Thursday, October 29, 2009
Part 1 is here.
This is proving to be more difficult than I expected.
I set aside a small sum of my money to manage proactively towards the end of last year. The strategy which I'll explain in another post proved successful (due to luck?!). To decide when to sell the stocks and maximise my return, I have to figure how long the current rally will last. So how to do that? Can it be done accurately? Isn't the market random? I knew from past experience that in the Asian Crisis, SARS recession, etc that rallies such as the one huge one we have seen in recent months will top out and end with a sharp selloff or a huge correction.
How do you go out finding a market top? Go around and look for someone who has done it with relatively good accuracy in the past and see what he says about this rally. I actually found such a person on the Internet -a MIT graduate who forecasts how long stock market rallies will last based on how much cash was built up prior to the rally. He has a website that explains his theory and how it is applied[Link]. This forecaster predicts the rally will end roughly mid to end Oct 2009 based on his theory. Based on his forecast, we may have already seen the peak for the current rally. However, I didn't see what I usually see at a market peak - euphoria, general optimism and a huge final surge that sucks in the remaining liquidity at the sidelines. I was considering selling my stocks in batches if such an identifiable peak does not materialise and the market goes into a slow grinding slump. My getting out of the market has been made harder by the recent US$ carry trade disruption - in the past few months, hedge funds borrowed billions in the falling US$ because interest rates are low and used this money to invest all over the world and in all sorts of riskier assets. A few days ago, the US$ moved up and this forced the hedge funds to sell their holdings cause a sharp drop in the markets - gold, equities, commodities all fell in tandem. Such disruptions also reverse abruptly and you will see some of this today as the market spikes up because the US$ weakened sharply yesterday and hedge funds resume their buying.
Bloomberg : U.S. Stocks, Oil Rally as GDP Signals ’Waterloo of the Bears’ . Remember if there are no bears and everyone is bullish, it usually marks the end of a market rally....so the sudden upside reversal of the market, which may trigger a final 'euphoric' spike will be the Waterloo of the bulls and not the bears! Just to put things in perspective, the rally of the past 6 months is the largest and sharpest in decades. Here a chart from someone by the name of momoeagle in the Channelnewsasia forum.
Wednesday, October 28, 2009
You would think that the best evidence that our press is free will come from the Singapore press itself. Reporters from the Straits Times outraged by the low ranking should stand up to say that they enjoy the full freedom to write what they think is right without having to fear for their careers or their articles being having edited. It is pure co-incidence that the editor of the Straits Times is the author of the most flattering book[Link] ever written about MM Lee. Singapore is ranked 144 out of 173 countries based on the Press Freedom Index compiled by the organization Reporters without Borders. Singapore is ranked below Ethiopia, Sudan, Kazahkstan, Venezuela, Guinea and Haiti. Understand that this ranking is for "press freedom" not for integrity, accuracy, or constructiveness. The press in Venezuela is actually quite free despite the Western media portrayal of President Chavez as a dictator, the majority of newspapers there are critical of him and he has no power to shut them down[Link].
"We do not accept that they can decide whether to publish our response,” he said, adding that if the press crossed the line from attacking its policies and making allegations of fact against someone then there would be a libel suit and the factual accusation must be proven.
“If allegation is proven, the plaintiff will lose the case and pay legal costs. Otherwise the accuser pays damages and legal costs,” he added.....He said the press were not used to this anywhere else in the world, and it would be no surprise they did not like it one bit.[Link]
I wonder what he is trying to explain here. Our press is free because it is justifiable to take them to court when they refuse to publish a reply from the govt? Anyway the Press Freedom Index ranking shows relative freedom, just because he thinks that govt move to sue the media is justifiable does not make our press more free because most of the 143 countries rank above Singapore don't have to worry about the govt suing the press.
This year, we have behaved better – so we moved up to Rank 133. Below Kenya (which saw riots following a disputed election), and Congo (which continues to struggle with the aftermath of an armed conflict that has claimed more than 5m lives), Venezuela, and so on. But we are ranked above North Korea and Eritrea. - Shanumgam[Link]
Is the minister saying we shouldn't rank below Congo and Kenya on press freedom because these countries are unstable? The ranking is for press freedom not social stability!
These are all countries which are trying to progress. My point is not that we are in any way inherently superior to them – the question is whether a truly objective assessment will give us such a ranking. Our approach has therefore to been to ignore the criticisms which make no sense – and we continue to do better. The people of Singapore also know better. Sixty-five per cent voted for the Government at the last General Elections. And the investors who put in billions every year know better as well. They do not have to come here. We do not have any natural resources. Our main selling point is that there will be good value added when they invest here, their investments will be protected, and that we are a stable democracy.
Yes, yes...Singapore is rich, attracts money from all over the world and the PAP govt gets 65% of the votes counted....and so on. But what has this got to do with Press Freedom Index? China attracts trillions in investmenst does that means its press is free? The last I remember it is still a communist country.
I'm really scratching my head to figure out what in his speech[Link] justified the remark that the Press Freedom Index is "absurd and divorced from reality".
Our approach on press reporting is simple: The press can criticize us, our policies. We do not seek to condemn that
Remeber this guy called Mr.Brown? He used to write a column for Today. He lost his column [Link]after he wrote this article "S'poreans are fedup with Progress!"[Link]. That is a good measure of the level of press freedom in Singapore. Mr. Brown had other talents and sources of income so he was perhaps less fearful when he wrote that article in Today. Imagine that you're a full time journalist whose family depend on your income, what kind of articles will you write?
Sunday, October 25, 2009
The full PBS video is found here.
Below are the sneak previews:
Here story tells us why dissenting voices should never be repressed and great damage
can be brought about by powerful intelligent men driven by an common ideology.
In Belgian prosecutors have taken action against Citibank to recover the money for Belgian customers. We have a lawsuit now filed by 200 customers against DBS [Link]. These 200 investors have decided to sue DBS because there is a lack of action on the part of our regulators and govt to bring about what they feel is a fair and just resolution.
Belgian prosecutor wants Citibank to repay 'duped' savers
BRUSSELS : Prosecutors in Belgium want US lender Citibank to pay back 128 million euros to Belgian customers who claim they were duped into buying high-risk financial products from failed investment bank Lehman Brothers, media reports said Saturday. Two leading business newspapers, L'Echo and De Tijd, reported the public prosecutor will argue Citibank's Belgian operations enticed clients with "false advertising" and "tricks" to convince them to swap their savings for high-risk products from the fallen Wall Street Bank. The reports said the case will open on December 1 where prosecution will call on Citibank to reimburse the 4,000 clients affected with a total of 128 million euros (192 million dollars) plus interest. Calls to the public prosecutor's office seeking comment were not immediately returned. Lehman Brothers collapsed on September 15, 2008, sending a jolt through financial markets and triggering instability in other banks worldwide. The case in Brussels' civil tribunal was brought following by a complaint from an investors rights association, Deminor. The aggrieved customers argue they received false or inaccurate information about the financial products they were sold. Some 18,000 Belgian savers were hit by Lehman Brothers' collapse, losing close to 325 million euros. - AFP /ls
Saturday, October 24, 2009
INSIGHT DOWN SOUTH
By SEAH CHIANG NEE
As foreigners with PR status compete with young Singaporeans for public housing, impacting also on private development projects, prices rise and the government limits the entry of foreign arrivals.
SINGAPORE’S public housing, which has gained world acclaim for creating a nation of homeowners, is sagging under the weight of a wave of foreign arrivals.
In recent weeks, the government has been peppered with complaints from Singaporeans — some of them newlywed graduates — about insufficient new subsidised flats despite repeated applications.
One claimed he had failed 11 times while others talked of two or three failed attempts.
The latest public offer of 2,132 new flats for sale drew 20,394 applicants, which means that nine in 10 will be disappointed.
Another 5,000 units will be launched before the end of the year.
The rejected Singaporeans who cannot wait any longer will have to turn to the dearer resale market, where they will face stiff competition from rich foreigners holding permanent residency (PR) status.
PRs made up 40% of buyers in the open market during the past five years, resulting in prices rising by 40%.
One local benefit, however, is that a newly married Singaporean couple is given a S$40,000 (RM97,121) grant to buy a HDB resale unit.
The squeeze is due to two factors: firstly, a PR population hike of 51% to 553,000 since 2004, and secondly, more citizens demanding central or mature areas.
Today’s inadequacy is a far cry from the previous generation’s when the Housing Development Board (HDB) successfully mass-built cheap homes for hundreds of thousands.
One of the earliest stories I wrote as a reporter was about the HDB’s world record of building one housing unit every 45 minutes.
The question of subsidised housing is of crucial importance to Singaporeans who are trying to cope with one of the highest costs of living in Asia.
The passion Singaporeans have for property can only be understood by people living in land-squeezed cities.
After independence in 1965, then Prime Minister Lee Kuan Yew announced the objective of creating a home-owning society.
“If every family owned its home, the country would be more stable … I believe this sense of ownership was vital for our new society,” Lee said later.
Today, 86% of Singaporeans live in HDB flats and more than 90% own their home.
It was Lee’s housing programme that endeared his party to the old generation of squatter-living Singaporeans.
Now, the HDB is facing a strong challenge, catering to a new generation with higher expectations than their parents.
“Its achievement made the PAP (People’s Action Party) one of the most successful parties in Asia; it can also bring it down if it stumbles,” said a professional, who is still paying off a 30-year HDB loan.
Critics have accused the HDB of trying to replace the social task of providing cheap public housing with one dictated more by market forces.
Government officials say the HDB is building enough flats for local needs, and applicants failed to get one — even repeatedly — because they were too choosy, not because of inadequate supply.
“We promise every eligible citizen an affordable flat, nothing about meeting his choice location,” one official added.
There are regulations against speculating on HDB flats but there is no ban on it.
As a result, many Singaporeans and PRs — including those from Malaysia and Hong Kong — have made profits buying and selling resale apartments after a few years.
No foreigner may buy HDB flats but may rent them, also indirectly pressuring supply.
However, PRs are allowed to buy resale units.
Several years ago, there were stories of Hong Kong businessmen settling here as new PRs and making a killing selling their HDB units (the second time entailing a levy on the profits).
The slow building rate is not entirely due to poor anticipation of demand — but also to shrinking living space, particularly in choice areas where prices rose the sharpest.
The older generation was happy to accept any home offered to it, but not today’s.
“Now, people want only new units in a mature estate,” an official said. “Unfortunately, such places are becoming fewer.”
The foreign influx is, of course, the biggest cause of recent price increases.
With Singapore out of recession, financial consultant Leong Sze Hian has predicted another 10% hike in resale HDB prices.
Minister for National Development Mah Bow Tan insists there are sufficient public flats for Singaporeans and prices “remain very affordable”.
Eight out of every 10 first-time applicants of HDB flats would succeed in getting one on their first try, the board said.
In a recent online poll, however, 65% of Singaporeans described HDB prices as totally or slightly unaffordable.
Three out of 10 said they were “barely” so while 5.19% found them comfortable.
The sharp price rise in public flats is generally good news for the vast majority of existing owners, allowing many to sell out and upgrade to private properties.
In a speech during the generation change, Lee likened life in Singapore to a marathon race in which the second lap was about to begin.
For all who finish this race (not merely the “winners”), Lee said one possible reward was to provide everyone a second property.
That was, of course, before the massive arrival of immigrants.
Prime Minister Lee Hsien Loong, whose priority is to contain the problem, has announced that the intake of foreigners will be slowed down.
As Singapore’s population hits five million, the space squeeze is also being felt in the private market.
In the past year, developers have been selling tiny flats of less than 46.45 sq m — the latest on offer being a 26.48 sq m “Mickey Mouse” flat.
Why is the quiet gathering of 4 people assembling outside the CPF building so disruptive to public order that the riot police has to be called?[Link]. Under the Public Entertainment Act, the following requires a permit:
(a) any variety act, performance of music, singing, dancing, gymnastics, acrobatics and legerdemain, demonstration, display or parade (other than ad hoc performances);(b) any circus or any exhibition of animals;(c) any amusement centre, amusement park or fun fair;(d) any computer games centre;(e) any exhibition of film, or any peep-show;(f) any reproduction or transmission otherwise than in association with a film, by any means other than telephony or radio telephony, of any music, song or speech;(g) any machine or device by the manipulation of which chances are given of obtaining prizes in money or kind;(h) any pin-table;(i) any sporting contest of any kind between any number of persons or animals, other than that organised by any registered society, trade union, company or association;(j) any organised competition at games of skill or chance;(k) any lecture, talk, address, debate or discussion;(l) any arts entertainment; or(m) any combination of any of the above forms of public entertainment
The flash mob has technically broken the law if they did not apply for a permit.
But don't worry the police won't be taking any action against them or any of one of the thousands of sales people who use speakers and give fancy speeches to promote floor cleaners and miracle mops. Half the time these laws are applied to people with surname Chee. It is okay to gather without permit to dance to pop songs but if you gather to save the earth, free the repressed, help the unjustly treated or speak out against violence, it is not okay. It is often illegal to act on your conscience in Singapore.
Wednesday, October 21, 2009
- Singapore's policy responses to ageing, inequality and poverty by Mukul G. Asher and Amarendu Nandy.
Tuesday, October 20, 2009
Our ministers are the highest paid in the world and our cleaners and drivers are the lowest paid among those in 1st world nations. Govt policy on foreign workers is extreme allowing more foreigner workers here per capita than anywhere else in the world except for a handful of middle-eastern oil rich nations. The govt imported cheap labor to retain industries dependent on low wages. The help given to the poor shaved the GINI from 0.481 to 0.462 - by 0.019. Yes, the PAP govt likes to claim it is doing something but 0.019 tells us they are not doing much. In fact, Singapore has little in the way of social safety nets and comes in among the last if not the last when compared other 1st world nations. Superimpose the income gap over the high cost of living and you get a large segment of the population living in misery. Our high housing cost, 2nd highest cost of electricity in the world and transport costs makes Singapore the 10th most expensive city in the world[Link].
MM Lee now tells us that the income gap is inevitable. The resentment among the population caused by the income gap and rising cost of living is also inevitable. When people are resentful and the govt does nothing about a problem except to blame it on everything else but themselves, it is also inevitable what the voters do at the ballot box. They understand that once they support the wrong govt and the policies they put in place, all their problems become inevitable.
Monday, October 19, 2009
Sunday, October 18, 2009
Today I opened up the Straits Times and realised many things leading to this crisis are recurring:Like many I was optimistic that following the moves to rescue the system, there will be a determined effort to fundamentally reform it so that the mistakes of the past 2 decades will not be repeated. Unfortunately, one the system is rescued, all the momentum for change disappeared. Once the pain is gone all the lessons are forgotten. This is like a man having a heart attack, his surgeons rescued him from the brink of death and when he out of the ICU all he thinks about is going back to eating the unhealthy foods that put him in hospital. The 2 measures to look at are the income inequality and household debt - these are the bloodpressure and cholesterol levels for the economy. Once they start building up again, the next heart attack is just around the corner. What the politicians and central bankers have accomplished might be to postpone the real crisis and if they don't use the extra time well, the past 9 months of so-called recovery is just an illusion driven by brute force massive govt stimulus. Jim Rogers might be proven right in the longer run - allowing more pain and letting the banks collapse so that the financial system can be rebuilt may lead to a more equitable and sustainable system for the coming decades.
Saturday, October 17, 2009
"Cheaper, faster and better"....its the same old story. The last time they promised Swiss cheese if we worked harder and faster but this time they don't even bother to promise anything. All they can say is we will get to keep our jobs to service our HDB debts if we can keep up with their system.
There is this delightful little movie called "Travellers and Magicians"[Link] which I picked up last year at Cash Converters which taught me something about Bhutanese happiness. Bhutan unlike Switzerland or Denmark is a dirt poor landlocked nation surrounded by India and China. In the movie, a young impatient village official wanted to leave and go to America which he saw as a place of great economic opportunities. He missed his bus and had to find his way to the airport by hitchhiking. Along the way, he met strangers with whom he had to share whatever transport came along. Many minor mishaps caused him to discover the kindness and hospitality of his fellow Bhutanese villagers and the respect they had for him as an official. At the end of the movie, he decided to give America a miss. Bhutanese happiness is generated by people being kind, caring and generous towards each other. The Bhutanese govt puts happiness ahead wealth in policy making[Link].
There are many paths to happiness but CBF is probably not one of them.
Here's an interesting article by Jim Jubak on GNH.
GDP vs. GNH (gross national happiness)
The criteria may be subjective -- and different from the measures we're used to -- but determining a country's happiness can have economic and societal benefits.
[Related content: spending, middle class, luxury, recession, Jim Jubak]
By Jim Jubak
Would we all be happier if economists measured happiness?
I spent a lot of time thinking about that on a camping trip last weekend. (Hey, it was really cold, and I had trouble sleeping.)
Can money really buy happiness?My friend Pamela had set my thoughts down this track by saying, "You know, I don't need all the stuff I have," as we watched the sun sink behind the Pennsylvania mountains.
It's the kind of thing you routinely say standing around the campfire on your first day out of the city. After a few days, in my experience, the remark is likely to be met by protest: "What about hot showers? What about coffee without bugs in it?"
But this time, on this camping trip during the Great Recession, the sentence hung there, gathering meaning (but, unfortunately, not giving off any heat) in the cold October air. Many of us have thought long and hard, probably in the deep of the night, about what we could do without -- if we had to. I know I have.
(Read the rest of the article here.............)
Friday, October 16, 2009
The old trick to attract foreign investments has always been to have wages lag behind productivity growth so that per unit labor cost falls. Please come to Singapore where workers are cheaper and faster. This tired old formula is just not going to work anymore because China and Vietnam has MUCH CHEAPER, MUCH FASTER workers. Why does the govt of Singapore not apply CBF to itself? Can the HDB build cheaper and better flats faster? Can Singapore Power supply cheaper energy? Can our public transport come faster, fares made cheaper and commuters have a better more comfortable ride instead of getting herded like cattle?
CBF is only for workers - the lesser mortals of this country. Our ministers are certainly not cheaper, better or faster than those of other countries. When it comes to problems faced by Singaporeans they have been SLOW. Slow to react to the housing shortfall, slow to react to minibond fallout of Lehman's collapse etc.
Workers should no longer accept this CBF formula which has led to a large income gap and misery among a large segment of the population. We should have QPS instead - quality, premium and smart workforce to distingish ourselves from the Chinese and Vietnamese. Unless the cost of living is low, workers cannot afford to suppliers of cheap labor. Lim Swee Say doesn't come cheap and as labor chief he cannot expect Singapore workers to be cheap. The influx of cheap foreign labor sends the wrong message to investors and creates the expectation of low wages when they come here. Low wages does not go with the high cost of living in Singapore. If Lim Swee Say wants CBF he should apply first to himself, then to the PAP govt before he opens his mouth to ask workers to be CBF.
Labour movement working towards cheaper, better, faster economyBy Ismail Saifulbahri / Hoe Yeen Nie, Channel NewsAsia Posted: 15 October 2009 2230 hrs
Labour movement working towards cheaper, better, faster economy
SINGAPORE: The labour movement, NTUC, will be working towards helping put on track a "Cheaper, Better, Faster (CBF)" economy in the next two years. The CBF strategy will help drive Singapore into the next phase of growth. "We want to create early successes in all sectors to demonstrate how the CBF concept can be implemented on the ground," said labour chief Lim Swee Say. Mr Lim gave examples of companies that have already taken the CBF strategy to heart. The wafer fabrication sector had launched a national framework for skills upgrading in August. ST Microelectronics began training 7,000 engineers this year, to be followed by 3,000 technicians and operators next year. Making his closing address at the NTUC Ordinary Delegates' Conference, the labour chief was also encouraged by the strong endorsement given by union leaders to the CBF concept. However, even as they pledged their support, unionists raised concerns over how it would translate on the ground and impact workers. Some delegates at the conference were worried that the CBF strategy might lead to job cuts. Mr Lim said: "They feel that it's very important that the management has the same understanding of the CBF because the CBF economy is not about downsizing the workforce. "It's not just about applying them to manufacturing sector, it's not about just including the younger workers, better educated workers, but instead it should be inclusive for all workers - young and old." Mr Lim pointed out: "Which country, which tripartite partners will want to work together to become cheaper, better, faster, to improve productivity so that every one per cent improvement in productivity will lead to one per cent rise in unemployment rate?" He added that the end result will be stronger economic growth, more profitable companies, and higher wages. Mr Lim also said that older or less-educated workers will not be left out in the drive to be cheaper, better, and faster. Foreign workers too, will be given training. Over the next two years, NTUC will be working with companies to raise worker productivity. It will also work closely with the Singapore National Employers' Federation (SNEF) in the months ahead to ensure that both businesses and workers are on the same page regarding what the CBF strategy entails. The three-day conference, which ended on Thursday, was a time for unionists to take stock of their progress and to raise issues on the ground. Some said more could be done to get women back to work, and to provide better support for working mothers. Others suggested ways to make training courses more accessible. - CNA/sc
Thursday, October 15, 2009
Stalls food courts used to be rented out individually to mom and pop stalls. It was hard work but these stalls that make enough to support a family. Today an increasing number of foodcourts are own and operated by corporations who hire low wage workers (mostly from China) to serve and cook the food. Prices are high and the food is (sometimes?) bad and most of it goes towards the profits of corporations who now control an increasing number of food courts.
Recently, it was reported that that there is an increasing number of wet markets that has been taken over by big corporations[Link] who have purchased these markets from the owners. The plan is to either convert them into supermarkets or air-conditioned markets. The customers don't want it as they are likely to end up paying more and the stall holders will lose their livelihood.
While corporatization very often is beneficial because it introduces economy of scale and efficiency, in many cases it merely converts income of small scale independent businesses into profits of large corporations without benefit to the consumers.
Wednesday, October 14, 2009
I haven't posted any articles these few days because I'm watching the markets very closely. Most of my money is invested in the long term however there is part of it that has to be sold off and it is best done near a market peak due to an investment strategy I put in place end of last year. I'll explain why when it is all over.
The other bigger piece of the puzzle is what type of money is going into the market right now to push it higher each day - the liquidity generated by low interest rates, the US dollar carry trades, the retail contra trader, the feller who read yesterday's economic headlines and now want to buy. The type of money that flows in quickly and gets out quickly at the first sign of trouble. Is the good news from Intel's earnings, better retail sales, and stronger economy the reason for the market going up or are they simply excuses to push the market higher. If the right time to buy was when the stock market got hammered in March 2009 when the economic outlook was very bad and earnings were terribly disappointing...what does that say about the right time to sell.
Saturday, October 10, 2009
I leave you with this clip from SICKO. Something to think about.
Friday, October 09, 2009
Okay he has been president for only 8+ months. Although I like this US president a lot more than the previous one, isn't it early to judge if his diplomatic efforts will work? Obama-mania spread to the Nobel Committee?
Nobel Peace Prize Awarded to U.S. President Obama (Correct)
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By Meera Bhatia
(Corrects spelling of Theodore in last paragraph.)
Oct. 9 (Bloomberg) -- U.S. President Barack Obama was awarded the Nobel Peace Prize for “his extraordinary efforts to strengthen international diplomacy and cooperation between peoples,” the Nobel Committee said in Oslo today.
Obama, 48, last year was elected the first black U.S. president on a platform of extracting the U.S. from the Iraq war while increasing focus on an eight-year conflict in Afghanistan. All U.S. forces are scheduled to be withdrawn from Iraq by 2011, after the 2003 the U.S.-led invasion to topple Saddam Hussein.
Obama is the third sitting U.S. President to be awarded the prize, following Theodore Roosevelt in 1906 and Woodrow Wilson in 1919. Former U.S. President Jimmy Carter won in 2002.
Thursday, October 08, 2009
Wednesday, October 07, 2009
Here is the prediction:
The market will top out some time next week 12-15 Oct 2009 and go into correction that will last until early next year Feb-March 2010.
Tuesday, October 06, 2009
From the SDP website:
In this case the judge acquited the marchers based on the spirit of the law. It was a ridiculous law that has been selectively applied to drag opposition members into court. Many of us have taken part in marches that are company or school events without permit. Similarly, the public speaking laws don't seem to apply to salesmen promoting "miracle mops" but to opposition members promoting democracy.
"District Judge John Ng acquitted leaders of a Singapore Democrats who
were charged with taking part in a procession on 16 Sep 07. Judge Ng said that
the walk “did not cause inconvenience to the public, affect traffic flow or make
noise which disturbed the public peace.”
You may think this is a victory for the SDP because they have challenged the system and won. There is another way to look at this - the verdict is actually great loss for the Singapore Democrats because it shatters their claim that our courts are unfair and "out to get them". They don't get to celebrate going to jail and making a video for youtube when they get out to show the world how "evil" the PAP is.
Imagine this .....if the PAP completely stops repressing the SDP, give them the full freedom to conduct talks and protests, the SDP will be a lot less convincing when they complain about the lack freedom and democracy in Singapore. They will have to win the support of the people with workable ideas. ...that will be a challenge the activists whose forte is fighting for democracy. The SDP has to reinvent itself fast because the PAP is starting to ease up on a number of restrictions. While it may be a long way before we get 'real' democracy, the steps taken by the PAP may have satisfied and convinced average Singaporeans that they are headed in the right direction at an acceptable pace.
A few weeks ago, I went to Sim Lim to look for an electronic component. I went one of those small stalls to admire the China made MP3 players - they seem to be getting cheaper and they throw in plenty of features like video playback, touchscreen and Ninetendo game emulator. The stall was manned by an Indian national who was quite quiet and not much of a salesperson. A young man in his late teens with his mother came by and wanted a replacement for his MP3 player which had a cracked glass surface. The Indian feller told him quite nicely that this type of physical damage was not covered by the warranty. The young man instantly became angry and started shouting ...a string of vulgar, racist, hateful phrases and words. He said that people from India were all dishonest crooks and so on. His mother did nothing to restrain him. The Indian guy, in shock, didn't know what to do. I told the young man that the Indian guy was probably following instructions and told him to look for the boss. The boss turned out to be a Chinese lady(PRC) who was quite skillful at handling the young man. Later, the Indian guy told he that he can't understand what he had done to provoke such a reaction from the young man.
I'm not against having foreigners working in Singapore. I take issue with the large numbers and the impact the large number has on my fellow Singaporeans. I do not have anything against the individuals who take the opportunity to come here to seek a better life for themselves. Once they are here they should be treated well, protected by labor laws and their rights should be respect. There is growing dislike for foreigners in Singapore caused by the perception that they are here to take away jobs from Singaporeans. This dislike is turning to hatred among a small segment of Singaporeans. This hatred is misdirected - these foreigners are no different from us, they are here because wages are higher here and many Singaporeans go overseas to work because the pay is better. What is different is other govts have better policies in place when it comes to foreign labor.
Monday, October 05, 2009
Flats available : 2132
Applications : 11581
Guess 9449 eligible families will have to wait for the next round. At some point they will become desperate enough to go to push up the COV for resale flats.
Sunday, October 04, 2009
The reason is both Starhub and SingTel were competing to be a monopoly for EPL broadcast. They were in a bidding war that can only result in a lousy deal for consumers. They will bid the highest possible fees based on how much die-hard soccer fans are willing to pay for their soccer fix. In this case, competition drives up the price because Starhub and SingTel cannot offer the same product since these rights are exclusive. The EPL guys know this is the best way to make the most money. Soccer fans caught in this and cannot afford it either have to give up watching soccer (which I'm told is nearly impossible) or break the law. They can get to watch EPL free if they are willing to resort to piracy. Thanks to the mainland Chinese, many of whom have little respect for copyright, there is software like TVAnts that allows you to watch soccer on your PC. You should always obey the law in Singapore but understand that laws do not always result in fairness and justice - there is ongoing debate whether copyright and patent laws have led to monopolistic profiteering behavior that is harmful for society. The 3rd largest political party in Sweden is the Pirate Party which wants the govt to reform the copyright&patent laws to make them fairer.
In 2007-2008, Temasek sold off our power stations through auctions. It was explained to the public that this is for our own good because it will result in greater competition[Link]. Yet we see our electricity tariffs rising gain[Link]. There will never be real competition to drive down prices because each of these power stations have limited capacity and cannot expand market share by offering lower prices. The power stations were sold to profit seeking foreign entities who offered the highest prices for these stations. They would like to recoup the billions they invested from Singaporean households. That they purchased our power stations, shows that the electricity tariffs Singaporeans pay generate attractive handsome profits for these companies.
Competition is not always real or good especially companies involved cannot offer the same products or when they cannot increase their supply of the product to gain market share by driving down price. This brings me to the bigger topic of housing in Singapore....which is a hot topic given how HDB prices have risen. Land is limited in Singapore. It is sold by URA through auctions. Developers bid for these land parcels very much like how SingTel bidded for the EPL rights. Just like the soccer fan needs his soccer fix, people will need a roof over their heads so the demand is relatively inelastic ....people are willing to pay anywhere between 20-60% of their income - if it goes higher, they will find alternatives like staying with their parents etc. As the population size increases, so does the demand and level of desperation for housing. URA is like the owners of EPL - to maximise revenue from these land sales they more developers to bid so that price of land goes up. If we only have private housing, and no public housing life in Singapore will be miserable - we will all be slaves housing and a large number will be destitute because they cannot afford it....private developers will never build rental or low cost housing. The places where a purely private housing market can work is where the cost of land is so cheap that the cost of a house is roughly the cost of building a house....if you're poor you build your own house which was what some people did in the 60s when the Singapore population was 1.5M and land was plentiful. Public housing exists to stop us from turning into 'slaves'. The more of our income we pay for housing, the more enslaved we become to housing loans and have less of our income on other things in life. For this reason public housing should be priced at a certain level of our income - if income grows by 10%, public housing should go up by 10%....any more translates to a lower quality of life. As long as the price rise roughly reflects the increase in income, linking HDB prices to resale market helps to take care of other things like price differentiation due to location and other intangible factors like jobs security which leads to people willing to take up slightly higher loans. The whole situation deteriorated due to the large influx of people and ballooning of income gap. When you have demand for a scarce but essential resource from a very unequal income distribution, the result is a lot of misery....rising poverty and poorer living conditions for many people. If you can, you fix the income gap and slow the influx of people....but if you can't and don't do that, you have to start supporting the people who have fallen due no fault of their own (the victims of govt policy!) by supplying cheaper housing - something that this govt has failed to do. There is plenty of anger going around as people begin to understand that all that we are seeing the consequences of govt policies and the system they put in place....are we better off today than we were 15 years ago?
Friday, October 02, 2009
I woke up this morning to read the news online and found this Bloomberg report:
U.S. Markets Wrap: Stocks Tumble as Treasuries, Dollar Rally
According to the report, the DOW Jones index fell by 200 points as a number of US economic numbers came it weaker than expected. Investors fear that the stock market has run up too much relative to the strength of the recovery. Earlier in week there was also this report:
European stocks rise on upbeat IMF report
There was also this report that came out sometime yesterday:
I.M.F. Upgrades Forecast for World Economies
I've been watching all this news flow closely over the past 3 months. The economic picture is largely mixed as the global economic recovery is weak. So we get a few numbers that are better than expected and numbers worse than expected. I have a long memory. I remember a few months ago a series poorer than expect economic numbers came out and the DOW kept going up after an initial negative knee jerk reaction. The reactions to these numbers are hardly predictable.
There was also this report yesterday in USA Today:
Skittish stock investors sit out while bull market runs
This report says that the bull market will keep going because there are too many skeptics and hence plenty of money by the side. According to this sort of "rally denial" is what will keep the bull going.
There is plenty of guessing on whether this market will go up further and I don't want to add to it. There are always reasons invented to explain why markets to go up or down. If the market go up, pundits can always explain it by saying "there is a lot of money by the side". If it goes down, "the market as run ahead of the fundamentals" and so on. I can't tell if the market has already topped out or will resume its climb up - it looks like it has run up a lot so it would be a good idea to be cautious.
In the short term many of the sharp market moves has nothing to do with the economy or disappointment with the economy. There are many computer programs running algorithms that trade the market automatically base on relative movements of various markets. Recently investors have engaged in a particular type of trade known as a 'carry trade'. They borrow US dollars cheaply as the interest rate is low and use this money to invest in riskier assets such as emerging market equities. As long as the US$ is weak, it helps to keep money flowing to risky assets such as stocks. However, when something causes the US$ to go up, computer programs kick in to sell risky assets in anticipation of the carry trade unwinding. This programs work because unwinding of the carry trade causes persistence in selling - as they unwind and move back to US$, it causes the US$ to go up leading to more unwinding. Yesterday, supportive comments from Fed Chairman Bernanke, who said that there is no immediate risk to the dollar caused the US$ to strengthen and that could have triggered the large falls after the initial selling caused by the poorer than expected economic reports.