the property market is in a bubble compared with the stock market. I'll show you how later in this posting.

HDB prices surging to all time highs. Suburban condos approaching prime condo prices[Link]. At the height of the 1996 bubble, one of my friends told me, "It is not possible for prices to go down because land in Singapore is limited". Yes, our land is limited but so are our incomes. For the good size bungalows and super-prime condos, the limit is the pocket books of rich Indonesians and our home grown billionaires. HDB is still very much the housing of ordinary residents, regardless of the number of PRs, newly minted citizens, the price is bounded by the monthly income of buyers. Given income hasn't risen much since a year ago, the rise in prices mean people are willing forgo other forms of consumption to service their housing loans. There are also a number of people waiting by the side with savings who jumped on to the bandwagon but this spurt in demand is only temporary - in the long run, after the one off rule change to allow CPF to be used for property, the rise in price of resale flats in the long run can only be sustained by increase in personal income. There can be one-off events such as allowing the use of CPF for property, increase of loan tenure, etc that cause the price to shift up but once it adjusts for these changes, the rate of increase follows the growth in personal income because that is where the source of funding that supports the property prices comes from. Unless income goes up dramatically, the price rise is not sustainable in the long run. The problem is bubble such as the ones we have seen in Singapore in the past and in US can last for several years before they are deflated by a recession or govt intervention. Here is what property prices in Singapore look like relative to incomes:


You can detect bubbles when the PPI (Property Index) goes above the real income graph. At the height of the bubble, the market is full of speculators flipping property because their income does not allow them to hold and service the loan. Minister Mah Bow Tan tried to talk down the HDB market a few days ago by saying 'whatever action necessary' to prevent excessive speculation in the property market. He also reminded Singaporeans to ask themselves if they can afford what they are buying and think about what happens when the buyer loses his job. He could have done better if he had bravely announced a new policy that new HDB flats prices will now be linked to median household income rather than the market because that is a true measure affordability immune to market bubble tendencies - affordable housing is the HDB's mandate but its pricing mechanism is not consistent with the mandate (yep..so what else is new, our pledge also says 'to build a democratic society'....come on HDB should build affordable flats for a start!).