Tuesday, June 29, 2010
The article "Paul Krugman Throws In Towel , Says We're Headed for Another Depression" (see below) talks about Paul Krugman coming to the conclusion that the global economy is headed for a depression because govts are making the mistake of cutting off the stimulus too early thinking the recovery is in the bag. This same mistake was made in 1937 when govts cut spending after a huge rebound from the Great Depression to plunge the economy back into recession.
I think we are headed for tough times but I don't think Krugman is right about the part that govts are cutting stimulus because they think the recovery is well on the way. I think the Europeans are implementing austerity because they see disaster coming if they don't start cutting spending. If you look at the growth generated in the US and Europe by the stimulus packages, it has been quite dismal. The Europeans probably realised that they can't keep propping up the economy using stimulus and the economy will falter anyway given the results we are seeing. If you keep fighting off the inevitable, you will be worse off at the end of the day when the inevitable arrives. The bond vigilantes who launched an attack of the Euro and bonds of weak Europeans in May 2010 sent out a strong signal that there will be more pain unless Europe does something about its deficits. Parts of Europe i.e. Spain & Greece are already experiencing depression like conditions with unemployment rising to 20%.
The economic problems we are seeing have been in the making for the last 2-3 decades. The level of debt in the global economy is enormous and we cannot have sustainable and stable growth unless this debt is reduced. Pain may be inevitable and the Europeans leaders have thrown in the towel because they realised this....it is the American govt that is in denial.... still thinking they can spend their way out of this mess.
While Paul Krugman talks about depression, 68 units from a condo project called Waterfront Gold, a 99 leasehold condo tucked somewhere in Bedok Reservior were sold at a price of 1075 per sq feet[Link]. The developer has cleverly divided the project into 3 phases - Waterfront Key, Waterfront Waves and Waterfront Gold bumping up prices by 25% for each phase. The penthouse in Waterfront Gold with an area of 2000 sq ft went for more than $2+M....but there is no property bubble in Singapore says our wise MM Lee. The problem with bubbles is they have a way of bursting that catches people "off guard". In a few months, we may have to hear our esteemed Minister Mah talked about how unforeseeable and unpreventable this whole situation was. Singaporeans spend and invest a large part of their savings and income on property very often taking up huge debts to finance their purchase - this is perhaps the achilles heel of our economy.....
Paul Krugman Throws In Towel, Says We're Headed For Another Depression
For the last several months, Princeton professor Paul Krugman has become increasingly agitated about what he feels is a disastrous mistake in the making -- a sudden global obsession with "austerity" that will lead to spending cuts in many nations in Europe and, possibly, the United States.
Krugman believes that this is exactly the same mistake we made in 1937, when the country was beginning to emerge from the Great Depression. A sudden focus on austerity in 1937, it is widely believed, halted four years of strong growth and plunged the country back into recession, sending the unemployment rate soaring again.
In Krugman's view, the world should keep spending now, to offset the pain of the recession and high unemployment--and then start cutting back as soon as the economy is robustly healthy again.
Those concerned about the world's massive debt and deficits, however, have seized control of the public debate, and are scaring the world's governments into cutting back.
Which fate is worse? It depends on your time frame.
Cutting back on spending now would almost certainly make the economy worse, at least for the short run. Not cutting back on spending later, meanwhile (and Congress has shown no ability to curtail spending), will almost certainly keep us on a road to hell in a handbasket.
The White House's own budget projections show the deficit improving as a percent of GDP to about -4% by 2013. After that, however, even the White House doesn't think things will get much better. After a few years of bumping along at about -4%, the deficit will begin to soar at the end of the decade. And thanks to the ballooning costs of Medicare, Medicaid, and Social Security--along with inflating interest payments from all the debt we're accumulating--the White House expects the deficit to soar to a staggering -62% of GDP by 2085.
What Krugman and his foes agree on is that that's no way to run a country. And it's time we finally faced up to that.
In the meantime, we'll continue to fight about what to do in the near-term. And Krugman thinks he has lost that war and we're headed for another Depression.
Sunday, June 27, 2010
'Even if we cap our excess, people in Hong Kong, Indonesia, will say,
compared to what I have to pay, Singapore is cheap, let's buy it,' he added.
'And apart from landed properties, they can buy into any condos.'
Mr Lee, who was speaking at a dinner hosted by the Association of Banks in
Singapore, said that the Government is convinced that there is real underlying
demand for residential property.
'So it's probably not a bubble yet,' he
- Ariticle "Probably no property bubble here yet: MM Lee" [Link]
Gee, I thought I heard that one of those Sentosa Cove bungalows was sold for $36M[Link] recently so we have to wait for those bungalows to go for $72M a piece before someone in govt admits there is a bubble? Also, MM Lee said that prices are rising because foreigners from places like Hong Kong find our property cheap so we shouldn't try "cap our excess" and keep prices under control - yes MM Lee, let them spiral up! Hong Kong and China had a big surge in property price and the govt there implemented drastic curbs to slow the bubble[Link] - yes, the govt there recognised there was a bubble and implemented measures to put things under control. Yet we allow the excess demand from these countries to spill over into Singapore causing prices to surge, Singaporeans who need housing will end up paying higher prices.
By saying that prices are rising due to foreign demand, MM Lee contradicted his own minister [Link]. If what MM Lee said is true, there are commonly used and effective measures to curb such imported demand for property e.g. in Australia foreign owned property can only be sold to Australians.
We have to guard against bubbles because the damaging effects of one can be serious and long lasting. But to be able to avoid trouble the govt has to be on its toes and detect it before it is too late - MM Lee sees no bubble so his ministers will now take the cue and do nothing as prices rise.
Robert Shiller is a rigorous and thorough academic who is careful about making assertions ...but he has turned somewhat pessimistic about the US housing market. Listen to what he said recently about possible long lasting effects the bursting twin bubble - stock market + housing - in the US : [Link]. Other countries have handed us lessons we cannot afford not to learn...and if the govt doesn't learn, it will again be caught off guard .....hmm, that is something that happens quite often these days.
Saturday, June 26, 2010
http://www.channelnewsasia.com/stories/singaporelocalnews/view/1027598/1/.htmlBy Joanne Chan, Channel NewsAsia Posted: 29 December 2009 2315 hrs
He said: "Nobody, no matter how prescient, no matter how clever, would have been able to predict that this is what is going to happen this year. All of us were caught off-guard... I did not expect the prices to go up.
PUB chief executive says water agency caught off guard in Orchard Rd flood By Claire Huang Posted: 18 June 2010 1747
SINGAPORE : The Chief Executive of Singapore's national water agency, PUB, has acknowledged that his agency was caught off guard by the Orchard Road flood on Wednesday.
I thought the housing issues were quite straight forward the population expanded quickly and the supply of new flats declined as HDB tried out BTO building to meet orders. Yet Minister Mah had great difficulty figuring out that increase demand and falling supply can cause a rise in prices. As for these floods, Al Gore's blockbuster documentary in 2006, An Inconvenient Truth, did mention Singapore and pointed to a whole host of climate changes that will result in global warming. Also, our drainage system was designed and built before the La Nina phenomena[Link] - other govts have taken steps to prepare their farmers for higher rain fall this year.
Looks like we are not paying our leaders enough not to be "caught off guard"....they seem to have problems analysing basic widely known data even after the warning signs appear.
Friday, June 25, 2010
Always be wary of 'convenient explanations'. I do plenty of project reviews for various systems and very often when something goes wrong, the people responsible have a tendency to go for the explanation that results in the least work and blame for themselves. For example, if something goes wrong in a software, the programmers will prefer to say that the users misused the software by giving it bad data or something like that rather that an explanation that will result in the software getting reworked. It is more convenient to go for these explanations than spend time and money to find out what is actually wrong and fix it. However, when the problem recurs, the people affected are going to get angry and they will get smart enough not to just accept another convenient explanation....
It is not really clear what is causing all these floods but we have been getting explanations that result in the least amount work and effort on the part of the authorities. The Bukit Timah flood was blamed on a once in 50 years event ....so not much needs to be done. The Orchard Road flood was blamed on debris in a drain so just some monitoring and regular clearing will solve it. Hmm...if that is the case why did Orchard Rd flood again today? We may need to restructure our old system of canals as the rain fall pattern might have changed to cause more intense rain fall due to climate change. For those whose goods and property have been damaged by recurring floods, how many convenient explanations do they have to listen before something concrete is done?
Over 60% of June rain fell during morning downpour, causing road chaos
SINGAPORE: Heavy and intense rain fell in many parts of Singapore early Friday morning causing road chaos with fallen trees and floods. The PUB said 100 mm of rain fell within an hour, between 8 and 9.30am. That's the same amount of rainfall on June 16 which led to massive floods in Orchard Road. That amount is more than 60 per cent of the average rainfall for the entire month of June. PUB says the heavy rain caused localised flash floods in a number areas and the waters subsided within 30 minutes.
During the heavy downpour Friday morning MediaCorp received several calls about floods in various parts of Singapore. Among the areas affected were Upper Thomson Road near Sin Ming Road, Jalan Boon Lay, and Bukit Timah Road after the Balmoral Road junction in the direction of Corporation Road. Several roads also had traffic diverted due to fallen trees. An uprooted tree fell across the entire northbound carriageway after the junction with Ang Mo Kio Ave 1 in Friday’s morning's heavy downpour making the expressway impassable to traffic. The incident caused a massive jam which tailed back several kilometres. A van was also trapped by the fallen tree and the SCDF said two people in the van were injured and were sent to Tan Tock Seng Hospital. Traffic Police were also on hand to divert traffic away from the CTE towards SLE in between the Ang Mo Kio Ave 1 and Ang Mo Kio Ave 3 exit due to the fallen tree. On Orchard Road, a fallen tree near Orchard Central blocked two lanes of traffic. SCDF personnel were also called in to help evacuate children from a childcare centre at Telok Kurau Lorong G, affected by the floods.
They also had to pump water out of the childcare centre. Traffic police officers were also kept busy regulating traffic and directing motorists at jammed up roads. At the junction of Balmoral Road and Bukit Timah Road, traffic had to be diverted away from due to flood caused by heavy rains.
Thursday, June 24, 2010
Suppose you have a way of knowing these numbers ahead of time, before other traders and market participants. Suppose you know ahead of time with good probability what these number will be relative to expectations before they are released, you will have an advantage if you are a shorter term investor/trader - the Warren Buffett Way is not the only way to make money. Enter the Ceridian-UCLA Pulse of Commerce Index.
Researchers at UCLA found a way to measure the overall economic activity in realtime by tracking the volume and location of fuel purchased. This index closely monitors the over the road movement of raw materials, goods-in-process and finished goods to U.S. factories, retailers and consumers. The researchers back tested their numbers and found that is highly correlated with the govt numbers released later in the month[Link to White paper]. Of course, a widely known useful index published on the Internet would have been factored and discounted by the stock market....however, UCLA only started publishing the Ceridian Index in Feb 2010 so it is still not widely used and the vast majority of investors still don't know how well it correlates with other economic numbers.
The coming weeks will be very interesting for several reasons. After the stock market sold down in May 2010, there is wide spread belief on Wall Street is that the US economy has slowed due to the "European crisis". This belief has also been reinforced by the disastrous disappointing jobs report release in early June [Link]. The Ceridian Index shows a completely different picture - the index had a massive surge of 3.1% in May, the one of the biggest, if not the biggest, rise in this recovery. The US govt will be releasing more numbers in the coming days/weeks for the performance of the US economy in May 2010 and it will be interesting to see if the Ceridian Index will be proven correct over the more pessimistic views of most analysts. The stronger than expected US economy and ample liquidity is the main reason for my projection that the stock market will rally until some time in end Jul.
The mainstream financial media is starting to report on the Ceridian Index but it still calls it a "little noticed indicator" [Read : Truckers Say Market's Wrong, Economy Grows]. Over time as more people watch the Ceridian Index, its utility for traders will decline but I think we still have some time to exploit this.
For the longer term, I believe the prognosis for global economy is poor. We are coming to the tailend of a stimulus driven recovery and many govts around the world have began to realise that growth cannot be sustained without addressing the high level of debt in the system. Many have began to implement austerity (painful?) measures and the global economy may have to go through some adjustment before it can get on a more sustainable path of recovery. The UK govt emergency budget based UK growth on several assumptions UK's ability to grow its exports and demand from surplus nations to replace the growth generated by govt spending and financial sector growth. Its austerity measures will start to bite faster than the global economy can change to provide support for UK growth.
Wednesday, June 23, 2010
Here is something I picked up listening to his speech on the civil service pay scale:
"And we have asked Will Hutton to draw up plans for fairer pay across the public sector, without increasing the overall pay bill, so that those at the top of organisations are paid no more than 20 times the salaries of those at the bottom.
The culture of excessive pay at the very top of the public sector simply has to end"
- George Osborne, Chancellor Exchequer, UK [Link]
UK has a income disparity that has been increasing in the past 2 decades. The current leaders see this as a serious problem that has to be addressed and they start by setting the example with those in public service.
It is a myth that if you keep increasing the pay of those in high office, you will get better and better people. What happens is a culture of entitlement takes root and the excessive pay just breeds greed and complacency. You mix this with the elitist beliefs and the selection system we have in Singapore where ordinary citizens are told that those who made it to the top are rare and extraordinary talents we end up with a lot less accountability. Be it downtown floods, massive losses in our sovereign wealth fund, escape of dangerous terrorists etc you see little accountability from the people on top who are paid the highest salaries in the world.
Tuesday, June 22, 2010
"Notwithstanding the provisions of any other written law, it is an offence under the Act to commit any act of vandalism, attempt to do any such act, or cause any such act to be done. Upon conviction, the penalty is a fine not exceeding S$2,000 or imprisonment not exceeding three years, and also corporal punishment of not less than three strokes and not more than eight strokes of the cane." - Singapore Vandalism Act [Wikipedia Link]
If he is a Singaporean, he will probably get 2-3 years jail and caning will be a certainty. Breaking into a restricted compound is considered a very serious crime in Singapore. I support the idea of applying the same laws and justice to everyone on this island. However, giving Friker the same sentence as a Singaporean will definitely result in hue and outrage in his home country of Switzerland ....they will be quite stunned if Fricker is given a jail sentence and caning for graffiti.
Many Singaporeans and netizens are watching this case closely to see what kind of sentence Fricker will get. Given the Michael Fay case [Link]which put the spotlight on the punishment for certain crimes in Singapore, they will have to be prepared for some attention from the international media if Fricker is given a sentence that a Singaporean would be expected to receive for the same crime.
If our laws and punishment for breaking them are just and well thought out, the govt should be confident it can get the rest of the world to see things our way. They will have difficulty only if our system imposes unnecessarily brutal punishment that goes against the universal sense of justice .....
Monday, June 21, 2010
A few weeks ago, I went to the market to buy some char siew but the stall I go to regularly was closed. I asked the stall keeper at the adjacent stall if he knew when the char siew seller would be back. He said NEVER. ...the meat seller had collapsed and died at few days ago at home of a heart attack. Heart attacks are not so unfamiliar to me since my family (father's side) is prone to it, however, that meat seller was younger and healthier looking than me and that was a wake up call.
Last Saturday I had a very bad sore throat and went to see the neighborhood doctor. Mindful of what happened to the meatseller and Minister Khaw, I enquired about doing a checkup at the clinic. The doctor told me I can do an under $100 one with the usual cholesterol and various tests. Gee, I remembered that Minister Khaw had the heart attack when his blood pressure and cholesterol levels were normal so I asked the doctor if I can have the calcium test ..."same one as minister Khaw". I've learned Minister Khaw's lesson and will not be 'in denial' and will not be 'stupid'. The doctor looked at me and said he had never recommended the calcium test to anyone because it costs more than $1000 (anyone knows better please correct my doctor on this). Yes, the cost picking up the crucial life saving warnings is not cheap in Singapore....heck it is hard not to be stupid. I'll do the under $100 tests soon but I'm still thinking about the calcium test. The doctor located at the HDB heartlands doesn't recommend the calcium test to anyone because the cost is just too high for ordinary folks. In fact, many lower income folks probably don't even have annual checkups and their illnesses (diabetes, kidney disease, heart disease etc) are only discovered when it is too late. The PAP style of medical care is to pass all the cost of preventive care to ordinary citizens. Many cannot afford such tests because of the rising cost of living and the outcome can be devastating for some of the poor folks.
Minister Khaw Boon Wan took good care of himself - exercising regularly and, I suppose, eating healthy food - yet he was struck by a heart attack. People can do what is within their means to stay healthy but illness can never be eliminated. So for the thousands of poorer Singaporeans who cannot afford preventive care such as annual checkups, they are asked to shoulder a responsibility that they cannot afford to shoulder and ultimately the consequences and eventual cost to our society will be even larger when the person is struck by debilitating illnesses and needs even more medical care - the effects of many diseases can be mitigated through early detection and a sensible approach to healthcare. In 2001, the then Health Minister Lim Hng Kiang was asked to allow the use of Medisave funds (which is our own money in the first place) for screening procedures, in particular, screening for breast cancer. His final say in parliament on that matter was "Save on one hairdo and use the money for breast screening". ...and he was known as "hairdo Lim" from then on. We have a govt that has billions in reserves and pays itself millions...it also spends billions on defence. However, spending money to save the lives of Singaporeans who cannot afford preventive care such as breast cancer screening and various from of preventive care is not considered a top priority for this govt. It took almost 10 years and a new minister to consider allowing medisave for mammograms[Link] but so much more needs to be done and it cannot get done if the govts interest is to keep the healthcare expenditure at single digit (% wise) of GDP by shifting as much of the healthcare burden to individuals ....and all this to keep taxes of our millionaires and billionaire low while we have the highest income disparity in the developed world.
Friday, June 18, 2010
Recently, the PAP govt came up with a set of criteria to measure town council performance and released the Town Council Report. The report showed that estate in by opposition members ward fared poorly based on the criteria. One of the indicators is how well the town council go after arrears[Link]. One PAP MP explained how they did so well in this area:
"Even after a person has passed away, the liability is passed on to the next-of-kin. It is possible to collect these sums" -MP Zainudin Nordin, who chairs the Bishan-Toa Payoh Town Council
For your information, they do the same for hospital bills....you liability does not disappear with your death and the financial burden is passed to your family members. We are supposed to be impressed?
MP Low argued that the PAP constituencies are prime beneficiaries of various upgrading programmes which gives priority to PAP constitencies. The PAP govt has refused to disclose how much tax payers' money has been spent on this form of pork barrel politics.
Lets get this very clear - your PAP MP is not the person running your estate. Most PAP MPs have full time jobs and their MP role is only a part time job. While he chairs the town council, the actual running of the estate is done by professionals. The PAP town council are beneficiaries of various upgrading schemes which helps to reduce the maintenance cost. At the end of the day, how well the estate is run has little to do with your MPs performance.
The Town Council Management Report which tracks a narrow set of measures that puts the opposition constituencies is a completely meaningless exercise and a waste of tax payers money that serve only to score political points for the ruling PAP party.
Singaporeans should be more interested in the performance of the PAP govt and I suggest a few KPIs for the measurement of this:
- GINI Index - how high is the income disparity in Singapore compared with the rest of the developed world.
- Cost of Public Housing - What can be more important than housing? Surely, providing affordable high quality housing is important ...I don't think anyone will disagree.
- Cost of utilities - What does it cost to light your home?
- Cost of govt - Is the govt costing too much? Surely, performance has to be measured relative to cost.
- Cost of transport - something the affects the live of all citizens.
- Quality of life - stress level of citizens, ability to live of full life i.e. raise a family etc.
The above are KPIs that matter to Singaporeans.....and it is important we know them to make an informed decision when the next elections comes...
Opposition MP urges MND to reveal town council benefits from upgrading programmes [Link]
By S Ramesh Posted: 17 June 2010 1913 hrs
Photos 1 of 1
Opposition MP Low Thia Khiang
SINGAPORE : Opposition MP for Hougang, Low Thia Khiang, has called on the Ministry of National Development to let the public know how much each town council has benefited from various upgrading programmes from the time they were started.
These are the Interim Upgrading Programme (IUP), Main Upgrading Programme (MUP) and Community Improvement Projects Committee (CIPC) funds.
In his latest salvo on the Town Council Management Report released recently, Mr Low said in a statement on Thursday that he had asked in Parliament, and again on June 14, for the information on the amount of funding to be made public.
But he said he was disappointed that the ministry had kept silent on this.
Mr Low was replying to several points made by Senior Minister of State for National Development, Grace Fu, in her statement released on Wednesday.
Ms Fu had said that Mr Low was using the town council report to pursue his political objectives.
The opposition MP now argues that the PAP government has spent huge sums of money over the years to upgrade HDB flats in PAP constituencies. He said this has benefited the PAP town councils immensely.
As a result, he said these town councils could have saved substantial sums of expenditure in cyclical works and routine maintenance. And the savings, he argued, would have contributed to the operating surplus and higher sinking funds over the years.
So Mr Low felt that the public should know how much additional funding is given to the town councils of the PAP wards - directly or indirectly - through the upgrading programmes.
He said Singaporeans can then judge for themselves whether this could affect the outcome of the town management and financial position of the town council.
Thursday, June 17, 2010
The drains in Orchard Road is designed based on the assumption that rainfall will not exceed 100mm per hour. According to a statement by PUB, almost a 100mm of rain fell between 9 to 11am yesterday[Link].
The last major flood occurred on Nov 2009 in Bukit Timah was supposed to be a "once in 50 years" event according to Minister Yaacob[Link].
With the changes in global climate, heavy rainfall is not so infrequent anymore. Perhaps the assumptions made when we build our drains 20-30 years ago no longer holds and the risk to life and property from flash floods in a lot higher today. So is the govt going to do something or continue saying that these floods are "once in 50 years events" when they occur every 6-12 months in today's changed climate.
Date: 22 January 1999
Source: The New Paper
Why Orchard Road will never flood…
By Fong Foong Mei
Well, almost never.
For a flood to hit anywhere in Singapore, it takes a combination of high tides and about 100mm of rainfall within an hour.
And Orchard Road is protected by its mighty rain drain - the Stamford Canal.
Thanks to it, shoppers haven't had to slosh through waist-deep waters since 1960s.
But what makes a good drain?
According to a Ministry of Environment (ENV) spokesman, it's the flow capacity of a drain and not its storage capacity.
In other words, it isn't the size of the boat that matters, but the motion of the ocean.
And Orchard Road's supersucker had plenty of that.
It can empty an Olympic-sized pool before your cup of latte has time to cool.
It's very handy around this time, with La Nina is expected to bring about more wet days in the next two months.
La Nina is the weather phenomenon responsible for the heavier rains and cooler temperatures around the region.
Already, it has increased rainfall by 25 to 30 percent this year, noted a Meteorological Service spokesman.
Singapore's worst ever flood happened in 1978 when 512 mm fell in 24 hours.
Seven people died in that flood.
To prevent such disasters from recurring, the Government has spent some $1.1 billion since 1984 on about 800 km of drains all over Singapore.
How can you do your bit to avoid doing your shopping in sampans?
Simple. Just don't chuck your rubbish in the drains. Let the rain drains do their work, and go with the flow.
Sunday, June 13, 2010
If you want to watch the World Cup for free, it is just 2 clicks away:
[Link to World Cup on Internet 1]
[Link to World Cup on Internet 2]
I've been eating too much good European food the past week. I realised a 50 Euros meal doesn't make me any happier than a $8 hawker center meal. When I got back I was craving for hawker center food!!! After a few rounds of Goulash soup, I was quite sure it was inferior to the $2.50 kambing soup (mutton soup) we have at the hawker center. I went to my favorite kambing soup stall in Bedok to satisfy my craving. The stall owner told me he stopped selling kambing soup last week when the price of mutton escalated and he would have to reduce the portion and end up with unhappy customers or increase the price and also end up with unhappy customers. Faced with the dilemma, he decided to stop selling kambing soup because he couldn't stand the thought of making his customers unhappy. I told him I was sad because I was looking forward to the kambing soup even $3.50 is miles better than inferior European Goulash that costs 10 Euros. Still hungry, I walked across to the NTUC Foodfare for a Nonya dumpling. They wanted to charged me $2.50 for the dumpling. I was quite sure I paid only $2 two weeks ago. I asked the cashier if the price was increased. She told me it was increased last week. I asked her why the price was increased - she told me in an impatient manner she didn't know and asked me to pay up or go somewhere else.....I decided to go somewhere else to eat something else rather than pay for $2.50 Nonya dumplings.
Very often price of goods and services increase in Singapore for no good reason except the sellers wanting to increase their profit margins. They can do it if they have monopolistic pricing power. That happens as more smaller enterprises are taken over by chains and corporations. Imagine one day when all food courts are operated and control by a handful of corporations such as Food Empire & Kopitiam and the hawkers are just hired hands rather than sole proprietors. We have seen it happen to our wet markets and mom & pop stalls replaced by stalls run by cheap labor imported from China and prices raised once the competition disappears.
If you don't like the World Cup subscription packages in Singapore which is the most expensive in the world, don't pay for it and remember it is just a symptom of the growing power of big business that are starting to dominate our economy. I know some of you will say that it is FIFA's fault for wanting such a high price and FIFA is the ultimate monopoly but our telcos must be very confident that they can pass on the exorbitant costs to consumers and as consumers we have to send a strong signal that this assumption is not true....otherwise SingTel will again bid aggressively for the EPL thinking Singapore consumers can't say no.
Saturday, June 12, 2010
There was a strike in China's Honda plant for higher wages a few days ago[Link]. The strike ended when Honda agreed to raise wages by 20-30%[Link] for each worker. The average pay for each worker before the hike was 1200 yuan($240) per month. Following the hike, workers will get closer to $300 a month. Yes, $300 a month to build top quality cars exported around the world. The US auto worker in the 50s had a middleclass lifestyle owning a home, supported a single income family, drove to work and had a pension. Today, a worker in a Chinese car factory lives in a bunk full of double decker beds and earns enough to ...stay alive. The stark contrast represents how the world has transformed in the past 40 years and understanding this is important as we look for changes ahead in the coming years.
The wage component for each car has fallen tremendously from the time cars were made mostly in US later to Japan when it became the biggest producer of cars and now to China. Singapore used to be able to win investments by just being cheaper than Japan, Europe and USA. That was in the 80s when investment from these countries poured into Singapore. They paid good wages and brought along with them developed countries worker benefits - these benefits were great even though they trimmed them down from what they gave out back home. Early 70s, BP (not doing too well these days) actually gave pension benefits to Singapore workers. All these started changing in the past 2 decades when China & India came into the picture 2 decades ago. For low tech low skilled jobs such as making textile, TVs, fans and China offered something like 70-80% in cost savings in the 90s and these industries quickly moved there. That wasn't too problematic for Singapore because we kept the higher tech stuff like hard-disk, semi-conductors etc. The Malaysians benefitted from China's demand for commodities and that compensated for the loss of manufacturing jobs. Right up to the 90s, Apple kept a manufacturing plant for its iMAC in Singapore. Today, its products are made by Foxconn which recently has been tarnished a spate of suicides[Link]....no question where you would rather be a 90s worker assembling iMAC in Singapore or a Foxconn worker in Shenzhen buiding the latest iPhone.
Realistically when it comes to manufacturing, we cannot keep the lower end stuff anymore because they don't create jobs that allow you to make enough to live in Singapore. There are still reasons for multinationals to keep their facilities in Singapore - some want to diversify their production to keep down the risk, some require advanced infrastructure and supporting industries that still don't exist in China, some industries have such high margins and high standards such as pharmaceuticals, they rather not risk moving to China. However, there are many industries at the margin that will move or stay due to level of wages. In Singapore, the strategy was to bring in workers from China willing to keep wages down, the govt argues that we will lose these industries if we don't import foreign labor to meet the demand.
"Top task for PM - to save and create jobs. There is one thing on Prime Minister Goh Chok Tong's mind these days : jobs, jobs, jobs." - Straits Times, Oct 26, 2001
Very often we are told the importance of jobs and job creation. Just look at the unemployment rate in developed countries - 10% for USA, 20% for Spain and so on. However, just focussing on jobs is only half the picture[Link]. The fact is the PAP govt is so good at creating jobs we need to import hundreds of thousands of foreign workers to fill them so why is this constant fear about not having enough jobs in Singapore? The real problem in Singapore is wages vs cost of living. We traded off better wages for jobs. When Obama creates a job, he has to create one that pays more than the minimum wage and gives a number of benefits such as healthcare so a job in USA is not the same as a job in Singapore. The problem with trading off better wages is you end up with a big income gap and people who work full time and can't make ends meet. The govt tried to fix this by implementing Workfare which is a completely inadequate scheme:
Giving low wage workers $50-80 a month is probably considered highly generous by the PAP govt and one has to applaud them for overcoming their ideological constraints to give out this sum of money. However, how far does it go help them? You notice that there are limits to the amount given as they don't subsidise you to a minimum wage that is considered sufficient to live in Singapore....so if you make $800 a month you will get to $883 a month since the maximum you can get is $1000 per year under the Workfare scheme. The low wage worker cannot survive properly compared with the past due to the emergence of cheap labor from China, various govt policies and changes external to him. In every society, we have people who are not cut out to do higher paying jobs ...half our population is below median intelligence by definition!..and there will always be a bottom 20%. I'll come to what can be done a little later.
Foxconn and Honda workers very quickly received 30% increase in wages once labor problems surfaced. Really it shows how much wages have been repressed and increasing it hardly causes a dent to the profits of companies. Today company profits as a share of GDP is at a record I don't think Apple is even 1% less profitable if they double the salaries of workers in Foxconn. The Foxconn & Honda troubles are just signs of larger changes that will be coming. Foxconn workers who make the iPhone cannot afford the iPhone...who buys them? People in developed countries with higher income.....demand comes from places where jobs are lost to China. Not only that if you plot the growth of productivity vs wages, you will see a big divergence in the past 20 years...more goods are produced today relative to the wage growth i.e. demand for goods come from wages but since wages lag the amount of goods produced where did the additional demand come from? The answer is debt. Debt supplemented wages to provide the additional demand - sovereign debt, consumer and mortgage debt ballooned in the last 20 years.
Are we seeing the end game of the strategy for the last few decades of economic growth? In China we are see rising dissatisfaction and social strife - Foxconn and Honda being their higher profile cases. Many people still believe the Chinese govt (communists) have full control of the economy and can steer the economy like they can a ship. Remember Vietnam two years ago? They had a small initial problem with a hot housing market, then inflation, then widespread labor problems and an economy that fell apart ahead of the rest of the world. The Vietnamese also had central control of the economy ...communists who modelled themselves after the Chinese. In Europe we see so many cracks at the same time, you don't know what to worry about. Many say that Greece is an exception because they were fleeced by rightwing leaders who cooked the books and run the country finances to the ground. If you look at Spain, there was no fraud, the leaders just ran a above average deficit for too many years building up too much sovereign debt and coupled with the bursting of the housing bubble resulted in an economy with 20% unemployment....that is roughly the unemployment level during the Great Depression of the 1930s. But high sovereign debt and housing bubbles were common place in developed economies during the last economic boom..you see Spain-like countries everywhere in the world and that is really scary. The Europeans are now trying to rein in their debt by implementing austerity measures and this will pose a big problem for the current economic recovery - the Europeans probably saw some light realising you can't keep propping up this economy with more debt and forestalling the inevitable. In recent elections, we see an increasing number of incumbent govts losing power - Japan, Greece, Britain...just to name a few, you can sense the widespread frustration with the current economic system. Until the changes come to bring about change in the global economic structure, imbalances will persist and the flux of labor unrest in China, high unemployment in Europe, high debt levels and recurring crisis in financial markets will continue.
In Singapore, we have CBF, increasingly regressive taxation (GST for the poor, tax cuts for the rich) and widening income disparity. CBF will not lead to higher standards of living and a better life for many Singaporeans. It will lock a segment of our populace in a cycle of stagnant or declining wages,, later (or never) retirement and rising cost of living which ultimately means a decline in living standards for many.
1. Despite naysayers saying this is a market is 'double topping' (the first top was in the early Feb and we are at the 2nd top and poised for a fall), there is enough liquidity to drive this market higher. In fact, I believe the market will rise and the rate of rise will increase.
2. The market will peak in mid-May 2010 (12 May 2010 as the best estimate) and fall abruptly.
3. It will fall until roughly the 1st week of July 2010 before it attempts to rebound and peak in the last week of Aug 2010. This 2nd peak may or may not be higher than May peak will mark the end of this rally.
This is what the stock market did following my March 2010 forecast:
My first forecast that the market will continue to rise from March turned out to be correct. I identified a peak in 12 May 2010, but it turned out the market peaked on 27 April 2010 which was 2 weeks earlier. After that peak my forecast was for an abrupt drop in the markets which was realised when we saw the biggest drop in May in the past 40 years.
I'm quite surprised that my models were off by 2 weeks for the peak while it was able to forecast the abrupt drop we saw after the peak was formed. I ran everything through with the latest data and this is what I got:
1. The market will recover from the recent abrupt drop from now until end Jul 2010.
2. In end Jul 2010 to Aug 2010, the market will form a 2nd peak that will be close but lower than the 1st peak. You should really get out if here if you miss the 1st chance to end out in end April early May.
My models look at liquidity and things will dry up as govts implement austerity and stimulus spending wears off as we get close to the end of the year. The rise from June to late Jul should materialise as we still have liquidity and we should be able to see another round of good economic numbers from the US (look at the Ceridian Index for May). For medium term moves the market is largely driven by liquidity - the DOW was able to close up even with yesterday's very poor consumer spending numbers. The actual longer term macro-economic picture remains bleak and this combined with diminishing liquidity will suggest an exit from the stock market towards the end of the year - my model puts it at end-Jul.
Friday, June 11, 2010
I had half a day off the earlier in the week so I had time to walk around. I had a heavy breakfast at my hotel that day. When it was time for lunch I bought a small piece of pizza but couldn't build up an appetite to eat it. I took a seat at a bench to check my map and put the uneaten pizza on the bench. A few people came by to as me if I still wanted the pizza and I told each of them I still wanted it. When the 5th person, a woman with a toddler, came by to ask me for it, I got tired of saying no so I handed the pizza to her. She said thanks, took the pizza, walked away and was eating it about 20 meters from me. Another woman came by and joked, "she's eating it all for herself ...nothing for the toddler". I told her that the woman could have fed the kid earlier but can't afford food for herself. She told me that is unlikely. The welfare state there gives out more than enough for food and housing giving more to those who have children, She cautioned me against giving food or money to people who approached me because they were likely to be unemployed who receive enough from the state but have nothing to do all day so they attempt to supplement their welfare checks by approaching foreigners for money or food.
All over Europe you have unemployment in the double digits with Spain having 20% umemployment. The high unemployment is due in part to the structural problems with the global economy ( I was writing a posting about this before I had to go overseas and it will be up over the weekend). See the solution to the unemployment problem in Europe is very simple ...you can call this solution (CBF)"Cheaper, Better, Faster". European workers where I'm at have a minimum wage of 1300 Euros a month (S$2.2K). All the govt needs to do to get the unemployment down is to to eliminate the minimum wage and create millions of jobs by asking workers to be CBF and accept pay of S$1000 a month. You might think that the cost of living in Europe is exorbitant so workers need much more to survive. I think this is a myth. This may be true 20 years ago but our cost of living has cost up. Cooked food at a restaurant is still expensive by Singapore standards but supermarket prices of uncooked food is about the same. Housing outside main cities which is a real viable option for many who commute to work costs less than public housing in Singapore. Singaporeans pay the 2nd highest electricity rates in the world. You will see advertisements for cars under $10K Euros ($17K). Yes, World Cup 2010 will be shown free in most places here.
While European countries appear to have saddled themselves with large sovereign debts which will require govts here to implement harst austerity measures. Even when they implement the harshest measures to get back to shape, their care for the poor, elderly and unemployed will still be miles ahead of Singapore. Singapore pushes for the CBF economy with armies of low wage workers struggling to survive...they will never do this here because fundamentally they believe that a person working at a full time job should be able to live a decent life and any system that takes that away is wrong and inhumane - they could have easily pushed down their unemployment by forcing down wages and pushing their less fortunate to take up low wage jobs. But they know in the long run, they will produce an unequal divided society and that they, unlike in Singapore, they simply cannot accept.
Monday, June 07, 2010
As for Kong Hee being a good or bad, I learned over time that people are not so simple. Good people can do wrong unethical things and many times 'bad' people do have a softer side. Was Durai a bad person? The court of public opinion was quite harsh making him out to be greedy fundraiser who overpaid himself exploiting the public trust - however, just yesterday, the paper reported that the NKF is now running short on funds and nurses[Link]. Durai did do somethings that were incorrect but he also did many things that were right.
When I was in secondary school, my history teacher taught me something simple but important that I remembered all my life. The idea is borrowed from another religion Taoism:
I'm not a Taoist but the Taoist symbol above is highly meaningful and you don't have to believe in Taoism to appreciate the idea. Within the white part there is a black dot and what is says is there is nothing absolutely good and similarly for the black part there is a white dot to say that nothing is absolutely bad. Apply this to your view of the world and people. To the people in CHC, Kong Hee was absolutely good, to many netizens, he is absolutely bad using religion to get money and success for himself. My belief is Kong Hee is white with a black dot which the CAD is looking at - we don't know the size of that dot or that it actually exists. But Kong Hee's achievements - his ability to motivate, uplift people and change lives...can clearly be seen. Many people whose lives are touched by him probably will be willing to stand by him even if CAD's findings shows something negative...he was never supposed to be perfect and as Christians the Bible tells them than no man is perfect and importance of forgiveness. I was in a small Church a few months ago, long before CHC news broke, to meet a friend. I sat through a sermon during which the pastor of the church told the congregation not to put their faith in pastors and religious leaders, himself included, because as humans there is always a chance, they will let them down...the next part of his message was to have faith in God. Herein lies the wisdom of the message for all CHC members when they go to church, it is not to put their faith in Kong Hee but as Christians they should have faith in God.
Sunday, June 06, 2010
When I heard the graffiti on MRT trains, I thought it was a little odd because we are not a country with characteristics that will produce graffiti artists motivated enough to breaking into the SMRT premises to practise his art form.
It turned out the artists were 2 foreign men - a British tourist who has gone home and a Swiss business consultant working here:
"Oliver Fricker, 32, was accused of committing trespass and vandalism in mid-May, and a district judge who described him as a flight risk set bail at $100,000. His passport was also impounded. A worried-looking Fricker told the judge he needed a lawyer and asked that bail be lowered to US$40,000. But the judge cut him short and rejected the bail request, stressing the seriousness of the offence. " - AsiaOne News[Link]
Unfortunately, for the young Swiss, this is a "serious offence" in Singapore. He has violated security, committed an act of trespass and vandalism. Breaking the law is always very serious in Singapore. Yes, he could have planted a b..mb or sarbotaged the train. See this is Singapore, this Swiss feller has to be made an example so that everyone understands the "seriouness" of the offence. The more he is punished the more people will understand the severity of the crime he has committed and it will be deeply etched in the minds of Singaporeans and all those who come here that what has been done to our MRT train is heinous crime that deserves heavy punishment. But what really has this young Swiss done???....
"The break-in, believed to have taken place before dawn on May 17, was not immediately detected and the train plied its route in full view of commuters, one of whom filmed it and posted a clip on video-sharing site Youtube. " - AsiaOne Report.
He exposed the security flaws in our MRT depots. All they needed to get in was to cut a hole in the fence to get in. Yes, it was too dark to see that "Protected Area" shoot on sight sign that would have struck fear and deterred any good Singaporean. He had about 20-30 minutes to paint undetected because nobody patrols the area or the area is not patrolled frequent enough - they were counting on that big red "Protected Area" sign for security that is a lot cheaper than putting human beings and monitoring systems in place.
There are many ways to look at this painting act. It can be seen as simply youthful mischief. The SMRT can take some free lessons learnt about its security 9r lack of security without paying security consultants millions and thank this Mr. Oliver Fricker. Some may view his art as something colorful and refreshing on our dodgy overcrowded trains.....how we view this act will say a lot about our society.
But let me ask you why do you think Oliver Fricker did it? ...Really why?... He is a business counsultant with a cushy job and one day he woke up and decided to commit a 'serious crime' against Singapore? I think it is more something like this. Oliver Fricker (perhaps aka FrikArtist in the Swiss graffiti circles) wakes up everyday to the MRT to work. The trains are packed like cattle and he like many Singaporeans was started to feel like cattle herded to work everyday. Sometimes the MRT train works more like a microwave when the aircon is turned down. When he goes to the train station everyday he is greeted by signs, "Don't Step over the Yellow Line", "Life is Precious", "Jumping onto the tracks is an Offence", "No Eating or Drinking"...and so on. Fricker feels like cattle - contrained by rules and yellow lines. Frustrated, tired and missing his "Swiss standard" of living, Mr. Fricker woke up one day and hatched what he thought would be a nice refreshing prank to color the train he takes to work and perhaps put a smile or two on the faces of his fellow cattle as they enter the train to be microwaved for the next half or one hour.
I really don't know what was on Fricker's mind when he committed his act. The story above is just one version. But there are many ways to interpret what he has done. Unfortunately Fricker was in Singapore when he committed his act and it will be seen through the eyes of Singapore authorities. He will be seen as a serious criminal committing a serious crime of vandalism and threspass deserving of serious punishment. He will be punished in a way that will instil fear in all those who think of committing the same act. Breaking rules in Singapore is always serious ...regardless of his intent. It is unlikely that Mr. Fricker perhaps woke up one day wanting to commit a serious crime, violate security and endanger Singapore....he most probably woke up one day to break the monotony of his life in Singapore by doing what he probably did many times back home in Switzerland as a teenager (from his art work, you can tell he is no first timer). His biggest mistake is to forget that Singapore is not Switzerland.....
Saturday, June 05, 2010
Earlier I posted 2 articles about the problems with sovereign debt - one in March 2010[Link] before the European sovereign debt crisis intensified and the other in early May 2010[Link] when things started going wrong. The subprime crisis and the sovereign debt crisis are just manifestations of problems caused by a debt ridden global economy. Early this year, I thought there were 2 possiblities going ahead - the 1st, global growth will accelerate in 2010 and ease the debt burdens around the world, the 2nd, is that we cannot make the escape velocity and the economy falters and the debt problems start to overwhelm the global economy. Watching the economic numbers out from all over the world, I now believe only the 2nd hypothesis is left standing. Many people call this the "double dip recession" scenario. I believe calling it that is too optimistic because it suggests that we will recover quickly after the 2nd dip. They called the first dip in 2008-2009 the Great Recession. The American govt and govts around the world mask the severity of economic problems by using fiscal and monetary stimulus. The problem of high debt never disappeared and part of it has returned to haunt us through the Europeans. The game plan of generating sustainable economic growth using stimulus appear to have faltered looking at the latest US jobs report.
In Singapore, many made the same mistakes as the people in Spain, Ireland, US etc. Remember the US housing bubble which was believed to be caused by interest rates being too low for too long. The same phenomena was seen in Spain and Ireland - today Spain's economy is in big trouble with 20% unemployment and a large part of its problems caused by the bursting of its housing bubble. After the western countries got into trouble with housing, we saw property bubbles in China, Hong Kong and Singapore. These bubbles create a lot of economic vulnerability when economic growth slows, the debt becomes a problem.
There were also many imbalances that resulted from the last 4 decades of economic growth include large income disparity which is only seen once other time in history ...before the Great Depression. Wages of workers have been kept too low for too long and demand was generated by the expansion of debt. Westerners borrowed heavily to buy good produced by poorly paid workers in Asia.
In the coming months, I believe, we will first see more signs of a slowdown....this is a bit hard to imagine in Singapore because we just reported the fastest export growth in past few years just last quarter but look out for it as the demand from major our trading partners slow and after that there will be no quick solutions to the economic problems that emerge because they have been in the making for decades.
Wednesday, June 02, 2010
Sometimes I get comments in my blog that seem to suggest that I'm against organised religion or that I'm arrogantly atheist in my thinking. Nothing is further from the truth. I've explained a number of times in my blog that I believe religion is important and that it plays a critical role in our society. I also believe beyond the rigorous scientific truth , many people need faith, hope and comfort that can only be provided by religion.
What I'm strongly against are charlatans who take advantage of others....
and the question now is what did Kong Hee and CHC do with the money they collected - from housewives, NS men and students.
Have you heard of chaos theory? The flutter of a butterfly somewhere in Africa can trigger a chain effect the lead to dramatic events half way around the world. I suggest a similar chain effect might have occurred with the resignation of Hatoyama...but wait isn't the resignation of a prime minister of a G7 country going to add to the host of problems the global economy is already facing???...Here is how his resignation can actually trigger a small stock market rally. For the past 5 weeks, markets have been plagued by erratic exchange rate movements. When the Euro weakens, it sinks stock markets ...when the Yen or US$ strengthens, it leads to commodity and equities selloffs. Movement in currency markets leads movements in equities....people mistake economic reports etc as drivers of stock market movements but it is currency and the carry trade dominate movements of markets.
Hatoyama's resignation has caused the Yen to weaken vs all major currencies. This weakening of Yen has reversed a vicious cycle of selling and liquidation of stocks and commodities. When the Yen weakens, it gives the economic factors a chance to assert and influence the markets helped by the carry trade.
If my understanding of market correlations and inter-relationships is right, markets should start to rally....and as usual the talking heads on CNBC will tell you it is because the US economy is strong, stocks are cheap, and Europe is now stable...but the real reason is Hatoyama resigned and that is like the flutter of a butterfly that set in motion a chain of events seen only by those who can connect the dots......
Tuesday, June 01, 2010
According to media reports, Pastor Kong Hee and 16 others are now under investigation[Link].
Kong Hee and members of the CHC may or may not be guilty of the complaints of misuse of funds made to the COC. We will only know for sure after investigations are completed.
In the past few years, after the NKF scandal we continue to see problems in our charities and religious organisations. There was Youth Challenge[Link], Society for the Blind, St John's Home[Link] and Ren Ci. I think ordinary folks hardly recovered from the Ren Ci shock when the latest news about CHC investigations broke.
In Malaysia, they raided a number of landbanking companies in Oct 2008[Link] including Profitable Plots. We may laugh at Malaysians for losing those jet engines and other negative demonstrations of competence but they did stop those toxic Lehman Minibonds from entering their country, recovered most of the money from Swiss-cash scam[Link] and yes, they are ahead in shutting down these landbanking scams. In Singapore, investors have to take matters into their own hands when it comes to unregulated investments and these group of desperate investors saw no other way to get their money back other than to turn up at Profitable Group's office to demand for it.
I was at a recent investment fair Asian Investment Conference & Exhibition at Suntec[Link] and there were several companies offering investments in commercial real estate in western countries. One sales girl I spoke to promised guaranteed returns on investments and so on. Many Singaporeans like such 'guarantees' and these companies are willing to put it down on paper. However, when they don't honor it, what can you do? Spend money to sue them? Report them to the police? These companies can just shutdown and disappear and you won't get a cent back. In fact guaranteed returns are a red flag especially if they are high (8% and above). If they can guaranteed returns, why are they selling the investment to you instead of keeping it for themselves? Investors who purchased products from Profitable Group are now finding it hard to get anything back despite the promises the company made earlier. In many countries such as Malaysia the authorities will quickly step in so that the maximum amount of money can be recovered. In Singapore they will probably wave this notion of "buyer beware"....basically its "you die, your business".
I urge Singaporeans to keep their investments simple - buy only things you can understand. A simple combination of dividend paying blue chip companies, sufficient insurance and some cash for emergencies will do for most people. Forget foreign property sold here. Why do you think they market these investments here? In Singapore, we pay the highest price for public housing in the world ($600K for a unit at Duxton) and that makes us think that a $100,000 landed property in suburban Australia is cheap. The truth is they might have marked the property up by 100% before selling it here. If you want to buy a property in Australia, get in touch with friends or relatives there who know the market and agents with good reputation. Never buy something marketed here - they sell it here because they can't sell it for the same price back home to people familiar with the market prices.
Shouting, then shoving [Link]
THEY came to demand answers and they were in no mood to take no for an answer.
So they marched up to two Caucasian men who were having a smoke and surrounded them.
The group of 11 men and one woman wanted to talk to one of the Caucasian men regarding their investments.
They identified him as Mr John Nordmann, group operations director of Profitable Group, a global investment firm, which, according to its website, has interests ranging from lubricants to property.
They claimed that the firm had not made good on its promises to them.
But the conversation outside Profitable Group's Stanley Street office in Shenton Way soon spiralled out of control into a shouting match. There was even some pushing.
Mr Nordmann told the group: "Calm down.Why don't you e-mail me your individual cases?"
His suggestion was not only instantly rejected, but it also upset some of the investors.
Said one of them, who gave his name only as Chris: "We have been e-mailing you for the last one year. Stop treating us as though we do not exist."
The shouting outside the office around 3pm attracted the attention of people at a coffee shop nearby. They got up from their seats and turned their heads towards the commotion.
This was when Mr Nordmann invited the group to go up to the firm's office to discuss the matter.
One of those in the group, a 37-year-old who gave his name only as Mr Rajan, was overheard saying to a fellow investor: "We're actually very lucky to see the director outside the office. We were always referred to his subordinates every time we came here."
The day's confrontation had its beginnings with the group's investments with Profitable Group between 2006 and 2009.
They said the terms of their investments, which they claimed promised them a certain return after six months, had not been honoured.
The 12 people claimed that their individual investments in land and lubricants with Profitable Group totalled about $700,000.
And none of them had received any returns, they claimed. They had met on an online forum where they shared their experiences.
Chris claimed he had "pumped in" the most money.
"I have invested more than $180,000... Enough is enough, I'm willing to forfeit my returns so long as the company pay me back the money I have put in," he said.
After Mr Nordmann's invitation to the group, another commotion broke out. An investor later told The New Paper that they were upset because he wanted to go up first whereas they wanted to group with him.
During the tense exchange, Mr Nordmann managed to take the lift to his office.