Saturday, February 27, 2010

COE Revenue to rise by 50%....

The cost of owning a car is going to be a lot higher than in previous years. I believe the revenue from ERP has increased significantly too given the number of new gantries that have popped up here, there and everywhere. When you design a system, and if your desire is to deliver a high quality of service at an affordable price, you whenever you raise prices it has to be tied with a higher quality of service if inflation remains stable. Our transport system operates in a different fashion. The public transport has become so packed and uncomfortable in the morning rush hour and that pushes people to buy cars and use them to go to work. That in turn pushes up the price of COE and ERP (cost of usage). Those who can't afford to drive their cars any more go back to taking the crowded buses and MRTs. The SMRT will have no problem raising prices this year or next (after the elections?) to appease its shareholders because most commuters can't switch to driving a car given the high cost. Transport cost increases fast without any corresponding service quality improvement. The only thing that is certain when our traffic congestion become worse and when the SMRT rides become more suffocating is the govt coffers getting filled up faster and SMRT shareholders getting higher dividends.

My previous posting on this topic [Link] discusses why no other country or city has needed to implemented COE & ERP and no city has collapsed without them. Someone posted in the comments section that the system can be improved if the every cent collected is used to increase road capacity, improve bus services + extend the MRT/LRT system. Yes that would close the loop if the money is used to supplement what the govt is already spending on public infrastructure. But that is not the case, the solution for road congestion is still to increase ERP rates and set up new gantries. Singaporeans pay the most for ownship and car usage and our govt collects the most revenue per capita in the world from this system - Singaporeans pay the most in the world and the quality of service they get is far from the best in the world. All this leads to frustration...not that we are unused to frustration... it is really how much we can take before we do something about it.

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COE revenue projected to rise by 50% to $900m [Link]

By CHRISTOPHER TAN

CERTIFICATE of entitlement (COE) prices continued to climb as bidders scrambled for the permits ahead of a probable cut in quota this year.

COE premiums for cars up to 1,600cc rose by 1.8 per cent to $20,340 at yesterday's tender. COE for cars above 1,600cc was 3.1 per cent higher at $23,889. They were surpassed by the premium for Open COE, which can be used for any vehicle. This rose by 8.2 per cent to close at $24,229.

Commercial vehicle buyers have to bear a higher premium than those buying a 1,600cc vehicle. Their COE price increased by 9.9 per cent to $23,501. Bikers will feel the pinch as well. The COE price for motorcycles shot up by 17.5 per cent to $1,001.

Industry players are bracing themselves for premiums to rise further. Mr Ron Lim, general manager of Nissan agent Tan Chong Motor, pointed to vehicle tax revenue projections revealed in Monday's Budget as a sign.

The Budget projected that vehicle-related tax revenue will dip by 16.5 per cent to $1.5 billion in the 2010 financial year, from $1.8 billion last year. But at the same time, COE revenue is projected to rise by nearly 50 per cent to $900 million, from $610 million last year. According to Mr Lim, the market read this as a clear indication that there will be fewer cars (on the back of fewer COEs), and COE premiums will soar.

Last year's average COE premium for cars up to 1,600cc was $15,000, while the average COE price for cars above 1,600cc was $16,400. Based on the projected rise in COE revenue, the two averages will be close to $22,500 and $24,600 respectively this year.

Motor Traders Association president Tan Kheng Hwee predicted COE premiums will hit $30,000 to $35,000 'by year-end if the economy continues to grow'. 'Although COE supply will be reduced sharply, new car demand is still moderate,' she said, as most cars here are relatively young. But as these cars age, '$50,000 to $60,000 is not out of the question in a couple of years' time'.

Mr Neo Nam Heng, president of the Automotive Importers and Exporters Association, concurred, saying: 'I think prices will breach $30,000 in three months' time.'

He said yesterday's increase was also fuelled by a weaker euro, which has been hit by fears of spreading credit defaults in countries such as Portugal, Spain and Greece. He said: 'The weak euro benefits the European makes, which in the first place have bigger profit margins to bid for COEs.'

Recent sales performances of key European marques seem to support his observations. Last month, Volkswagen registered a record 393 cars sold in one month.

Motor traders said the sharp rise in Open COE premiums may also be a sign that speculators are back. Open COEs are transferable, and speculators secure these COEs to resell them to motor traders who may have failed to clinch some COEs.

A fast-rising Open category indicates that speculators are bullish about future premiums.



This article was first published in The Straits Times.

Thursday, February 25, 2010

U-Turn or Election Sweetening....?

Suddenly, we see plenty of changes to our foreign worker policy. The govt talks of sharpening the difference between Singaporeans and PRs. They are increasing foreign worker levies so employers will have more incentives to hire Singaporeans. The govt will also be implementing citizenship tests[Link]. Looks like nothing in Singapore comes in moderation. I had dinner with a group of PRs last weekend and many of them were quite surprised at the moves against them - many of them have been in Singapore for 10-15 years and consider Singapore their 2nd home. First the govt implemented an FT policy on steriods opening the floodgates to foreigners, running advertisements overseas to ask people to come to Singapore to enjoy free scholarship & work etc. Then all of a sudden, they want to "sharpen the difference" in treatment of PRs, imposing higher levies, imposing citizenship tests etc. They are doing what some people say is a U-turn on their policies. Really, why can't they just plan properly and use common sense instead of swinging from one extreme to another. For the PRs, there is complete confusion because the media for the last few years kept harping on Singapore needing more foreigners to create jobs for Singapores, they are needed because of our low fertility rate and they are wanted because they are more "hard striving" and so on.

For critics of the govt FT policy, many are relieved that the govt finally 'sees the light' and have taken steps to adjust this policy. However, one has to ask : why did the govt take so long to realise it had veered so far off and is now in a hurry to correct the policy? It is hard for me to believe that the PAP has moved away from being pro-business to doing what will benefit ordinary Singaporeans at the expense of big business - this is completely inconsistent with every thing else the govt has done over time and the "native Singaporeans are falling behind because the spurs are not stuck into the hide, that is their problem" ideology. What all this is consistent with is the sweetening process we see before every election. Lest you forget, I've attached a old sample of this from 2006 i.e.before the last general elections. Plenty of talk about "helping Singaporeans", "helping the poor", "more jobs for Singaporeans", concern for older workers, concern for the poor and so on before the 2006 elections - so what happened after that?

Before every election, the populace is convinced that things have changed for the better by a tsunami of good news and favorable policy changes. After the elections, the govt sings a completely different tune with various hikes - GST, minister pay, transport fare etc. If you think that the PAP govt is all set to moderate its foreign worker policy, please think again. The best way to secure long lasting and permanent changes is to let this govt know that you don't forget easily and you're not a fool ....only then will they respect you and start working for your interest.
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2006 SWEETENERS....
"Higher wages seen for Singapore workers as job market tightens" "Singapore businesses optimistic in first half of 2006" "Singapore's employment in 2005 at all-time high of 2.3 million" "Singapore's economy expected to continue prospering: PM Lee" "$1b help for low-wage earners" "NTUC aim: Make 10,000 jobs pay more this year " "Record 32m pass through Changi Airport" "Foreign Trade hits record $716b" "RECORD panel recommends financial incentives for NSmen" "Private and HDB home prices move up" "Panel recommends incentive package for companies to hire older workers" "More workers expected to find jobs in 2006: NTUC Chief " "Biomedical sciences industry may exceed government's 2015 target" "NTUC to set up $50m fund to help low-wage workers upgrade their skills " "S'pore strong trade performance expected to continue into H1 2006" "Medisave withdrawal limit to be raised from $300 to $400 from April" "Singapore expects strong manufacturing investments in 2006 " "Strong jobs gains show Singapore employers hiring for growth: analysts " "Jalan Besar Town Council unveils $517m estate upgrading plan" "S&C and rental rebates for 700,000 households" "Sembawang Town Council to spend $570m on renewal plan" "Civil servants to get 1.75 month year-end bonus" "12% of Singapore employers to increase hiring in Q1: survey " "Singapore created 28,500 jobs in Q3 " "Singapore raises economic growth forecast to around 5% for full year" "ComCare Fund disburses $8.7m to help low income households" "East Coast Town to undergo S$500m renewal programme " "HDB upgrading programme speeds up with 64 precincts chosen for 2006 " "Jobless rate down to 2.5%. Lowest in 4 years" "More Jobs Than Ever Before As The Tide Turns" "Singapore retailers say festive season sales the best since 2003" "Manufacturing, service sectors optimistic about business conditions" "Singapore's PMI expands for 9th straight month in January" "Singapore's STI ends at six-year high for second day running " "Singapore banks expected to post strong Q4 earnings" "Singaporeans less worried about economy, job security: survey " "SilkAir flew record 134,000 in Dec " "Singapore's M&A market hits record number of deals in 2005 " "SingTel's regional mobile users rise to 78m by end of Dec 2005 " "More SMEs expected to launch IPO this year" "SE Asia a key growth region for many S'pore firms" "Bets still on for global stock market rally despite slow start to year" "Panasonic sets up new semiconductor plant, expands capacity by 25% " "More couples having more children, 2005 birth rates up marginally" "MediaCorp Raintree Pictures' "I Not Stupid Too" beats Jet Li's "Fearless" "More poly graduates finding jobs at higher starting pay: survey" "Gallery outreach, higher incomes drive growing interest in art collecting" "Committee on ageing recommends $10m fund for senior citizens' activities" "Raffles Holdings posts record annual profit of S$678m" "Raffles Medical posts 27% rise in earnings to $12m for 2005" "S'pore sees increased entrepreneurial activity" "APB reports 16% rise in Q1 profit to S$39.4m" "More amenities, upgrading works for growing GRC" "Ang Mo Kio to be upgraded into 'seamless town', says PM" "Barrier-free access soon in all housing estates, transport system" "Surplus to be shared, says DPM Wong" "Drug abuse arrests hit yet another record low in 2005" "CPF members to receive bonus under DPS" "Number of school dropouts down: Education Ministry" "S'pore received record number of tourists in 2005" "Singapore's Q4 GDP up annualised 13%, 2006 growth forecast raised to 4%-6%" "Wages up, most companies adopting flexible wage system" "Singapore's December retail sales up 7.4% to S$2.8b""SIA passenger traffic up in January"

Tuesday, February 23, 2010

Charlie Munger : Basically, Its over....

Warren Buffett has a partner who is equally brilliant - Charlie Munger. His view of where America is headed stands in stark contrast Buffett's unflaggingly optimistic view of America in the long term ("You can't bet against America and win"[Link]). In my previous post I discussed 2 outcomes for the American economy and here's Munger's desciption of one of them.


In Munger's parable, the nation's end was marked by rise of casino gambling....

"As their affluence and leisure time grew, Basicland's citizens more and more whiled away their time in the excitement of casino gambling......." - Charlie Munger.

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[Link]



Basically, It's Over :A parable about how one nation came to financial ruin.

By Charles MungerUpdated Sunday, Feb. 21, 2010, at 3:30 PM ET

In the early 1700s, Europeans discovered in the Pacific Ocean a large, unpopulated island with a temperate climate, rich in all nature's bounty except coal, oil, and natural gas. Reflecting its lack of civilization, they named this island "Basicland."

The Europeans rapidly repopulated Basicland, creating a new nation. They installed a system of government like that of the early United States. There was much encouragement of trade, and no internal tariff or other impediment to such trade. Property rights were greatly respected and strongly enforced. The banking system was simple. It adapted to a national ethos that sought to provide a sound currency, efficient trade, and ample loans for credit-worthy businesses while strongly discouraging loans to the incompetent or for ordinary daily purchases.
Moreover, almost no debt was used to purchase or carry securities or other investments, including real estate and tangible personal property. The one exception was the widespread presence of secured, high-down-payment, fully amortizing, fixed-rate loans on sound houses, other real estate, vehicles, and appliances, to be used by industrious persons who lived within their means. Speculation in Basicland's security and commodity markets was always rigorously discouraged and remained small. There was no trading in options on securities or in derivatives other than "plain vanilla" commodity contracts cleared through responsible exchanges under laws that greatly limited use of financial leverage.


In its first 150 years, the government of Basicland spent no more than 7 percent of its gross domestic product in providing its citizens with essential services such as fire protection, water, sewage and garbage removal, some education, defense forces, courts, and immigration control. A strong family-oriented culture emphasizing duty to relatives, plus considerable private charity, provided the only social safety net.


The tax system was also simple. In the early years, governmental revenues came almost entirely from import duties, and taxes received matched government expenditures. There was never much debt outstanding in the form of government bonds.


As Adam Smith would have expected, GDP per person grew steadily. Indeed, in the modern area it grew in real terms at 3 percent per year, decade after decade, until Basicland led the world in GDP per person. As this happened, taxes on sales, income, property, and payrolls were introduced. Eventually total taxes, matched by total government expenditures, amounted to 35 percent of GDP. The revenue from increased taxes was spent on more government-run education and a substantial government-run social safety net, including medical care and pensions.


A regular increase in such tax-financed government spending, under systems hard to "game" by the unworthy, was considered a moral imperative—a sort of egality-promoting national dividend—so long as growth of such spending was kept well below the growth rate of the country's GDP per person.


Basicland also sought to avoid trouble through a policy that kept imports and exports in near balance, with each amounting to about 25 percent of GDP. Some citizens were initially nervous because 60 percent of imports consisted of absolutely essential coal and oil. But, as the years rolled by with no terrible consequences from this dependency, such worry melted away.
Basicland was exceptionally creditworthy, with no significant deficit ever allowed. And the present value of large "off-book" promises to provide future medical care and pensions appeared unlikely to cause problems, given Basicland's steady 3 percent growth in GDP per person and restraint in making unfunded promises. Basicland seemed to have a system that would long assure its felicity and long induce other nations to follow its example—thus improving the welfare of all humanity.



But even a country as cautious, sound, and generous as Basicland could come to ruin if it failed to address the dangers that can be caused by the ordinary accidents of life. These dangers were significant by 2012, when the extreme prosperity of Basicland had created a peculiar outcome: As their affluence and leisure time grew, Basicland's citizens more and more whiled away their time in the excitement of casino gambling. Most casino revenue now came from bets on security prices under a system used in the 1920s in the United States and called "the bucket shop system."


The winnings of the casinos eventually amounted to 25 percent of Basicland's GDP, while 22 percent of all employee earnings in Basicland were paid to persons employed by the casinos (many of whom were engineers needed elsewhere). So much time was spent at casinos that it amounted to an average of five hours per day for every citizen of Basicland, including newborn babies and the comatose elderly. Many of the gamblers were highly talented engineers attracted partly by casino poker but mostly by bets available in the bucket shop systems, with the bets now called "financial derivatives."

Many people, particularly foreigners with savings to invest, regarded this situation as disgraceful. After all, they reasoned, it was just common sense for lenders to avoid gambling addicts. As a result, almost all foreigners avoided holding Basicland's currency or owning its bonds. They feared big trouble if the gambling-addicted citizens of Basicland were suddenly faced with hardship.

And then came the twin shocks. Hydrocarbon prices rose to new highs. And in Basicland's export markets there was a dramatic increase in low-cost competition from developing countries. It was soon obvious that the same exports that had formerly amounted to 25 percent of Basicland's GDP would now only amount to 10 percent. Meanwhile, hydrocarbon imports would amount to 30 percent of GDP, instead of 15 percent. Suddenly Basicland had to come up with 30 percent of its GDP every year, in foreign currency, to pay its creditors.


How was Basicland to adjust to this brutal new reality? This problem so stumped Basicland's politicians that they asked for advice from Benfranklin Leekwanyou Vokker, an old man who was considered so virtuous and wise that he was often called the "Good Father." Such consultations were rare. Politicians usually ignored the Good Father because he made no campaign contributions.

Among the suggestions of the Good Father were the following. First, he suggested that Basicland change its laws. It should strongly discourage casino gambling, partly through a complete ban on the trading in financial derivatives, and it should encourage former casino employees—and former casino patrons—to produce and sell items that foreigners were willing to buy. Second, as this change was sure to be painful, he suggested that Basicland's citizens cheerfully embrace their fate. After all, he observed, a man diagnosed with lung cancer is willing to quit smoking and undergo surgery because it is likely to prolong his life.

The views of the Good Father drew some approval, mostly from people who admired the fiscal virtue of the Romans during the Punic Wars. But others, including many of Basicland's prominent economists, had strong objections. These economists had intense faith that any outcome at all in a free market—even wild growth in casino gambling—is constructive. Indeed, these economists were so committed to their basic faith that they looked forward to the day when Basicland would expand real securities trading, as a percentage of securities outstanding, by a factor of 100, so that it could match the speculation level present in the United States just before onslaught of the Great Recession that began in 2008.
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The strong faith of these Basicland economists in the beneficence of hypergambling in both securities and financial derivatives stemmed from their utter rejection of the ideas of the great and long-dead economist who had known the most about hyperspeculation, John Maynard Keynes. Keynes had famously said, "When the capital development of a country is the byproduct of the operations of a casino, the job is likely to be ill done." It was easy for these economists to dismiss such a sentence because securities had been so long associated with respectable wealth, and financial derivatives seemed so similar to securities.

Basicland's investment and commercial bankers were hostile to change. Like the objecting economists, the bankers wanted change exactly opposite to change wanted by the Good Father. Such bankers provided constructive services to Basicland. But they had only moderate earnings, which they deeply resented because Basicland's casinos—which provided no such constructive services—reported immoderate earnings from their bucket-shop systems. Moreover, foreign investment bankers had also reported immoderate earnings after building their own bucket-shop systems—and carefully obscuring this fact with ingenious twaddle, including claims that rational risk-management systems were in place, supervised by perfect regulators. Naturally, the ambitious Basicland bankers desired to prosper like the foreign bankers. And so they came to believe that the Good Father lacked any understanding of important and eternal causes of human progress that the bankers were trying to serve by creating more bucket shops in Basicland.

Of course, the most effective political opposition to change came from the gambling casinos themselves. This was not surprising, as at least one casino was located in each legislative district. The casinos resented being compared with cancer when they saw themselves as part of a long-established industry that provided harmless pleasure while improving the thinking skills of its customers.

As it worked out, the politicians ignored the Good Father one more time, and the Basicland banks were allowed to open bucket shops and to finance the purchase and carry of real securities with extreme financial leverage. A couple of economic messes followed, during which every constituency tried to avoid hardship by deflecting it to others. Much counterproductive governmental action was taken, and the country's credit was reduced to tatters. Basicland is now under new management, using a new governmental system. It also has a new nickname: Sorrowland.

Saturday, February 20, 2010

Economy : Where we are headed...

"A Golden Age for Asia lies ahead" - Tony Tan 18 Jan 2010[Link]

Hmmm...why do I get worried everytime I hear them say the word "golden"? I think it will all become very clear about a year from now when one of 2 possible theoretical outcomes will come true. I discuss this later after I recap where we have been in the past few years.

In his recently published book, Hank Paulson described Bernanke as “easily one of the most brilliant people I've known". For the former Goldman Sachs CEO to say that about you, you have to be a real genius given the caliber of people they hire into Goldman. So we have this situation where we have the finest economic minds tackling the gravest economic problem we have seen in the past 70 years. Last week we saw American politicians throwing spanners at poor Geithner for the AIG bailout - why was Goldman paid in full for the CDS contracts with AIG? Why must AIG be bailed out? Why did Geithner call an ex-Goldman man 20 times over a few days based on his phone record during that time? Geithner defended himself well throwing a few fireballs back at those senators. The politicians who are going for elections in Nov 2010 had to show some anger as the Americans citizens are fed up with the 9.7% unemployment rate and bankers who continue to receive fat bonuses after the govt bailed them out. Geithner told those senators if there was no bailout, if the Fed and Treasury did not intervene, the entire system would have sank and the unemployment rate would have gone up to 20+%. The Great Depression scenario did come in handy to defend against a barrage of accusations by politicians now looking back at the bailout with the benefit of hindsight and a big microscope. The people are unhappy someone has to be blamed and the more blame they can put onto Geithner they more likely they will get re-elected .....for being tough on bankers, tough on Goldman and tough on beneficiaries of the bailout. This whole painful unpleasant hearing was conducted to find out why NY Fed failed to disclose in a timely manner that the bailout money to AIG was used quickly to pay Goldman and other banks - the insinuation is there is some kind of conspiracy to cheat the American people.

All our dailies, a few weeks ago, featured an article "The Bernanke Counoudrum"[Link] by Paul Krugman about how the support for Bernanke has faded. It all happened quite suddenly after the Democrats were defeated in Massachusetts. Bernanke is due for reappointment and just a few weeks ago there was little doubt that he will get the support he needed. Bernanke was credited with rescuing America from Depression II and preventing a collapse of the system. However, the defeat in Massachusetts reminded American leaders that the voters are still very angry with the economic mess and see the Fed as part of the problem. A number of US senators who earlier wanted to reappoint Bernanke succumbed to populist demand/anger to replace him. Krugman explained that Bernanke, after heroic efforts to rescue the system, went back to the mainstream and failed to bring about banking reform and keep unemployment down. A few days ago, Obama to shore up support for his agenda, brought back 82 year old former Fed Chairman Paul Volcker, to push for a set of banking legislation better known as Volcker's Rule to keep a bank from having anything to do with investment vehicles. A few days later in a town hall speech in Ohio, Obama spoke about how the past decade had been difficult for middle class families and how he will 'fight' to keep their dreams alive[Link]. The American middle class in the past 2 decades has been decimated:

"The middle class has been under assault for a long time. Too many Americans have known their own painful recessions long before any economist declared that there was a recession. We've just come through what was one of the most difficult decades the middle class has ever faced -- a decade in which median income fell and our economy lost about as many jobs as it gained." - Obama in his Ohio speech.

It is unfortunate for Obama that he came to power at this time and has to face economic problems which over time may have become almost intractable. I'll talk about what all this has to do with our own economy a little later but first you have to understand what happened to the Americans before we get into that.

Here is what happened to the Americans explained in 3 steps:


1. Globalisation and free trade, contrary to popular opinion, did not benefit the American worker:


The graph above compiled by Ravi Batra shows that as the volume of trade increased, the real wages of American workers fell. What was happening isn't difficult to understand. American corporations shifted their manufacturing to the far east where wages were lower. The real wages of American workers fell as productivity increase cannot overcome the low wages of Asian countries. Wages rose in places like Singapore & China, however, govts make sure that they lag behind productivity gains. Wages of workers form the demand for goods, however, because of the wage-productivity gap, there has to be another source of money other than wages ....which brings me to the next point.


2. To consume all the goods produced and keep the global economic system going, consumers in western countries took up a rising level of debt as a % of their GDP:



3. As US consumed much more that it produced, it had a trade deficit. This was funded by sales of US treasuries. The Japanese and Chinese snapped up these treasuries - lending the Americans money to consume goods made in Asia. Over time, US became the largest net debtor nation in the world.

Every recession that came in the last 20 years was solved the same way - getting the US consumer to borrow more to consume. We have Alan Greenspan to thank for that - the maestro waved his magic wand to cut interest rate and keep the easy money flowing every time there was a recession and presto! the American consumer starts spending and the rest of the world is bailed out of the recession. But there was never a reset of debt levels with every business cycle - debt just got bigger. At the same time unit labor cost fell and real wages fell which meant that increased demand was generate largely by rising debt. When Obama took office, after talking to his advisors, the best minds in economics, the way to get out of the Great Recession he said was to get credit flowing again so that Americans can borrow for college education, cars, home purchases etc. Don't repeat the mistake of the Great Depression when the Fed tightened as the economy sanked. Paul Krugman, a Keynesian faithful said the US govt had the correct strategy to borrow and incur huge deficits to stimulate the economy. Easy money + huge govt deficits was the solution - don't repeat the mistake of the Great Depression.

If you watch CNBC often enough (for entertainment?), you will catch this feller in a trader's uniform that is saying something like this:

"It is widely believed that the Great Depression was caused by the Fed tightening the money supply...however there is another school of thought that the Great Depression was caused by the mountain of debt...." - CNBC Advert for Squawk Box.


There is another (minority) school of thought that the Great Depression was due to a high level of debt. That will mean that the current measures taken by govts will only have temporary effect because the high level of debt is not going to disappear soon. If debt shrinks, demand shrinks and the global economy will re-enter recession and perhaps one worse than the one we have seen because govts are now themselves in debt and their ability to intervene will be limited. Bernanke and company prosposed the only way that is politically feasible because alternative was to allow the economy to fall and intervene later. The Jim Rogers aka Austrian way would have been too painful. However, the problems faced by Obama was not due to any of his decisions and created over 3 decades may be completely insolvable without economic pain by the time he took office according this alternative school of thought. Jim Jubak looking at the huge US federal deficits said the numbers don't add up - for the US federal deficits to shrink, the US economy needs to grow by 4% in 2011 and beyond just to keep its debt manageable...4% growth is unlikely ...this govt debt will weigh on the US economy for many years to come..some Americans are screaming at Obama not to put their grand children into debt. If Obama didn't do what he did, we will probably be seeing 15-20% unemployment and Americans will be screaming anyway. Little can be done in 1 year for a problem that was created over 3 decades.

While the global economy appears to be growing looking at numbers and stock markets have surged from the March 2009 lows, you have to be mindful of the 2 alternate futures being played out. Greece was just a sample of what can come. Marc Faber said warned not to confuse the asset reflation with sustainable recovery. Print enough money and everything from Gold, equities, oil to paintings start to move up. There is little sign that economic growth has reached some kind of "escape velocity" to overcome the mountain of debt built up over the years. If this economy lose momentum, we will be in for tough years ahead.


“Singapore’s future over the next five to 10 years is an 'optimistic' one, and and the tourism sector will reflect that,” - MM Lee, dinner at Tanjong Pagar, 18 Feb 2010.


Our most famous economic forecaster, the one who said we were in a 'Golden Period' in 2007 is now saying things will be good for the next 5 to 10 years. Maybe that explains GIC's strategy to invest billions in ANA's hotel chain[Link] after losing hundreds of millions in Stuyvesant Town[Link]. Even if one has faith that 10 years will be good, should there be some contigency planning? Given that we have been through 2 crisis and 3 recessions in the past 10 years, aren't there lessons learnt about the global economy we live in? Investing our reserves in risky assets that will be hit badly during crisis is not a good idea - when we need our reserves most, they will be stuck in assets that have fallen sharply in value. Once our economy showed the 1st signs of recovery, the govt starts to go back to its old habit - school fees have been increased[Link], ERP charges hike up, housing costs up etc ....actions that passes the financial risk to Singaporean households who have to strain their balance sheet to meet these hikes. This type of perma-growth assumptions will make us more vulnerable in future crisis e.g. families taking up 30 yr mortgages to pay for public housing. In the ESC (Economic Strategy Committe) report there is no discussion on stabilisers that will help ordinary Singaporeans in the next recession/crisis e.g. unemployment issurance. It is a strategy on one track i.e.how we can keep growing the economy. The moment we discover Obama's plan going wrong, you can throw the whole ESC report into the dustbin because our export led globalised economy cannot escape from the unscathed when the US economy tanks.

Dr. Lim Hock Siew's Dream & Our Dream....

Ordinary Singaporeans dream of a better quality of life not perpertual rapid GDP growth which seems to be the aim of the PAP govt:

"That is why the government decided in the past five years that it was better to grow the economy and manage the accompanying social pressures rather than slow down the economy." - MM Lee [Link]
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MM Lee warned that if we don't work harder and keep productivity rising, the govt will have to import more foreigners to maintain GDP growth otherwise MM Lee explained our asset prices (HDB prices) will fall. Not only we have to get into high level of debt to own these HDB flats, we have to keep working harder to maintain the lofty prices. 4 decades of PAP rule and we are still on a threadmill the speed of which is increased year after year. Singaporeans work the longest hours in the world and we frequently rank no. 1 in the world for stress level[Link] yet in an interview with NatGeo, MM Lee said "the spurs are not stuck into the hide, that is their problem". Where does all this hard work, sweat and stress lead to? Our quality of life is ranked 70 by International Living[Link] out of 194. The top 5 countries are France, Australia, Switzerland, Germany and Luxemberg. Singapore is ranked below Japan, Taiwan and S. Korea. Our dream in the 80s was to achieve the Swiss standard of living....more correct to say Swiss quality of life because some people confuse standard of living with GDP.
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What has all this got to do with Dr. Lim's dream for a more socialistic Singapore?
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Lets look at the political system of the top 4 countries:
1. France - most of the time under socialist govts after WW2...power oscillates between right and left.
2. Australia - either under liberal democratic or labour parties after WW2.
3. Switzerland - power shared between right leaning Swiss People's Party and socialistic Social Democratic Party.
4. Germany - mostly under liberal democratic govts.
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If you look through the list of countries with the highest quality of life, most of them are under liberal democratic, social democratic or labor parties. Liberal democracy which is the dominant form of democracy in many countries adopts many features of socialism such as independent worker's unions, social safety nets, free medical care, minimum wages etc. to narrow the inequality under a free market system where not everyone can be successful financially which may create the gap in the quality of life between the rich and the poor. This approach, called Third Way in a number of countries and by various polical parties, has been adopted into policies in last few decades as the neutral ideology stands between capitalism and classical socialism, in order to achieve the best economic outcomes and a high quality of life.
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In Singapore, we have an elitist semi-authoritarian govt that gives welfare to itself and send its citizens to face brutal competition in their form of unbridled capitalism. Today, the only people I know in Singapore with pension and free medical care are our elites. For the elites, they have job security too in the form top jobs in GLCs. If you're cynical enough, you can say we have socialism for the elites and brutal capitalism for the ordinary citizens. Instead of welfare for the poor and safety nets for the ordinary folks, the PAP goes out of its way to direct state resources and opportunities to a small number of elites - that is elitism and the PAP justifies this by saying their talent is so rare and precious only the highest salaries can compensate for their "sacrifice". What the PAP system has created is the reverse of what social or liberal democracies has achieved - the highest income inequality in the developed world, an emerging ultra-underclass and 30% of the population earning less that $1100 a month in a country where a 3 room apartment can cost $400K. How did we get here? Singapore like many other countries would have eventually evolved a more balanced centrist neutral approach to development because in every country you will find many talented individuals willing to stand up to offer viable alternatives. In 1963, this possibility was squashed when the Internal Security Dept arrested 111 socialists and preventing them from running for coming elections. This created a climate for fear that lasted until today, and continued repression of political alternatives has led to great imbalance in policy making that has resulted in many problems faced by ordinary Singaporeans today.
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Dr. Lim's dream of a more equal society "in which there is no exploitation of workers and the oppressed" is also the dream of many ordinary Singaporeans and this is the future we want for our children. The PAP's dream of cheaper, better and faster will never get us there. Making Singaporeans cheaper, working harder, longer ...work until you die only serves the PAP's other interests which includes the extensive network of GLCs.
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Dr. Lim was detained for 19 years for his ideals....ideals of equality and democracy that our society needs so badly today.
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"A Home Affairs Ministry statement on his release had said that he was arrested under the Internal Security Act for his involvement in Communist United Front (CUF) activities."
- Straits Times

If Dr. Lim was ever involved in any Communist United Front activities, they had 19 years to produce proof and put him on trial. Why didn't they? They kept him for 19 years because he refused to sign false confessions. This grave injustice is as much tragedy for Dr. Lim as it is for every other Singaporean for after 4 decades of independence we are still waiting for our "democratic society based on justice and equality".

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Lim Hock Siew's dream[Link]

IT IS a sweltering day as you walk by the row of repainted shophouses along Balestier Road.

As you push open the glass doors and duck inside for a welcome draught of air-conditioning, you meet a group of elderly patients waiting expectantly to see their family doctor.

The name on the door plate of his office may not ring a bell for the young but to older Singaporeans, it jumps right out of Singapore's turbulent political history: Dr Lim Hock Siew.

Enter his simply furnished room, and you see him at a desk stacked with books, stationery and newspapers. An eye chart is pasted on a glass cabinet displaying photos of him as a dashing young man.

The 79-year-old doctor, in his white long-sleeved shirt, greets you with a soft, occasionally wheezing, yet otherwise firm voice. He is not in the best of health, having suffered kidney failure last year and taken a six-month break to recuperate.

As he is undergoing dialysis three times a week, he would have preferred to extend his break except that his clinic partner, Dr Mohd Abu Bakar, 76, was overwhelmed by the patient load.

So he returned to half-day work last month, seeing around 30 patients every morning, and plans to do so as long as his health permits. 'It's kind of an ethical obligation to look after them, and I can keep myself mentally occupied,' he says.

The name of his clinic harks back to his socialist days as a political activist, first with the People's Action Party (PAP) and then with its arch rival, Barisan Sosialis. It is called Rakyat, which means 'people' in Malay. It was set up by Dr Lim and fellow Barisan Sosialis leader Dr Poh Soo Kai in 1961.

Its consultation fees are no different from other clinics' - $20 to $30. But Dr Lim charges a reduced rate for poorer patients and gives free treatment to the neediest. 'I don't deny help to those who need it,' he says.

Dr Lim's sense of compassion and empathy for the poor is well known. At a time when the unprofessional and unethical practices of some doctors are hogging the headlines, the mere mention of Dr Lim's name evokes hushed respect among his peers.

Even pro-PAP Singaporeans who would be horrified by the prospect of a Barisan Sosialis government admit to having a grudging admiration for Dr Lim as a man who has the courage of his convictions.

Dr Vivian Balakrishnan, Minister for Community Development, Youth and Sports, once singled out Dr Lim as a politician he admired for his strength of character and ability to sacrifice for his beliefs.

Like many of his former leftist colleagues, Dr Lim feels compelled to give his side of the story before time runs out.

In recent years, a cottage industry has sprung up providing alternative histories of Singapore. Books included memoirs by former communist underground leader Fang Chuang Pi, former Barisan Sosialis leader Fong Swee Suan and former Parti Rakyat Singapura leader Said Zahari. Just three months ago, the Fajar Generation, a book on the University Socialist Club (USC) of the then-University of Malaya, was launched.

In a nutshell, Dr Lim's is a story of how an idealistic student activist joined and campaigned for the PAP in the 1950s and then fought against the ruling party in the 1960s and paid a very heavy price for his beliefs and convictions.

In 1963, he was arrested under Operation Cold Store and detained without trial for nearly 20 years before he was released in 1982.

A Home Affairs Ministry statement on his release had said that he was arrested under the Internal Security Act for his involvement in Communist United Front (CUF) activities.

Dr Lim refused to agree to any conditions that would have granted him early release and ended up in the record book as the second longest-held political prisoner after his leftist colleague Chia Thye Poh, who served 23 years.

Today, 28 years after his release, he still dreams of a socialist Singapore in which there is no exploitation of workers and the oppressed.

Political awakening

BORN in 1931 to a poor family, Dr Lim spent the 1942-45 war years helping his father sell fish in the Kandang Kerbau market. Both his parents were illiterate, but they encouraged their 10 children to study.

He was the only English-educated child in his family. As the top boy in Rangoon Road Primary School, he gained entry to Raffles Institution (RI) in 1946.

It was in RI that he picked up a book by the first prime minister of India Jawaharlal Nehru and became inspired by his socialist ideals.

Going on to study medicine at the then-University of Malaya here, Dr Lim lapped up the works of philosopher Karl Marx and economist Adam Smith, and books on the British Labour Party and Mao Zedong's communist struggle in China. His political awakening was heightened by the anti-colonial struggles raging around the world.

As he recalls, most of the university students then were indifferent to politics. They were afraid of being arrested and preferred to pursue degrees and jobs.

As one of the best and brightest of his generation, he says he felt a deep, patriotic obligation to do something for Singapore and its people in the struggle against the British colonialists ruling Singapore.

He plunged into campus activism, becoming a founding member of the anti-colonial USC, which was formed in 1953.

In 1953, Dr Lim met the young Cambridge-educated lawyer Lee Kuan Yew, who was helping to defend eight USC students charged by the British for sedition because of an article in the USC's journal, Fajar.

They won the case and Mr Lee was acclaimed as their champion. The USC rallied behind him and his associates when they set up the PAP several months after the sedition trial.

Noting that the party's original Constitution showed every mark of a socialist, anti-colonial party, Dr Lim recalls that the USC members went around persuading various groups to support the PAP. The 1955 elections saw the 24-year-old Dr Lim stumping for PAP at mass rallies.

PAP was then identified with the working class and Chinese-speaking masses. But the facade of unity maintained by the motley crew of English-educated intellectuals, Chinese-educated socialists, professionals and trade unionists could not last.

The ideological differences began to surface. One episode in 1957 that stuck in Dr Lim's memory was the plot by a group of radical unionists within the party to oust PAP strongman Ong Eng Guan and several others from the PAP leadership. They opposed Mr Ong as they viewed him as anti-left and an opportunist.

He felt then that the move was 'most unwise' as it would create party disunity and provoke a crackdown by the colonial government.

As he recollects, he and several USC members tracked down three of the prime movers - Mr Chen Say Jame, Mr Goh Boon Toh and Mr Tan Chong Kin - and sought to dissuade them. They failed. Dr Lim believes that what he did then probably aroused Mr Lee's suspicions that he was in cahoots with the leftists.

The central executive committee (CEC) elections resulted in a deadlock with six seats going to the Lee group and the other six going to the leftists. Shocked by the humiliating defeat of his associates, Mr Lee refused to take office. Dr Lim says he tried to persuade him to do so - to no avail.

As it turned out, five leftist CEC members were arrested by the Lim Yew Hock government in an anti-communist operation - and Mr Lee and company were able to regain control of the party.

In 1958, they introduced a 'cadre' system in which only appointed members could vote for the CEC. This marked the beginning of the leftists' disillusionment with Mr Lee, says Dr Lim.

Break over merger

WHEN the 1959 elections came around, Dr Lim says he and Dr Poh offered themselves 'in good faith' as PAP candidates. The answer was negative. 'He did not trust us,' says Dr Lim, referring to Mr Lee.

After the historic elections which swept the PAP to power for the first time, Dr Lim discovered that his party membership was not renewed.

From the sidelines, the government doctor witnessed the increasing acrimony between Mr Lee's group and the leftists which was to lead to what is called the Big Split of 1961.

The two factions were locked in a monumental struggle over the issues of merger with Malaya, Chinese education and the continuing detention of students and unionists.

Racked by dissension, the PAP was on the brink of collapse after losing two by-elections in Anson and Hong Lim in 1961.

Concerned over the leftist challenge within his party, Mr Lee moved a motion of confidence in the 51-seat legislative assembly. The PAP survived when 27 voted aye but 13 dissident assemblymen abstained.

Expelled from the party, the dissidents formed Barisan Sosialis with other defectors from the PAP in August 1961. The party was led by Mr Lim Chin Siong.

It was at this juncture that Dr Lim joined the new party. He had to give up a scholarship for further study and quit the civil service.

The Barisan Sosialis then, he recalls, was a very formidable organisation filled with thousands of dedicated people and 'scores upon scores of university graduates', ready to form an alternative government.

As a CEC member, Dr Lim helped to run a 'brain trust' which consulted a group of more than 50 graduates from the then-Nanyang University and University of Malaya and prepared position papers.

'We didn't have a lack of talent. We had more talent than we wanted,' he says.

In his recollection, the biggest issue that divided PAP and Barisan was merger with Malaya to form Malaysia.

Fearing that Singapore would fall to the communists, Malayan Prime Minister Tunku Abdul Rahman had proposed on May 27, 1961 that Singapore, Sabah, Sarawak and Brunei merge with Malaya to form the federation of Malaysia.

Singapore would have 15 seats in the federal house of representatives, less than what it was entitled to on the basis of population ratios, but a debatable trade-off for Singapore's exclusive autonomy over labour and education.

Although the leftists were committed to the ultimate goal of unification between the peninsula and the island, they argued that these terms for merger would make Singaporeans 'second-class citizens'.

The main sticking point, as Dr Lim points out, was that there were 'two sets of citizenship: one for Malaysians and one for Singaporeans. Singaporean citizens could not participate in Malaysian politics, much less be proportionally represented in the federation'.

The battle between both parties reached its culmination during the referendum on Sept 1, 1962, in which the PAP Government cleverly devised three alternatives for merger on varying terms with no option to say no.

PAP won by a large margin, with 71 per cent of votes in favour of its 'Alternative A' against just over 25 per cent who cast blank votes, which the Barisan called for to protest against the 'sham referendum'.

Imprisonment

THEN came the big crackdown. On Feb 2, 1963, more than 100 leftists and unionists were arrested in a massive security exercise known as Operation Cold Store, aimed at putting communists and suspected communists out of circulation.

On the mass arrests which changed the power balance in Singapore irrevocably, Dr Lim reflects: 'We lost not to Lee but to the British, who crushed the leftists for strategic, not security reasons.'

When he speaks about his nearly 20 years in detention, there is an edge to his otherwise calm voice.

Year after year, he recounts, attempts were made to break the spirit of prisoners through solitary confinement and interrogations, to make them confess their involvement in communist activities.

Dr Lim became a counsellor of sorts to the prisoners, encouraging them to talk about the physical and psychological abuse they faced during their interrogations. Some broke down in tears as they relived their experiences.

In March 1972, Dr Lim released a statement about his detention and his experience in being taken to the Internal Security Department (ISD) headquarters on Robinson Road two months earlier. He had insisted on being released, saying that 'history had vindicated my stand' that the 1963 merger would not work.

He says that ISD officers wanted him to issue a public statement that he was prepared to give up politics and devote his time to medical practice, and to express support for parliamentary democracy.

Dr Lim demanded to be released unconditionally, saying that he should not need to give up politics if there was parliamentary democracy.

He says that he was asked to 'concede something' so that his long detention could be justified. He replied that he was not interested in 'saving Mr Lee's face', and would not issue any statement to condemn his past political activities, which he said were 'legitimate and proper'.

When asked for the Government's response, a Ministry of Home Affairs spokesman says: 'Contrary to Lim Hock Siew's claims that he was an opposition politician carrying out 'legitimate and proper' activities through the democratic process, Dr Lim was in fact a prominent Communist United Front leader who, along with other CUF leaders, had planned and organised pro-communist activities in support of the Communist Party of Malaya, which employed terror and violence in their attempt to overthrow the elected governments of Singapore and Malaysia.'

In 1978, Dr Lim was released from detention and placed in Pulau Tekong under certain restrictions. A government statement had described him as a CUF member who refused to give a written undertaking that he would not be involved in communist activities and renounce the use of force to change government.

Dr Lim's view was that since he had never advocated violence, he should not have to renounce it. 'It's like making me sign a statement that I would not beat my wife,' he says.

He spent four years on Pulau Tekong before it became an army training area. There, he read medical books and became the only doctor for the few thousand villagers on the island. In appreciation, grateful villagers would ply him and his wife with durians, prawns and fish.

Release

FINALLY, on Sept 6, 1982, the Government allowed him to live on Singapore island, on the understanding that he would concentrate on his medical practice and abide by various conditions.

Asked how he coped with the long incarceration, he puts it down to an unshakeable conviction that his political stance is right.

'We were the leaders of the main opposition party, supported by the workers in Singapore, and we cannot betray our supporters. So we stuck to the bitter end. It's a matter of intellectual integrity.'

Would he shake hands with Mr Lee? His reply: 'It is for the oppressed to be magnanimous, not the oppressor. I'll forgive him and shake hands with him if he admits to his error and apologises to me and my wife.'

Dr Lim's wife Beatrice Chen, who is a nephrologist or kidney specialist, helps to treat her husband. She declines to be interviewed as she shuns publicity.

They met in 1958 when they were working together at the Singapore General Hospital, and married in 1961.

Dr Lim was detained two years later. For the next 15 years, they saw each other for half an hour each week, separated by a glass panel, and spoke by telephone.

'The fact that we can see each other is a relief,' he says. 'Our common struggle was a unifying force. We understood each other. She kept on encouraging me, giving me moral support...it was very hard for her. She's a great woman.'

The couple have one son, who is now working in the National University of Singapore. 'He was five months old when I was arrested. When I came out, my wife was in menopause. I missed the joy of bringing up my own son.'

When Dr Lim is not seeing patients, he catches up on current affairs, surfs the Internet, and reads political philosophy - currently, Bertrand Russell's A History Of Western Philosophy. He also paints as a hobby.

Step into his condominium home off Mountbatten Road, and you will be greeted by a visual feast of paintings - of scenery, flowers and women - all strictly non-political.

But one has a Chinese couplet which reads: Befriend a thousand books, and have the spine to stand by your beliefs.

Wednesday, February 17, 2010

An Extremely Moving Story....

Dr. Cai is Singapore's most famous taxi driver at least among netizens many of whom read his blog to learn about his life as a taxi driver. Dr. Cai is also probably the most educated taxi driver in Singapore . He has a Phd from Stanford.

"Identification of novel recognition motifs and regulatory targets for the yeast actin-regulating kinase Prk1p".Molecular biology of the cell 2003;14(12):4871-84.2003: Huang Bo; Zeng Guisheng; Ng Alvin Y J; Cai Mingjie [Link]
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As a researcher, satisfaction comes from getting your papers accepted by reputable journals. You publish a few every year and at the end of the year, you list these publications as your accomplishments to your boss e.g dept head. If they are any good, they will be cited by other researchers in the same area - the productivity and quality of a researcher is sometimes measured by the h-index[Link] based on number of citations received for your publications. Your research work may or may not be worth much, may or may not be discovered by others had you not done it, may or may not lead to a breakthrough and so on. Much of the research work goes into a huge pile and only a very small handful find their way into products that benefits anyone. I ought to know because I read about 50-100 papers every week to find solutions for various complex problems. There is almost nothing more different from research work in molecular biology than driving a taxi. In taxi driving, you take a passenger from point A to point B - the usefulness of your work is clear, immediate and measurable.
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Very few of us will know what "yeast actin-regulating kinase Prk1p" is but many of us have been touched by Dr. Cai's stories as a taxi driver[his blog]. His stories tell us something about people, life, happiness, sadness, .....
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I was very moved by this story.....one about a true Singapore tragedy....
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Wednesday, February 10, 2010

July 22, 2009. Wednesday: The unbearable heaviness of being

Forty minutes into the evening peak hours, I was waiting at the Bukit Merah Central taxi stand.

Despite its proximity to Chinatown and the financial district, and its long history as the epicenter of one of the earliest housing estates in Singapore, Bukit Merah Central is far less glamorous than other regional centers. There are no modern attractions such as shopping malls, cinemas, restaurants, or disco pubs to draw the crowds. There used to be a public swimming complex next to the bus terminal, but it had been shut for many years. The only saving grace was an NTUC Fairprice supermarket, one of the largest in town.

I noticed an Indian woman walking slowly in my direction. She lumbered along, carrying several Fairprice grocery bags, her body tilting from side to side with each heavy step.

She finally reached my taxi and motioned me to open the trunk so she could place her bags inside. Then she came in, sat in the front seat and told me to go to Telok Blangah Way, a five to eight minutes drive depending on the traffic lights.

Although the short distance of the trip was a disappointment to me, it was expected. Most people taking taxis from here were residents of the neighboring HDB estates with too many grocery bags to go home by bus. My mind was occupied by something else. I glanced at her and asked, “What do you have in your bags?”

“What do you mean?” She looked at me as if she found my question rudely intrusive.

“Oh, nothing,” I quickly explained. “I just want to say that if you have seafood in there, I’d like to put some newspaper underneath your bags, since I had some troublesome experience before...”

“No seafood.” She cut me off. “Only fruits and vegetables.”

I apologized for asking the question. She said it was okay, she understood my concern.

From close up, I realized she was younger than I thought when I saw her from a distance. She was probably in her late forties, and wore an oversized brown dress.

She turned to me and asked, “What about durian? You mind if I have durian?”

“No. Durian is ok,” I said with a smile. “The smell of durian doesn’t stay long.”

“Yeah,” she said. “Otherwise, how am I supposed to carry it? Buses don’t allow it. MRT don’t allow it. If taxis also don’t allow it...”

“I am sure most taxis will allow it,” I said.

Looking for something to say, I asked, “You are not working today?”

She gave me an “are you making fun of me?” kind of look and said, “You find me a job and I will work.”

I felt stupid. I was quiet for a moment, trying to imagine what other good-natured taxi uncles would do in this case. I then told her that if she was looking for a job she could look in the newspapers, talk to friends, or ask her MPs for help.

We were reaching her stop, which was in a carpark next to an HDB block. She took out her wallet, held it in her hand, and said slowly, “Yeah. But I have this arthritis for many years. I have never been in a working condition.”

That was what caused her heavy steps, I realized.

I tried to cheer her up. “That’s okay. You don’t have to work then. At least you have your husband to support you.”

“My husband passed away,” she said under her breath. Her hands stopped opening her wallet.

I stuttered, “I…I’m sorry.”


She looked at me, her eyes two ice cubes melting under the sun. “You know a month and half ago, in the news, a husband and a son jumped off a building...”

As if struck by lightning, I felt a current bolt from my scalp to my feet. “My god. That’s your…” I froze in shock.


“Yes. That’s my…husband and…my boy.” Her tears finally overran the dam and streamed down her cheeks.

I read the news after I came back from the trip to China. This was one of the most heartbreaking family tragedies I had heard of in Singapore. I was extremely saddened by the realization that human lives were so fragile, and could be shattered at the most unexpected moments.

According to the reports, the sequence of events on June 6, 2009, were as follows:

That evening, twenty-five year old Raja was meeting with some of his friends near his residence. They had some drinks. He had been unhappy lately as he lost his job about a month ago. During the gathering, his younger brother called and asked him to go somewhere else together, but Raja said he was tired and didn’t want to go.

Around 10:30pm, he was back home in his apartment on the ninth floor, but not for long. He told his mother that he was going out again. His mother was worried about him as he looked a little tipsy and asked him to stay at home. But he was in no mood to listen to her.

On his way out his father came to speak to him, saying he should listen to his mother and not go out at this hour. They got into a heated argument. His father said he should worry about finding a job rather than hanging out aimlessly. Raja was further upset by the remarks. He stepped out of the house and locked the front gate from the outside with a padlock.

He then walked to the edge of the corridor, said he was not a worthy son to his parents and jumped over the parapet in front of his family.

The family was locked inside and could do nothing to stop him. They witnessed the tragedy in horror, and immediately called their relatives and the police for help.

The police came and had to call the civil defense personnel to cut the lock to free the family, who came out to see Raja lying dead on the ground nine floors below.

The family collapsed in grief on the ground floor, accompanied by their relatives and the police. They were then led to a nearby bench to sit and calm down. After a while, the father left and before anyone became aware of his movements, he took the lift to the tenth floor. He jumped off the building crying “my son!” and landed on the ground next to his son’s body.

Both father and son were pronounced dead at the scene.

“My boy,” the woman wiped some tears and said, “I loved him. I loved him so much. Every time he couldn’t sleep at night he asked me, mama, come here. I came to sit by him, put my hand here, where his heart was beating. He would fall asleep right away.” She put her hand over her heart to demonstrate.

She slowly turned her head, and pointed to the cement ground along the side of the building. “That’s where my son was, and that’s where my husband was.”

I stared at the ground. Cold, hard cement, only a few steps away from my car. On the surface, any trace of blood from the two people she loved most had long been washed away. But I was certain, deep in the heart of the soil, their blood was still there, and would stay there forever.

“Sometimes I tell myself,” she said, her eyes staring blankly ahead, “at least they are together up there, taking care of each other.”

I looked at the woman. Her face was still covered with tears. Could anybody in this world possibly know what she had gone through? Only a short while ago, I was worried about her bags contaminating my taxi... I bit my lip and struggled to contain my own tears.

“I have to go on with my life. I have two other children to take care of,” she said as she opened her wallet. I pressed my hand on hers and said in a shivering voice, “I can’t take money from you.”

“You can. Business is business,” she insisted.

“No. I really can’t.” That was the only thing I could say.

“Please. Even if just a little bit,” she said as she took out some money from her wallet. “It will make me feel better.”

Her wallet was thin and empty. I could see there were only three or four $2 notes inside. She took out two of them and put them in my hand. She looked into my eyes and said, “You understand me?”

The $4 she gave me was not “just a little bit”. It was almost the full fare, but I couldn’t speak. I just nodded.

She got out, took the bags, and walked slowly towards the building, shifting her weight from side to side, passing by the spots where her son and husband landed a month and a half ago.

With her heavy steps…

A note of explanation: It has been a general rule that my stories do not contain information which would allow the identification of persons involved in the events described. This story is an exception as it was about a tragic event that had already been made public by the news media.

Sunday, February 14, 2010

The Economist : Welfare in Singapore The Stingy Nanny

The PAP pride itself to be an efficient, pragmatic and effective govt. None of this is true if we look at the way the PAP helps the needy in Singapore. When it comes to helping the poor, the PAP is ideological, inefficient and unnecessarily stingy. Making it difficult for people who really need help to find it and get it has long term negative consequences harmful to our society and worsens many problems that the PAP created with its policies. If you have not been reading this blog, you may think that what I've written above is too harsh but the article below by The Economist is a good summary of what I've discussed in many of my blog postings. PAP insistence that it shouldn't give help because the poor people are responsible for the own poverty is untrue. Making the process of seeking help "tiring and humiliating" is cruel and especially so if the people seeking help have fallen as a result of govt policies over the years.

Sometime in the 80s, when we were heading for a Swiss standard of living, it could be argued that comprehensive welfare and safety nets were unnecessary. Singaporeans working full time jobs were able to save and start a family, income inequality was a lot lower and job stability was relatively high. Over the years, workers' benefits have been slashed, income gap has ballooned and employers adoped a "hire-and-fire" attitude towards workers. The Singapore pursued pro-business policies such as allowing a large influx of foreign workers, raising GST to cut corporate taxes, no minimum wages for workers and an export oriented economic model that is highly vulnerable to volatilities of overseas demand. At the same time, the cost of living escalated causing the real wages of a large segment of the population to fall. If you find it tough owning a flat working as a professional, imagine what it is like for other workers in Singapore. Singapore has the highest income gap of all developed countries, and one of the highest cost of living. So is it any wonder if there are many have fallen through and need state help? These people are poor through no fault of their own - unless you want to blame them for being born less intelligent or less lucky and as one YPAP member put it, they should blame themselves for coming out of the wrong womb i.e. not having rich parents. The PAP mantra to solve all this is "retraining" and more retraining along with work harder, work faster - they have been saying this for the past few decades and they will keep insisting that this is the solution because it helps to preserve the status quo requiring no major policy change on their part. The PAP insists being poor is all your own fault. Because of the high cost of living, many Singaporeans even those who are not needy are unable to save so they are one major illness away from poverty or one job loss away from poverty. Many Singaporeans walk the economic tight rope as our GLCs report record profits which have been growing as a % of GDP - so what about keeping the cost of living down? What about truly affordable housing instead of the most expensive public housing in the world?

Today is Chinese New Year and I would like to wish all of you a "Happy Chinese New Year". I urge all of you to look beyond yourself and think of the hundreds of thousands of Singaporeans who will find this new year to be another year of struggle and uncertainty. While you celebrate, think of those who are unable to do so...hopefully the new year brings new thinking...new thinking that will lead to much needed change.

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Welfare in Singapore The stingy nanny [Link]
The city-state stays strict with the needy
Feb 13th 2010 SINGAPORE
From The Economist online FOND of having the last word, Singapore's government can nevertheless be flexible. Who would have thought it would be building casinos? But one policy that shows no sign of reversing is Singapore’s antipathy towards public welfare. The state’s attitude can be simply put: being poor here is your own fault. Citizens are obliged to save for the future, rely on their families and not expect any handouts from the government unless they hit rock bottom. The emphasis on family extends into old age: retired parents can sue children who fail to support them. In government circles “welfare” remains a dirty word, cousin to sloth and waste. Singapore may be a nanny state, but it is by no means an indulgent nanny.

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The aftershock of a deep recession, which pushed unemployment among citizens up to 4.1% in September—high for Singapore—has not altered the popular belief that the dole is bad for society. The casinos, which open on February 14th, have already helped reduce unemployment, which by December had fallen back to 3%, seasonally adjusted.
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The government does run a handful of schemes directed at some of the needy, from low-income students to the unassisted elderly. But these benefits are rigorously means-tested and granted only sparingly. The most destitute citizens’ families may apply for public assistance; only 3,000 currently qualify. Laid-off workers receive no automatic benefits. Instead they are sorted into “workfare” and training schemes.
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Applicants complain that the process of seeking help is made tiresome and humiliating. Indeed that could be the point, supposing it deters free-riders. Officials take a dim view of European-style welfare systems, which are said to beget laziness. The Ministry of Community Development, Youth and Sports (MCYS), which administers the various schemes, says theirs are designed as a “springboard” to self-reliance. Getting people back to work takes priority over relieving any temporary drop in income. In a fiscal stimulus unveiled a year ago in response to the financial crisis, S$5.1 billion ($3.6 billion) was allocated for employment measures, including grants to companies to retain staff. Those who remain out of work can join a government training scheme; by December, 169,000 unemployed workers had done so.

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Many Singaporeans are wedded to their jobs and look askance at idleness of any kind. The government is leery of generous handouts, fearing they might undercut the work ethic while burdening taxpayers. But the thinness of the safety net also reflects a widespread article of faith, recited and reinforced over the years. Even among the social workers who work in hard-hit communities there is surprisingly little frustration at the meagreness of the handouts on offer or at the lengthy application process. One explains that Singapore needs to weed out undeserving claimants and shakes his head at the potential cost of a comprehensive welfare service. Yet in his next breath he mentions a number of local families who have been forced to sleep rough since mortgage lenders foreclosed on their flats.
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Nobody doubts that wealthy Singapore could be more generous. In 2008 the World Bank rated it the third richest country in the world, in terms of GDP per head at purchasing-power parity. And the idea that its Big-Brotherly government might be outfoxed by conniving welfare queens seems odd. When a visiting news crew filmed an elderly woman scavenging in Chinatown and bemoaning her homelessness, the government promptly identified her as a miserly flat-owner who did not need to beg. Indeed, acute poverty is hard to spot in Singapore. Public housing is in good shape; no slums are allowed to fester. Soup kitchens do exist, but foreign labourers are often first in line.
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But Singapore still faces the challenge of rising inequality in a society that is also rapidly ageing. By 2030, says MCYS, one in five Singaporeans will be over 65 (UBS, whose largest shareholder is Singapore’s sovereign-wealth fund, has estimated the date at 2020). Incomes have stagnated or even fallen at the bottom of the spectrum, as the rich pull further ahead of the middle classes. Long-term unemployment among middle-aged professionals, who do not qualify for workfare, is on the rise, says Leong Sze Hian, a financial expert and blogger.

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Native resentment is also growing against the influx of migrant workers: 35% of the workforce of 3m is now foreign. It is often cheaper for companies to import semi-skilled and unskilled workers—there were 680,000 at last count—than to hire locals, who require pension contributions. Official reassurances that migrants create growth do not convince those competing for scarce jobs. Lee Kuan Yew,
Singapore’s founding father and still its "minister mentor" has maintained that ambitious migrants help to keep citizens on their toes. In an interview given to National Geographic last July he said that if native Singaporeans lag behind “hungry” foreigners because “the spurs are not stuck on [their] hinds”, that is not the state’s problem to solve.

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This nascent backlash may eventually soften the anti-welfare tone set by Mr Lee. The Economic Society of Singapore (ESS)—not exactly a radical cell—recently proposed to a government committee that it should build a more robust safety net, starting with unemployment insurance. This would promote social stability and help muster public support for Singapore’s open-door migration policies, it argues. Properly designed, such measures would not create disincentives to work and thrift. “While self-reliance is a good principle in general, it may be neither efficient nor just if taken to extremes,” noted the ESS.

Saturday, February 13, 2010

Dampening the volatility in our economy...

Here's an interesting set of slides by Prof. Choy Keen Meng on the volatility in our economy:





This talk at an event organised by the Economic Society of Singapore on 27 Oct 2009.

Here is an interest chart showing how much our domestic consumption has shrunk over the years and how exports became dominant in our pursuit of GDP growth.



It shows how much our domestic consumption fallen as we pursue growth based on the export-led model. We became dependent on external demand which is highly volatile. Export led growth will mean more of the same "cheaper, better, faster" type economy to compete with China which is a race to the bottom for our workers. Expanding domestic consumption can lead to higher wages for our workers, narrow the income gap and result in a less volatile economy.

Monday, February 08, 2010

Beware of Religious Chauvinism....

10 years ago, I went to Jerusalem with a group of friends many of whom were Christians . We were taken around by a local tour guide who had an encyclopedic knowledge of the place -he was also very charismatic, entertaining and articulate. We visited biblical places such as the room where the Last Supper was believed to be held, where Christ was cruxified - "99.9% certainty" of the location being right was what the guide told us - Mount of Olives and many places described in the Bible. The tour ended with a visit to Bethlehem which was located in a Palestinian administered area accessible only because tensions with Israelis had temporarily subsided. The birth of Christ in Bethlehem fulfil one of the prophesies in the Old Testament written hundreds of years before his birth. The guide told us that Jesus fulfiled a total of 60 old testament prophesies (wow!). At that point I could feel the faith of the Christians in the tour group renewed and strengthened. Confronted by this compelling evidence and perhaps I was a tad too sensitive, I felt the my Christian friends were looking at me and their eyes were saying.."...still don't believe huh....".

Feeling a bit of pressure and needing to digest all I've seen and heard for the day, I decided to sit next to the guide who was also the driver on the way back to the hotel. The rest of the tour group was sitting behind. I felt a lot more relax as the refreshing cool wind from the window relieved some of tension I was feeling....it was then when I realised that the guide who showed us all the evidence was actually Jewish and was not a believer. How can it be? I turned to the guide to ask him, "Since 60 Old Testament prophesies were fulfilled by Jesus and there is so much compelling evidence, why haven't you and other Jews converted to Christianity...?". The guide turned to me and whispered......


I'll tell you what he whispered to me later when I come back to complete this posting. I share this experience of mine, to tell you something about the importance of faith, what is faith and what the truth means to different people and why we should respect each others beliefs although we may disagree...and why we should not be so arrogant to think we possess the absolute truth.

This is what the guide whispered to me, "I didn't tell you about the prophesies that were not fulfilled...."[Link]( some of commenters cleverly figured it out before I posted this). See the problem with me is I ask too many questions preventing me from taking a leap of faith. Once you leap to the other side, you start to view everything in a different light and the truth become evident in ways you cannot imagine - there are explanations for the good and bad things that happen to you. The dream girl you met, fell in love with and married ...must have been preordained. Serious illness is a test of your faith and recovery brings a fuller and deeper appreciation of the value and sanctity of human life. Religious faith gives you the meaningful answers to questions...answers that you can never have and accept without faith. Sad to say people like me who are unable to make this leap of faith have to through life's trials and tribulations unassured that the outcomes are the result of divine will...these tribulations may leave us in dispair. Religious faith is therefore important and those with faith are indeed blessed.

As for the TRUTH, it depends on which religion you leap into. Religious truth unlike scientific truth exist for the purpose of transforming hearts. Religious truth is based on beliefs - faith, hope and love.....it is true because you want it to be true. Who does not want life after death? Who does not want evil to be punished and good to be rewarded? Who does not want to be forgiven for doing wrong? Different religions offer different answers to questions that science cannot answer meaningfully and satisfactorily. When it comes to religious truth, we have a choice what we want to believe. All major religions are true for their believers and trying shake another person's faith by ridiculing his religion and what he feels is true in his heart can only result in a climate of hate. Rony Tan did cross the line but he has also apologised to those he offended. All major religions teach their followers to be forgiving....and doing what is right is a testimony to your faith .... your ability to overcome the hatred in your heart, forgive those who have offended you and show generosity to those who have apologised will be a demonstration that your heart has been transformed by your religious beliefs.
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Pastor's comments on Buddhism/Taoism "inappropriate & unacceptable": MHA
Posted: 08 February 2010 2345 hrs

SINGAPORE: The Internal Security Department (ISD) has called up Pastor Rony Tan of Lighthouse Evangelism in connection with his comments and insinuations about Buddhism and Taoism at his church sessions.

These sessions were video-recorded and made available on Lighthouse Evangelism's website. Video clips of these sessions subsequently became available on YouTube and other websites.

The Ministry of Home Affairs said Pastor Tan's comments were highly inappropriate and unacceptable as they trivialised and insulted the beliefs of Buddhists and Taoists.

They can also give rise to tension and conflict between the Buddhist/Taoist and Christian communities.

ISD told Pastor Tan that in preaching or proselytising his faith, he must not run down other religions, and must be mindful of the sensitivities of other religions.

Pastor Tan has expressed his deepest apologies and remorse. He deeply regrets that he has been insensitive and offensive towards the Buddhist and Taoist faiths, and that his comments have saddened and hurt their followers.

He has promised that it will never happen again and has also affirmed that he will tell his members to respect other beliefs and build a harmonious Singapore.

- CNA/ir
http://www.channelnewsasia.com/stories/singaporelocalnews/view/1036211/1/.html


Sunday, February 07, 2010

Apathetic Generation

I am part of an apathetic generation
and I refuse to believe that
I can bring change to this nation
I realize this may be a shock but
“Democracy, Equality and Justice are important ideals.”
is a lie, and
“Money and material wealth will make us all happy.”
Singaporeans know that
cars, cash and condominiums
are more important than
the ideals in our pledge
I tell you this
Once upon a time
Singaporeans stood up for justice and each other
but this will not be true in my era
This is a divided unequal selfish society
Everyone tells me
20 yrs from now, true blue S'poreans will be a minority in our country

I do not believe that
I will live in a nation where there is a sense of ownership

In the future
defeat of our society's ideals and core values will be inevitable
No longer can it be said that

My fellow citizens and I care about this nation
It will be evident that
My generation is apathetic and materialistic
It is foolish to presume that
There is hope.


And all of this will come true unless we choose to reverse it .
Read the message, then read it again in reverse.

I got the idea to write the above from Tan Kin Lian's blog in which he posted this brilliant piece, The Lost Generation, by Jonathan Reed. I rewrote some of the words from the original to make it more relevant to Singapore:


Friday, February 05, 2010

Reform Party : Dismantle GLCs

Temasek Review reported that Reform Party has called for dismantling of the GLC structure[Link] . I have said many times in the blog that the links between govt and the vast network of GLCs has resulted in the interests of the PAP govt being diversified beyond that of maximising the benefits for ordinary citizens. The PAP recruits from GLCs and former PAP ministers are inserted into various positions in GLCs e.g. David Lim (remember him?) went to NOL[Link]. I strongly support the views of Reform Party on dismantling GLCs as they are very close to mine.

In my next post, I will write about the ESC again - the ESC has missed out on something very important i.e. strategies to cope with increased frequency and risk of economic crisis. It is important to put in stabilisers in our economy to tackle this recurring risk.

Why the stock market will rebound and why you should try to get out anyway....

FURTHER UPDATE 6:20am 10 Feb 2010 - Markets have rebounded sharply since I posted this last Friday. Based on my models, they market will rally until May 2010 before it sees another correction. After that we will see one last peak in Aug 2010 before a more sinister downturn - you should get out in May or Aug...really! If you look through the recent "noise", the economic numbers and corporate earnings have been very good. In previous posts, I said that the closest "matching" and similar rally to this one is the 2003-2004 rally. For the next few months, I believe blue chips will show much greater strength than poorer quality stocks compared with the runup of past few months. In the next few days, you will see bad news suddenly moving to the background (surprise..surprise) and good news being played up ...investors will return with enthusiasm as if the last 3 weeks never happen!

UPDATE: 4:51pm 5 Feb 2010 - Extremely scary headlines on Bloomberg's home page : •Stocks Plunge, Euro Falls, Bond Risk Soars on Jobless Claims, Country Debt
Trichet Struggles to Convince Markets of Europe's Solidity Amid Greek Woes . Suggesting great instability in the markets. Will the market exhaust its downside selloff as I suggested or are the so-called fundamentals so precarious we are on the precipice of a new crisis? Scary times isn't it?

Volatility has returned to the stock market. Yesterday night the DOW crumbled 268pts sending shivers down the spine of the steadiest investors. Last week it had 2 consecutive days when it fell by 200pts. I like to listen to "after the fact" explanations of all these falls. 2 weeks ago the falls were largely blamed on China for its tightening on bank lending. Last week's fall was blamed on Obama's newly proposed banking regulation also known as Volcker rules. The sight of Volcker standing by the side of Obama spooked markets and triggered a 2-day 400+ point selloff of the DOW. ...at least that was what CNBC said. The more sinister conspiracy theory version of this is Goldman Sachs wanted to show the US govt who's boss and sank the market with its program trading softwares - Volcker was from Chase a rival financial firm. Hmm...don't worry I'm still thinking logically, I don't believe in that piece of conspiracy theory, just wrote about it to show how creative people can get when it comes to explanations. Actually, I believe all these after the fact explanations have nothing to do with most of the market movements -while the market moved down, there was plenty of good news from the earnings front and economy that had no effect on the market. When the market moves down, journalists will pick the most plausible explanations to write or talk about.


As I type this, the STI has sunk 60pts and the HSI has sunk 650pts (11pm, 5 Feb 2010).

I want you to look at this chart of the HSI:

What it shows is the HSI having exactly one mini-rally and a selloff every month. In fact the size of these moves are not small rought 8-10%. The recent selloff being the biggest one. The 2nd observation I made over the past months the start of big multi-day falls on the DOW comes AFTER a fall on the HSI - usually without any clear reason. The current selloff came after a 400(?) point fall of the HSI after a positive trading session on the DOW - this happened a 2 weeks ago just after the DOW peaked. All the falls are accompanied by falls in commodities including gold which is suppose to be a crisis safe haven. The point I'm getting at is these 2-3 week falls of the market are caused by liquidity flows and highly leverage positions of some market players - they are like a mini house of cards that tumble when the wind blows slightly in an unfavorable direction....this explains the sharp falls in the HSI that occurs every month. It has little to do with the explanations we hear about on TV and read about in the papers - these events may serve as triggers for the selling but does not explain the magnitude. For example, the situation in Greece was known months ago....why did the market react so adversely?

After doing some other analysis much of which too detailed to post here - I believe the market will rebound in the short/near term (whatever logical explanation will be told to you by CNBC after it happens). You should really think about getting out regardless of whether this rebound materialise. The high level of debt that has build up by govts around the world may prove problematic in the longer run and leave them with little bullets when things go wrong. As for my own portforlio, much of my own exposure has been reduced in the past 2 weeks due to the trailing stops I put in. So while I believe the market may rebound in the coming days or a few short weeks, the medium to longer term outlook may actually be bleak.