Thursday, December 24, 2009

Driving Forces

Even if you can identify the driving forces of change, most of the time, they cannot be estimated or measured. This makes risk management notoriously complex.

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Wednesday, December 23, 2009

Not Sunkist. It's Sonkiss

I have been buying these at the 'Shop n Save' not knowing that they aren't Sunkists until a newspaper article printed a story on the Chinese imitation 'Sunkist'. I had thought the supermarket mixed the Chinese ones with Sunkist because it had wanted to price them the same.

Actually these Sonkiss oranges are quite good. They could really pass off as Sunkists. I know what you are thinking. No, they are not fake oranges.

Mitch Albom, "Have a Little Faith"

The Christians has left a big vaccum, and the Lord seems to have used a Jew, married to a Christian to write, "Have a Little Faith".

Some highlights:

"At I Am My Brother's Keeper, there were no dues, no drives, no singles nights. Membership grew the old-fashioned way: a desperate need for God"

"Why still serve God?" He smiled weakly. "What else can I do? It's like when everyone was turning away, and Jesus asked the apostles, 'Will you go, too?' And Peter said, 'Where can I go Lord'

I remember this one very well. An important bit missing here, which goes, " have the words of eternal life'. How many times facing the pressure to choose right over wrong, I have prayed this.

"No." He sook his head. "You can't work your way into heaven. Anytime you try and justify yourself with works, you disqualify yourself with works. What I do here, every day, for the rest of my life, is only my way of saying, 'Lord, regardless of what eternity holds for me, let me give something back to you. I know it don't even no scorecard. But let me make something of my life before I go..'"

Not possible to keep and balance a ledger with God. The only appropriate response is worship.

Each of us must find and leave room for faith. Taking your life into your own hands is no way to live. You will never be happy. Such people are not ready for heaven.

Judging Others

God's grace, always mysterious is at work. We do not judge unless we presume to understand how his grace works. At best, we can only get the direction right but never the distance or the network effects that he has created. What we need is to have faith.

As we approach Christmas, we celebrate that Amazing Grace.

Tuesday, December 22, 2009

Comparing Christmas

Good to spend Christmas in Singapore. Last year we were in Dubai and Christmas there was meaningless. Even during Eid, it wasn't as bright, colorful and joyous as our Hari Raya Puasa.

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Monday, December 21, 2009


Oops! The USD strengthen with stocks. A reversal of the pattern since Lehman fell. Wonder if the market is signaling confidence in the Fed ability to withdraw liquidity. Concomitant bonds prices are softening.

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Thursday, December 17, 2009

Taylor Swift?

Just discovered who she is. Got the lead in from a friend's child on Facebook. Discovered that my niece is also a fan. Went to look at a couple of her musical videos on YouTube. Not bad. Now I am wondering were her songs used in the Twilight series?

Tuesday, December 15, 2009

Why you need NaviMap

In Chapter 5, The Curse and Cost of Complexity, Stephen Leeb book, "Game Over" begins with (I didn't print it here, many copies of it can be found on the Web)

Pythagorean theorem: 24 words

The Lord’s Prayer: 66 words

Archimedes’ Principle: 67 words

The 10 Commandments: 179 words

The Gettysburg Address: 286 words

The Declaration of Independence: 1,300 words

U.S. Government regulations on the sale of cabbage: 26911 words

The point: Well the chapter title says it all; our world has become too complex.

Recently Straits Times interviewed Alvin and Heidi Toffler. They complained of the same.

Perversely people are going about their lives blithely ignoring the complexity. Americans want their sound bites, not knowing this is doing them nothing good. We need something like NaviMap and also get comfortable with it like we hae with the alphabet and numerals; failing which, we are going to serially do dumb things.

Saturday, December 12, 2009

Free Grace

All that is free would be taken for granted unless the receiver understand that it was infinitely costly in the first place.

If it was so costly, only God could have paid for it. What else is costlier than his life?

Therefore if we do not treasure him we cannot but cheapen his grace. We end up getting his gifts but rejecting his person. And in this life he allows it!

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Thursday, December 10, 2009

Conflict of Interest

ST Front page today is an article about SGX revising its rules for listed companies. Reminded me of the article you shared earlier on S-chips. All these were inevitable when you give the then regulator business responsibilities. This has been going on across the Singapore governance landscape. Usually the man in the street becomes the final sucker. That is why it is important not to trust blindly. Always verify especially when investing money. In real life we only have so much time, energy and knowledge and we are forced to stick with the familiar because there is so much cheating going on out there.

The market system has brought us many benefits but it is also going into a "limits of growth" situation where the ill effects start to outweigh the benefits. Just as the thermometer measures our disease risk, the shortening of pay back does the same for measuring the health of the market system.

Monday, December 7, 2009

Philippians 2:21

All the others care only for themselves and not for what matters to Jesus Christ...Philippians 2:21

Was reading Philippians 2 with the children tonight and we came across this. That was what the Apostle Paul said about the people with him. By the way, he was in prison in Rome then.

What was true then, is still true today.

I hope I am laying the foundation for very young people to eventually recognize the Big Pearl better and that this Pearl grows. We shall get closer to that in chapter 3 in a week's time.

New Fridge

Our Panasonic fridge with ice maker arrives today. The trusty old Mitsubishi which we had since December 1990 makes way. It had moved from Pine Grove to here.

Climate change meeting at Copenhagen

From the ST today. See the highlighted below. What does it tells you? Commercial and political interest of course. Terribly irresponsible. No lack of such people in the world today. From those who passed off fake infant formula to such miscreants here.

Ahead of the summit too, another battle has risen: between scientists and climate change deniers who accuse the former of suppressing findings that fail to support their claim that planet Earth is headed for droughts, rising seas and other calamities because of fumes from factories, vehicles and other human activity.

Yesterday, the Intergovernmental Panel on Climate Change (IPCC) hit back at the sceptics, saying it stood by its findings. These have been questioned following a row over the reliability of data from the University of East Anglia.

Hacked e-mail exchanges from the university's Climatic Research Unit, a world leader in the field, have prompted the sceptics, from United States congressmen to Saudi officials, to claim that the IPCC's warnings were essentially hot air.

Adding to the furore, a British newspaper has reported that there had been attempts to break into the offices of climate scientist Andrew Weaver, a contributor to the IPCC's work.

An old computer was stolen on one occasion, while on others, some people tried to impersonate technicians in a bid to access data from the Canadian scientist's office, The Observer said yesterday.

Professor Jean-Pascal van Ypersele, vice-chairman of the IPCC, claimed unnamed conspirators could have paid Russian hackers to break into the university computers to steal the e-mails.

Saturday, December 5, 2009

Future Grace

Bought this book in 2007 but was making really slow progress with it until I also paid for the Kindle version. Completed reading it today. Wonderful book, but not always easy to read especially when you want to do so quickly.

Monday, November 23, 2009

"Your Best Life Now"

Got this from a friend's post on Facebook.

I first became aware of Joel Osteen's in 2006 when an old friend gave me a copy of, "Your Best Life Now" It was something I wouldn't have picked up myself.

So Joel Osteen doesn't preach the Gospel of repentance....

Well, I think if he was less successful, he would have attracted far less attention. As I can see from the video, the preacher outside Osteen's church did not seem to have attracted much attention. They were just walking pass and ignoring him, going into the building to listen to Joel Osteen.

Noisy Information

Do you wish for the old days when information was scarce but if you find it, you can trust it? These days, we are flooded with it but much of its quality is suspicious. We spend so much time shifting, sorting and deciding what is accurate and correct from the shameless lies. The Anglo Saxon media is particularly guilty.

Thursday, November 19, 2009

There is a bubble

Sure there is a growing property bubble in China. Hong Kong is feeling much pressure and Singapore is trying to retard the depreciation of the USD

“Real estate prices should only go up because people want to actually use the space, but at the moment we can see more and more empty buildings across the whole country and in every real estate segment,” Zhang Xin, chief executive of Soho China

No Big Picture

How many times over the years have I heard from Christians they are seeking to know God's will and the big picture of their life? I wonder if that is exceeding their faith most of the time. What is needed is to stay humble and remember we can do no big thing, but only small things with great love driven by faith in future grace.

Some of these small things might become great works. From the perspective of this world perhaps. God might have other ideas.

Belief is so easy that it becomes the most difficult thing.

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Tuesday, November 17, 2009

Christmas Tree @ Ngee Ann City

Took the family on our annual pilgrimage to see this Christmas Tree in Ngee Ann City. Every year, this tree seems less impressive. Well, it wasn't a religious pilgrimage. This is shallow stuff.

Last year, we had to settle for the one in Dubai Mall. It was very big and tall but looked more like a ghost of a Christmas Tree, a pompous art piece devoid of any understanding of Christmas.

Well Business have gradually stolen Christmas from the Christians even as more of them discover that this day was actually an important pagan festival pre-dating Christ's birth.

Well, I do not believe in pilgrimages either.

A superficial comment on Laziness

Laziness is one of the most intriguing aspect of the human personality. Nobody knows he is lazy until he is told. Even looking at other hardworking people doesn't cause him to become aware of it. At the deeper level, even the hard working guy could very well be lazy. Henry Ford understood this well. That hard worker applied himself with much effort and discipline to his work but he doesn't use his brains. Thinking is even harder than brawn work. That hard working fellow didn't know he has been lazy, again it is because nobody explains to him that he really is. Singapore and Japan are full of such hard workers. It is a waste of time.

Who understands that the open book exam can be much harder the closed one? Similarly if calculators are permitted, the math paper is going to be harder? Try it. You will discover that it is due to one simple reason: You have to think more in an open book exams. Maths problems are more knotty when calculators can be used.

Nobody dies from working too hard. The Japanese who died from hard work weren't working hard. He only appeared to be. The reason was stress, the ultimate rebellion to work, which is death. He was forced to go further than he was willing, to the point of losing his purpose for existence. Therefore it is impossible to work hard unless you also love what you do.

If you only love the work you are doing because it brings you pleasure, that is one of the dumbest reason for working hard. The pleasure diminishes because we are so good at getting used to things. Such a person is immature. We work because it is meaningful. Smart employers who create meaningful work find that they do need to pay the highest wages. However they can pay very good and well above average wages because their staff enjoy doing meaningful work and will do well. They also know how to do their jobs better. After all, they know the meaning of their work right?

There is another group of workers who work very hard, may be harder than almost everyone. The guys and girls on Wall Street; and the best renumerated are those from Goldman Sachs (there are smaller firms e.g,, hedge funds that pay better...) They work the hardest. Unfortunately, the meaning of their work isn't a social or economic purpose, it is mostly Greed and Ego. These are the folks who had been seduced into the business before they had found a meaning to their lives that is greater than themselves.

Monday, November 16, 2009

The future of smart personal comm/computing device

Amazing technology from MIT. The ultimate personal communication and computing gadget is always waiting to be invented next.

China is too big and fast for all of us

In the final analysis, the Chinese are just too big and too fast for the rest of the world. We are all also addicted to economic growth. The Chinese were able and more than willing to feed that addiction. They were also willing to take US IOUs.

Ideally the US should export as much as she imports from China but that was not possible.

Now the problem is coming home to roost and it is too scary to contemplate.

People will increasingly lose confidence in the USD and having nowhere else to go, will chase other assets.

Away from the abyss

Staring down into the abyss, all national leaders and their central banks cooperated to avoid falling into it. Now we are safe from financial Armaggedon, naturally everyone has his or her ideas on what is to be done.

We are going to be stuck with a divided world for a while. It is an unpredictable phase. Meanwhile the asset markets are only concerned with liquidity. It is unwise to ignore so many risk factors but that is how the markets always function.

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Wednesday, November 11, 2009

Everyone is paying for US profligacy

We are all helping to pay the debt of US profligacy. See what the Thai FinMin said recently at the APEC meeting held in Singapore.

"We've bought about $15 billion to support the dollar," Korn told Dow Jones Newswires on the sidelines of the Asia Pacific Economic Cooperation Summit.

"We're building up effectively greater level of US dollar reserves. I'm convinced that in the long term the dollar is more likely than not to decline in value, so we're building up assets that are declining in value over time. That's not healthy," he said.

Korn said that while Asian countries have benefited from China's robust economy, the weak yuan that fuels China's growth also forces Asian central banks to curb their own currencies to maintain competitiveness.

"Quite clearly, all Asian central banks have found it necessary to intervene, and it's costing us," he said.

Monday, November 9, 2009

The Son

Got this in the email a while ago. I have received it many times. As I like this story very much. I am going to put it up here.

This is great, take a moment to read it, it will make your day!

The ending will surprise you.

A wealthy man and his son loved to collect rare works of art.. They had everything in their collection, from Picasso to Raphael. They would often sit together and admire the great works of art.

When the Vietnam conflict broke out, the son went to war. He was very courageous and died in battle while rescuing another soldier. The father was notified and grieved deeply for his only son.

About a month later, just before Christmas,

There was a knock at the door. A young man stood at the door with a large package in his hands.

He said, 'Sir, you don't know me, but I am the soldier for whom your son gave his life. He saved many lives that day, and he was carrying me to safety when a bullet struck him in the heart and he died instantly. He often talked about you, and your love for art.' The young man held out this package. 'I know this isn't much. I'm not really a great artist, but I think your son would have wanted you to have this.'

The father opened the package. It was a portrait of his son, painted by the young man. He stared in awe at the way the soldier had captured the personality of his son in the painting. The father was so drawn to the eyes that his own eyes welled up with tears. He thanked the young man and offered to pay him for the picture.. 'Oh, no sir, I could never repay what your son did for me. It's a gift.'

The father hung the portrait over his mantle. Every time visitors came to his home he took them to see the portrait of his son before he showed them any of the other great works he had collected.

The man died a few months later. There was to be a great auction of his paintings. Many influential people gathered, excited over seeing the great paintings and having an opportunity to purchase one for their collection.

On the platform sat the painting of the son. The auctioneer pounded his gavel. 'We will start the bidding with this picture of the son. Who will bid for thi s picture?'

There was silence..

Then a voice in the back of the room shouted, 'We want to see the famous paintings. Skip this one.'

But the auctioneer persisted. 'Will somebody bid fo r this painting? Who will start the bidding? $100, $200?'

Another voice angrily. 'We didn't come to see this painting. We came to see the Van Gogh's, the Rembrandts. Get on with the Real bids!'

But still the auctioneer continued. 'The son! The son! Who'll take the son?'

Finally, a voice came from the very back of the room. It was the longtime gardener of the man and his son. 'I'll give $10 for the painting...' Being a poor man, it was all he could afford.

'We have $10, who will bid $20

'Give it to him for $10. Let's see the masters.'

The crowd was becoming angry. They didn't want the picture of the son.

They wanted the more worthy investments for their collections.

The auctioneer pounded the gavel. 'Going once, twice, SOLD for $10!'

A man sitting on the second row shouted, 'Now let's get on with the collection!'

The auctioneer laid down his gavel. 'I'm sorry, the auction is over.'

'What about the paintings?'

'I am sorry. When I was called to conduct this auction, I was told of a secret stipulation in the will. I was not allowed to reveal that stipulation until this time.. Only the painting of the son would be auctioned. Whoever bought that painting would inherit the entire estate, including the paintings.

The man who took the son gets everything!'

God gave His son 2,000 years ago to die on the cross. Much like the auctioneer, His message today is: 'The son, the son, who'll take the son?'

Because, you see, whoever takes the Son gets everything.


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Sunday, November 8, 2009

Cleaner school shoes

Ever since I made my daughter wash her school shoes, she has kept it cleaner than usual such that sometimes it does not even need to be cleaned for the next week.

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I think we can use the generous maternity benefits as a trojan horse to upgrade the HR practices of the privage sector if the MOM watches and resolve disputes wisely. The bullied women can help themselves by coming forward to complain.

We have been dumbing down, adding bodies to the economy to achieve growth rather than smarting up. We need to reverse this trend.


PREGNANT?  YOU'RE FIRED in bold on page 4 of the Sunday Times today.

The government should just have awarded the more generous maternity benefits to civil servants. Forget about the private sector. They have been taking it out on pregnant women ever since the generous benefits were put in place. These adversely affected, harrassed into resigning or dismissed from their jobs are worse off in the end.

In the last few years, if you want to see pregnant women, other than the obstetrician offices and the maternity wards, the other place to go to are the schools. Well, this is an additional reason why teachers are happier than most others.

Short lived Businesses

1. Entry barriers used to be much higer. Now a flood of people with no business to be in business are in.

2. Too many are in business for a quick buck then to give value to customers. It is amazing how they self talked themselves into believing that they are giving value.

3. There is simply too much money around. A lot of it did not come from long hours, sweat and tears. That is what happen when the economy grows very quickly. Easy come, easy go.

4. Too many books and courses selling how easy it is to start your business. Sure, there are quite a few businesses you can do with no money down. When many people know what these strategies are, it gets crowded.

Saturday, November 7, 2009

Teaching others to draw NaviMaps

Conclusion: Mostly impractical because only a few people would be able to learn it easily.

Revisited this after an interregnum of several years and disappointingly it is the same conclusion. Feel like I am revisiting the same old conclusions! I would really appreciate a break through.

Friday, November 6, 2009

Why be President?

Gotta to tangle with life and death issues like this? Why would anyone want to the job of President?

Kingship has brought the biblical David more sorrow than joy? God promised that he will always have a son on the throne was a plus, a blessing. Is that so? Yes, it was so because....go read Romans.

Moral and Dumb

Read the little story below. It is sad that those who endeavor to live a moral life are not sufficiently savvy and wise about the ways of the other side. This makes me wonder how well founded is the moral life we see and recognized around us. Where is the shrewdness of Christ?

'Bless me Father, for I have sinned.
I have been with a loose girl'.

The priest asks, 'Is that you, little Joey Pagano ?'

'Yes, Father, it is.'

'And who was the girl you were with?'

'I can't tell you, Father. I don't want to ruin her reputation'.

"Well, Joey, I'm sure to find out her name sooner or later
so you may as well tell me now. Was it Tina Minetti?'

'I cannot say.'

'Was it Teresa Mazzarelli?'

'I'll never tell.'

'Was it Nina Capelli?'

'I'm sorry, but I cannot name her.'

'Was it Cathy Piriano?'

'My lips are sealed.'

'Was it Rosa DiAngelo, then?'

'Please, Father, I cannot tell you.'

The priest sighs in frustration.
'You're very tight lipped, and I admire that.
But you've sinned and have to atone.
You cannot be an altar boy now for 4 months.
Now you go and behave yourself.'

Joey walks back to his pew,
and his friend Franco slides over and whispers,

'What'd you get?'

'Four months vacation and five good leads.'

Whatever will be, will be.

Whatever will be, will be. Sure, we can work hard but we live in a world of increasing Black Swans. We are learning to get used to the impossible happening. It is an oxymoron of course. By definition you cannot get used to surprises.

Wednesday, November 4, 2009

Circle of Competence

The FT summarizes Warren Buffet latest deal: Burlington Northern (BNSF) very well.

Bankers said the BNSF take-over was typical of Mr Buffett: a deal at a low point in the economic cycle for a group with few rivals in a sector set to benefit from long-term trends such as rising oil prices and stricter environmental standards.

This is his biggest bet ever but also a classic display of operating within his circle of competence.

Everyone should try to develop his/her circle of competence and update that circle continuously to stay relevant. Most of us will do this outside of investing and perversely will maintain a circle of ignorance. Some will pass it to financial advisers, who sadly live in a circle of ignorance too.

Our health care system

Stanley Jeremiah is mostly correct. Good reminder. Just because most of us didn't need to call upon the system in a catastrophe we forget.

Below his response to the WSJ op-Ed article.

LETTERS NOVEMBER 3, 2009, 5:40 P.M. ET
Singapore Has Health-care Hurdles Too

William McGurn's column "What Singapore Can Teach the White House" (op-ed, Oct. 21) paints an inaccurate picture of Singapore's health-care system and the costs it incurs.

Singapore does not have "universal coverage," as Mr. McGurn asserts. Even the government has admitted that in a country of about three million citizens, tens if not hundreds of thousands of Singaporeans do not have any basic medical insurance coverage, which is provided through government agencies. Many of the uninsured are women and children.

In Singapore, as in the United States, there are people who are uninsured and uninsurable. Even the government's basic health-insurance program, Medishield, refuses to provide cover for those with pre-existing and congenital medical conditions. Parents of a child with a congenital condition have to carry the entire medical cost burden themselves.

It is true that medical costs in Singapore are generally lower than the U.S., but the average Singaporean does not enjoy the same per capita income or standard of living as the average American. Medical costs are significantly higher than in neighboring countries. The minister of health recently admitted in Parliament that many Singaporeans regularly cross the causeway into Malaysia to buy prescription drugs because they are much cheaper there.

The quality of Singapore's medical care is high, but as in the U.S., cost is a pressing issue. To some extent, the situation has been cushioned by the collective responsibility of Asian families, where the larger family chips in to pick up the medical cost of a parent or sibling. Yet these social structures are slowly breaking down. Singapore has an aging population and the baby boomers are the most exposed. Having paid for their parents' medical costs, they have no one to pick up to the tab for them. To avoid picking up the cost for those who cannot pay, the government includes siblings and children—including those living overseas—in their means-testing assessment. Employers provide some level of health-care insurance but these programs are often not portable.

Singapore spends roughly 4% of its annual GDP on health care—one of the lowest outlays in the developed world. The average Singaporean cannot afford to use the upscale Raffles Hospital to which Mr. McGurn refers in his article. They have to wait in line at government-managed hospitals. The 2009 budget allocated 3.7 billion Singapore dollars ($2.6 billion) to health care; by contrast, S$11.5 billion was allocated to defense.

Singapore's medical-savings accounts, known as "Medisave," are not fully controlled by their owners. Withdrawals are subject to a complex set of rules which the Ministry of Health changes from time to time—a process that often baffles the average Singaporean.

In many ways, Singapore is heading in the same direction as the U.S. when it comes to health care. While a high quality of care is available, it is not always accessible or affordable. People unfortunate enough to be born with or develop significant medical conditions can find the cost financially crippling to themselves and to their families.

Stanley Jeremiah


Shell plans to cut 5,000

Got an email yesterday from an ex colleague who like me has left the company many years ago. He told me that Shell is planning to cut 5,000 headcount or about 10% of its work force. I wonder what it must be like had we stayed with the company. On and off I have heard unhappy stories from some of those who are still working there. Just a couple of months back, I was at a retirement dinner for one of my seniors. He used to be so enthusiastic about his work. When I met him again after more than ten years, his attitude couldn't be more different.

The cultures of so many large companies have changed so much in a short time.

Tuesday, November 3, 2009

After the peaceful rise of China

What can we expect after the peaceful rise of China? Will it take a stick to Japan to get even with what she has done to China during the World War II? Will she be a bully?

Nov 3, 2009
MM's speech in US draws flak online in China
BEIJING: Minister Mentor Lee Kuan Yew's comments that the United States should remain engaged in East Asia have drawn criticism on the website of a state-owned newspaper in China.

The Chinese-language Global Times, a sister publication of the flagship People's Daily noted for its international coverage, said it reported on Sunday a speech Mr Lee made in Washington last week, and within hours, it claimed to have received more than 500 comments online.

In his keynote address delivered at the US-Asean Business Council's 25th anniversary gala dinner last Thursday in Washington, MM Lee said the US should remain engaged in Asia. 'The size of China makes it impossible for the rest of Asia, including Japan and India, to match it in weight and capacity in about 20 to 30 years. So we need America to strike a balance.'

He also warned Washington that it risked losing its global leadership if it did not remain engaged in Asia.

MM Lee was conferred a lifetime achievement award for helping to foster US-Asean relations at the dinner last week.

Many of those who responded were upset and said that MM Lee had treated the Chinese as outsiders although they had treated Singaporeans as 'among their own'.

'Lee Kuan Yew spoke for the feeling of those in the West who fear China's rise would harm their vested interests,' said one netizen.

Another described MM Lee as 'a political animal', saying that while he 'relies on China to develop his country's economy, he is ushering wolves here to deal with China'.

A third posting said: 'Just because he has achieved some success in Singapore, he dares to play the guiding light that shows US the way. If he has the stuff, he should go to Africa and offer tips on how to shake off poverty and achieve wealth.'

Another posting brushed off his comments as insignificant as Singapore was a small country. 'Lee Kuan Yew had made such comments likely because Singapore is a small country that needs an interplay of balances in the international arena,' said the netizen.

'However, what significance do his words carry when the reality is that for a voice to be heard and the views realised, one needs to be truly powerful?' the netizen added.

Monday, November 2, 2009


After a break of looking at my notes for so many years, I am reviewing them again. Perhaps this time I would be able to resolve the open issues and ambiguities.

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Friday, October 30, 2009

Bankers' Pay

From the Financial Times,

Bankers fear transatlantic pay split
US financial groups with operations in London are increasingly concerned that British regulators’ tough stance on pay could create a two-tier system in which UK bankers’ bonuses are smaller and spread over a longer period than those of American colleagues.

I welcome this. The US needed some external pressure on this matter. I shan't say more. Guys like George Soros has been more than cogent why these financial types shouldn't be paid like before.

Wednesday, October 28, 2009

Some wisdom from Soros

I got this from the New Yorker and I have also read the FT articles alluded to.

Soros logic is both simple and compelling. I agree with him.

OCTOBER 27, 2009

As a rule, I do not put much store by the statements of billionaires and central-bank chairmen. The former are accorded undue respect because of their wealth, the latter because of the positions they hold. In my experience, neither great riches nor high office are strongly correlated with economic wisdom and common sense. For today, however, I am making an exception: first for George Soros, the veteran speculator and philanthropist, and, in my next post, for Mervyn King, the head of the Bank of England.

Earlier this month, at a conference organized by The Economist, I heard Soros make the elementary but crucial point that rising bank profits, and thus bonuses, are no accident. The Fed, through its zero-interest rate policy and generous lending programs, has deliberately created an environment in which a chimpanzee could run a big bank and make pots of money. Banks can lend from the Fed at zero per cent, buy long-dated Treasury bonds yielding three and a half per cent, and pocket the spread. Rather than nationalizing stricken banks and recapitalizing them that way, Soros said, the U.S. government had opted to help them earn their way back to sound health.

On Friday, in an interview with the Financial Times, Soros elaborated on his theme, declaring, “These earnings are not the achievements of risk takers. They are gifts, hidden gifts, from the government, so I don’t think these monies should be used to pay bonuses. There’s a resentment which I think is justified.”

Finally, in an article in yesterday’s FT, Soros called for stricter regulation, endorsing a twenty-first-century version of Glass Steagall in which banks that benefit from the de facto government safety net, such as Goldman Sachs, JPMorgan, and Citigroup, would be banned from trading on their own accounts. “This may push proprietary traders out of banks and into hedge funds, where they belong,” Soros noted.

It would also mean that taxpayers were no longer subsidizing “heads I win, tails you lose” bets placed by banks that are too big to fail. Does that not sound like an idea worth exploring?


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Tuesday, October 27, 2009

Public Transport Strategy Not Working

The public transport strategy to raise its sare to 79% of all trips by 2020 has suffered a reversal.

From the ST today,

"..public transport's share of the total number of trips made during the morning peak period shrank to 59 per cent last year from 63 per cent in 2004 and 67 per cent in 1997..."


"while public transport journeys increased by 16 per cent, car journeys jumped 31 per cent.

'The heavier car usage has led to an overall drop in the public transport mode share last year,' said the minister.

Between 2004 and last year, car numbers grew by 32 per cent to 550,500."

What this means is simple. Cost of owning a car would have to go up. Car use charges will also be creeping up. The current transportation trend is not tenable.

Sunday, October 25, 2009

Prawn fritters

Look at the prawn fritter standing tall in the middle of the plate. My daughter spotted it and wanted to honor it. In the end we honor it by eating it last. She got it.

This entry was made because she wanted me to. Guess our vain attempt to immortalise it.

iPod Touch

This iPod Touch which I got with the intention of using it as an e-reader and kindle reader has done far more for me. It has reshaped how I use computers.

I am looking forward to what Apple is offering with their tablet device.

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Saturday, October 24, 2009

Singapore: One of the great cities in history

Singapore is listed as one of the great cities of modern times.

As I understand about this government, Singapore no longer belongs to Singaporeans because some believe that is the way to lose it. Singapore now belongs to the world and along the way they will carve a niche for Singaporeans.

In the same way, NY cannot be for New Yorkers only. It is part of America. Ditto Shanghai for China. Therefore Singapore for the world but we have to navigate the politics of sovereignty riding on the economic imperative, i.e., Globalization.

Nothing is worth trading our intangibles for except survival. Not sure if this is the right thing to do.

Excerpt from it: Note Singapore is one of the cities.

And so we reach the Age of the Modern City. It opens – for the purposes of this book – around 1800 though all the cities are hard to confine within a chronological compartment, spreading across centuries, defying our attempts to arrange them neatly in sections. By now, the industrial revolution was well under way, resulting in mass immigration from the countryside to the towns and the appearance of the megalopolis. London and Paris are here for the second time, since both are undergoing a dramatic change: London with its tremendous population explosion – made possible largely by improvements in sanitation – and Paris with the radical surgery of Napoleon III and Baron Haussmann. North America –which has not up to this moment put in an appearance – now looms large: in Canada we look at Montreal, in the United States at New York and Washington, Chicago and Los Angeles. Here too we witness another astonishing innovation – the skyscraper, which in turn owes its existence to the invention of the electric elevator. South of the isthmus of Panama, we cast an eye on Buenos Aires and São Paulo. Europe – apart from London and Paris – is represented by Barcelona, Berlin and Budapest; Asia by New Delhi and Singapore, Shanghai and Tokyo: and Australasia by Sydney.

Friday, October 23, 2009

Windows 7

This is a CNet video of the new Windows 7. Quite neat user interface but I wouldn't be upgrading to it any time soon. One of our Notebooks will get a free upgrade. When it arrives we will install and try it. The rest of our machines, I imagine we will only make the switch when we need to replace them.

Thursday, October 22, 2009

ANZ to Add Bankers in Asia

ANZ to Add Bankers in Asia

ANZ plans to hire as many as 600 bankers and other staff in Asia in the coming 12 months as it pushes ahead with plans to boost its presence in the region.

The above from the WSJ.

They are getting more and more confident. Wonder how many know what they are doing and how many are just playing following the crowd.

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Tuesday, October 20, 2009

The Silent God

Found this at a seventeen year old blog. One day it will be my children's turn to wrestle with this issue. We do not wait for that moment to come. If we learn anything from our own experience when we were that age and from others young people a few years ahead of ours, it is time to pray.

I already know what to tell them but in the end it is a journey each person must take alone. We can only point the way. Perhaps they might draw inspiration, learn from examples of the past.

One important point. Adam and Eve didn't go looking for God, but He went looking for them.

Saturday, October 17, 2009

You can do it

Just recounting an episode of the many times I told my kids that they can do it when they thought otherwise.

Last night Lin made the list to be a grandmaster at She joins five others in her school to enter this club. There are no member's privileges here but the work put in to get there has to a child many unobvious benefits. It will take a while for them to become aware.

I don't think I would be able to cajole her to achieve that had she not had a bruising experience at the Orals earlier.

We must always turn adversity to our advantage. We might not always be able to do so immediately, but we must.

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Friday, October 16, 2009

Education in Dubai

I have read it months before and now I am getting another version of it from this week's issue of the Economist. In "Laggards trying to catch up, Education in the Arab World" I excerpt from it as follows:-

The most rigorous comparative study of education systems, a survey called Trends in International Mathematics and Science Study (TIMSS) that comes out every four years, revealed in its latest report, in 2007, that out of 48 countries tested, all 12 participating Arab countries fell below the average. More disturbingly, less than 1% of students aged 12-13 in ten Arab countries reached an advanced benchmark in science, compared with 32% in Singapore and 10% in the United States. Only one Arab country, Jordan, scored above the international average, with 5% of its 13-year-olds reaching the advanced category.

Quite a few of my girls' teachers at the international school were quite good. Their classmates were mostly very kind, friendly and helpful but they are just not interested in working. They have the potential but not the values or motivation to achieve them my older daughter often chimed.

Teachers? More like trainers

After listening to my daughter describe school. Put with it all the stories and some as eye witness I have seen about teachers, I think it would be more realistic to call them trainers than teachers. Once they have succeeded as trainers, then we designate them as teachers. The bar would be lower as the expectations of teachers are often incredibly high. Why set such a high water mark that many cannot hope to hurdle across?

Thursday, October 15, 2009


For the US, there is no need for inflation. I don't expect it either. Too much supply, not enough demand. Sad to see some of this supply will eventually be destroyed and people will lose their jobs, if not already. The USD will be weak for the very reasons it was strong: Returns in US based assets ertswhile attractive will be underperforming for sometime to come.

I am a believer of Pimco's "new normal"

Oct. 15 (Bloomberg) -- Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., increased holdings of government debt last month and cut mortgage bonds to the lowest level in more than four years.

Gross boosted the $185.7 billion Total Return Fund’s investment in Treasuries, so-called agency debt and other bonds linked to the government to 48 percent of assets in September from 44 percent in August, according to Pimco’s Web site. The holdings are the most since August 2004.

The global economy’s “new normal” as the financial crisis eases will be characterized by heightened government regulation, lower consumption and slower growth, officials at Newport Beach, California-based Pimco have said. Investors should expect total returns on equities of about 5 percent annually as consumers curb spending and increase savings, Gross said in an interview last month with Bloomberg Radio.

The Total Return fund cut mortgage debt to 22 percent, the lowest level since February 2005, from 38 percent. Cash and equivalent securities comprised 2 percent, rising from negative 10 percent, according to the Web site. The fund can have a so- called negative position by using derivatives, futures or by shorting. Pimco is a unit of Munich-based insurer Allianz SE.

Gross said on Sept. 28, he had been buying longer maturity Treasuries in recent weeks as protection against deflation.

Wednesday, October 14, 2009

Barnes and Noble ebooks

Downloaded their ebook reader to try today. Verdict: Unimpressed. Mobipocket is better. I didn't bother with their reader for the iPhone. What turns me off are the prices. For many less popular titles their prices are way beyond what is offering. E.g., Snowball is $28.00 but you can get it for $9.99 at

Barnes and Noble would have to try harder to create a more compelling case to sell ebooks. They are probably more interested in making sales from their walk in customers.

Tuesday, October 13, 2009

Backlash against foreigners

As happening elsewhere, a rising backlash against foreigners here. First it was the lady PR who marched for China's National Day, now this. GV must have been clueless about the mood out there. I thought they should have known better. As usual Singapore style of management often miss critical information. It is our culture.

Citizens do not see the benefits of admitting so many foreigners.

Why give discounts to China patrons only?

Tue, Oct 13, 2009

The New Paper
By Elysa Chen

SOME Singaporean moviegoers were unhappy over Golden Village's "buy three get one free" promotion aimed at Chinese nationals for the Chinese movie The Message.

Netizens felt it was unfair that only a specific group got to enjoy the promotion for the thriller about Chinese spies in the 1940s.

About 160 people even signed up to boycott Golden Village cinemas.
Explaining the promotion, a Golden Village Multiplexes spokesman said: "Rather than GV trying to segregate Singaporeans, this was meant as an incentive for Chinese nationals who might not otherwise have celebrated their national day (by) watching the movie.

"And it's a common practice among many marketers to tactically go for a niche market to increase their sales, such as promotions specially for students and the elderly, etc."

In a post on the Stomp forum, one netizen suggested that the move could be part of the Government's initiative to help foreign talent integrate better with locals.


Yesterday I opened my Facebook page to friends of InspiringThots. Suddenly I feel so exposed but I believe it was the right thing to do. Not sure where this would lead to though. I didn't want to inundate the mailing list. With Facebook a friend is free to visit. With a mailing list, you are intruding. Sure they gave you permission when they signed up. Some even complained that I don't write to them enough. I just feel we shouldn't over do it. I am irked by the endless emails from

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Monday, October 12, 2009

What happened Ghim Moh Primary School

The school have joined with other schools into New Town Primary School at Tanglin Halt in a larger building which used to be Tanglin Primary School. Ghim Moh Primary has been converted into the Singapore Chinese Language Centre.

Naturally they have also given the place a Chinese look.

The former school canteen is now a restaurant, good prices and open to the public too. Most items on the menu will gradually be made available. Yes, the place is new.

Air-conditioned sitting with fake bamboos and cheap Chinese Calligraphy. One read "马到功成". Cheekily I wondered if we would eventually get to see grafitti beside it with "赌马赚钱".

You can see the reception area in the distance.

They hung this outside the school.

Sunday, October 11, 2009

Christmas comes early

At Daiso! Got this photo at Plaza Singapura. I mean, we haven't gotten to Deepavali yet. I guess Christmas is where the money is next. Halloween hasn't made much inroads here yet and I hope never. Short of local festivals to celebrate, I would like to see Thanksgiving celebrated here. It has all the right values.

iPod Touch

My iPod Touch is one of the most useful computer device that I have ever got. It surprised me that I am using my desktop PC less now. I am getting so much better at using the onscreen keypad, not to mention less electricity too.

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Worried about inflation?

I see it transmitted to us via the rising property prices. Car prices are rising too but its logic is peculiar to itself because of government control. What is worrying is when people start acting on their inflation expectation. So far there is no goods hoarding. The money is going into financial assets.

One full circle they will discover that the economy is weak and the higher prices aren't justified. Asset bubbles will burst.

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Tuesday, October 6, 2009

Thermo Pot to Kettle

Switching from a thermo pot to a hotel style kettle usually isn't something worth blogging about. The increase of 12.5% in electricity tariff prompted us to give up out thermo pot. Giving it up represents a long foregone rite of passage for our children - surrendering the milk bottle. When you make milk for babies and toddlers it is very convenient to have a ready supply of hot water. When this need disappears, we continue to enjoy hot water on demand, but having seen how wasteful Dubai was we have become more sensitive about energy use. We like everything to be energy efficient. We started using energy saving light bulbs when we got married more than twenty years ago. Over the years, we have gradually become more energy conscious and that include what we eat too! Eat more than enough, and you have to carry extra baggage everywhere.

Monday, October 5, 2009

HSBC pessimistic

HSBC chief fears another downturn soon. Who will join this club. PIMCO felt it even earlier going by their bingeing on government debt, now standing at 44% of their portfolio.

The markets could do s 'W' but the real economy will just be scratching the bottom of the barrel.

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Exit 17? to the Marina Barrage

I am planning/looking forward to taking the family to visit the Marina Barrage. Understand that it has attracted almost half a million visitors so far. It was opened to the public last year but we were living in Dubai then.

Let me see, looks like the best time to visit is early in the morning? When you can see how the morning sun dart among the features of the landscapes?

Sunday, October 4, 2009

Viktor Frankl

Victor Frankl's, "Man's Search for Meaning" is going to be quite useful input for producing inspirational flash movies and may be a better way to organize them.

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Tree climbing bougainvilla

I have always wanted to come up close to this tree climbing bougainvilla along Commonwealth Avenue West. I got my chance today but not with my regular camera. I have to be content with my modest Nokia phone camera.

Friday, October 2, 2009

Pen Flipping

That was me flipping my pen against a background of matching color. Used to be able to do this much better when I was in school in the 70s and 80s. Hardly carry a pen these days and so I am quite out of practice. My children told me they don't see anyone in school doing it these days. I wonder when they lost it. Perhaps at one time the schools banned them? 

Sunday, September 27, 2009

Do I need progressive lenses?

Yes, I wear glasses but my eyesight has kept up better than most with age. I haven't been willing to pay for bif-focals (awful to look at) or progressives (prciey). Now here is a new invention, "TruFocals" that might solve the problem. There is one drawback though even if it works. You cannot select the frame. I shall let the video but its inventor makes its case.

and here is the company website:

Declining birthrates

I was thinking it either reflect our pessimism or our selfishness. I have been told some women do not want to have kids because they were afraid of pain. I feel like telling them at least they no longer risk death like women of the past.

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Saturday, September 26, 2009

If you feel poorer and less secure in Singapore it is because we have slipped.

Straits Times, Sep 26, 2009

How much is a burger worth?

According to a recent UBS survey, Singaporeans can afford to buy less than what people in many other cities can because prices here have risen more than wages. Sue-Ann Chia and Alvin Foo examine the data and explain this potentially dangerous trend.

IF SINGAPOREANS feel they cannot afford to buy as many things as they could a few years ago, they are not imagining it, according to a survey by Swiss bank UBS.

The proof, so to speak, is in a burger.

The survey shows Singapore workers have to slog longer to earn enough money to bite into a Big Mac. Its price is equivalent to about 36 minutes' worth of work, 14 more than three years ago.

It is, however, just one ingredient in the survey which covered the prices of 122 goods and services.

While a burger index is hardly a scientific study of purchasing power, it does provide some meat to the argument that workers here are getting a tougher deal than those in some other countries.

Singapore's worsened placing on the burger index - a proxy for the cost of goods and services - highlights two possibilities: either that consumption has become more costly, or pay packets have become lighter.

Both are worrying trends which could have crept into the country, serving a double whammy to residents who are feeling the pinch from the downturn.

What accounts for the trend? Is it just a blip or here to stay? More importantly, what are the social and political costs if they persist?

Money not enough

THE UBS survey tracks prices and earnings of 73 cities this year, including Singapore. It started in 1971 with 31 cities, and has since been conducted every three years, with a growing list of cities.

Now, it includes Asian capitals such as Beijing, Kuala Lumpur and New Delhi along with key Western financial centres like London, New York and Zurich.

Price and wage levels are compared across the different cities with a standard basket of 122 goods and services and a set list of 14 professions.

In its latest survey done in March this year, the picture painted of Singapore is not a cheerful sight. It shows that the country is among First World economies in prices but not necessarily in wages.

Singapore is ranked the 24th most expensive city, moving up eight spots from the last survey in 2006. It is more costly than Chicago, Hong Kong and Sydney.

If rent is included, Singapore is even higher, at No. 15.

But there was no similar progress in wage levels. On the contrary, the average hourly gross wage dipped from US$7.30 (S$10.30) in 2006 to US$7.10 this year.

This led to Singapore slipping two notches to 40th position.

Interestingly, Singapore's wage level is just one rung above Moscow's. But in the price chart, Moscow is way down the list, at No. 56 - or 32 places below Singapore.

With pay increases not keeping pace with price hikes, purchasing power is squeezed. Singapore has declined 10 spots to the 50th position, behind cities like Bratislava in Slovakia, Johannesburg in South Africa and Kuala Lumpur in Malaysia.

Are the findings an accurate reflection of Singapore?

Not quite, says MP Seah Kian Peng, who also chairs the Government Parliamentary Committee for Community Development, Youth and Sports.

'The figures may be right, but the conclusion could be wrong,' he notes.

Rather than look at prices and wages in isolation, he says the key considerations should be: Do Singaporeans lead a better life than they did in the past, and are the poor taken care of? (We are learning to live with less, feeling less secure, worrying aloud about future medical costs. We had to make much noise before they begin to look after the poor better but they needed no encouragement to incentivize rich to come here)

'If the answer to both is yes, then moving up or down two notches becomes mere semantics,' he says.

He cites a recent government report which found that the salaries of the bottom 20 per cent of wage earners have risen. Their monthly wages increased from $1,200 in 2006 to $1,310 last year.

Like him, MP and labour leader Halimah Yacob questions the survey's validity.

While she is concerned by the findings of declining purchasing power, she wonders whether the indicators include government aid.

This covers a wide range, from the Workfare Income Supplement for low-wage earners, to rebates and subsidies in healthcare, education and housing. These 'are significant and help people to cope better', she says.

The scepticism of both politicians is shared by some analysts and political watchers, who believe that price comparisons across cities tend to be tenuous.

One key problem, they say, is the survey methodology which may not fully capture different consumption habits. (The other cities and some of them are leading asian ones do not get the same kind handouts like us to do better. The government is planning to make itself a narcotic to its people so that he can boast and remain in power)

Varying prices

TO UBS, the strength of its survey is consistency.

'We measure the same goods across the cities and aggregate these prices in a goods basket that is the same for all the observed cities,' explains Mr Thomas Kaegi, UBS Wealth Management Research's head of macro-economic research for Asia-Pacific.

This enabled its researchers to compare cities on the same indicators.

Using one standard basket of 122 goods and services - from food to Internet connection costs - UBS determined the price levels in various cities.

With that same basket, it analysed the purchasing power of the cities' residents by how much their average incomes - based on 14 professions - can buy from that basket.

Mr Kaegi recognises its weakness - it does not take into account consumer patterns and taste buds that differ across countries.

For instance, veal steak, cheese and frozen pizza are among the 39 food items included in the basket of goods - but these imports from the West are not exactly standard fare for a typical Singaporean.

Diets aside, differences in culture and behaviour are also not captured.

Mr Kaegi observes that many Singaporeans would rather eat out at a hawker centre instead of buying food items and cooking at home, which is what people in Europe generally prefer.

Another example he cites is domestic foreign helpers, who are not included in the reference basket but whose services are widely used here.

'If Europeans were to employ domestic helpers, which they don't, it would make Singapore's price level lower,' he says.

High cost, low wages

DESPITE the survey limitations, there is no denying its broad conclusion that prices in Singapore have risen faster than wages here in the last three years.

The chief culprit appears to be the global recession which robbed workers of wage gains but did little to suppress high prices left by last year's record inflation.

Inflation peaked at a 26-year high of 6.5 per cent last year, owing to soaring food and fuel prices.

Unlike wages, prices have yet to deflate significantly despite the onslaught of the economic crisis late last year, notes DBS economist Irvin Seah.

'Look at general food prices... We saw some slight adjustment, but not as much as the downward adjustment in wages,' he says.

According to Singapore's consumer price index in March - when the UBS survey was conducted - food prices rose 4.6 per cent over the same period last year due to dearer items, from cooked food to fruit and vegetables.

On the other hand, pay packets shrank in the first three months of this year compared with the same period last year, according to Manpower Ministry figures.

Its quarterly labour report showed that real wages - wages minus inflation - had declined by 5.8 per cent.

The timing of the UBS data collection could be another reason for Singapore's poorer showing in the survey ranking. March was when Singapore was bearing the brunt of the global recession.

'Singapore was one of the worst-hit economies during this recession in terms of growth,' notes Mr Seah.

'If you take the reading then, you'll naturally see lower wages and purchasing power relative to other countries which fared better during this recession.'

The low pay of low-skilled workers here also dragged down Singapore's average wage level.

The salary gap is wide when comparing the net incomes of low-skilled workers here and elsewhere, notes economics professor Basant Kapur from the National University of Singapore (NUS).

Drawing a comparison between workers in Singapore and Sydney, the UBS survey figures are telling.

Women sales assistants in Singapore earn an average of US$7,500 a year, less than half the annual income of US$17,700 for those in Sydney.

It is the same fate for bus drivers. In Singapore, they earn US$11,400 a year, while those in Sydney get US$25,000.

In contrast, there is less of a salary gap between higher-skilled workers here and in Sydney.

Department heads in the metal industries earn US$43,100 a year in Singapore, slightly less than the US$52,600 in Sydney. Product managers get US$45,100 a year in Singapore, while those in Sydney receive US$49,800.

The low wages of the lower-skilled in Singapore are due to many factors, says Prof Kapur, including competition from low-wage countries and technological changes which do not favour them.

The influx of foreign workers in recent years, especially in the services sector, has not helped.

'Their availability reduces the incentive for employers to adopt more technologically advanced and productive methods of production that would enable them to offer higher wages,' he notes.

Associate Professor Shandre Thangavelu from the NUS, however, cautions against attributing the wage decline to foreign workers.

Referring to the UBS 2006 and 2009 surveys, he compared the wage levels for different Asian cities.

The wage level index dipped by 13.9 points for Seoul, six points for Taipei, four points for Tokyo, 1.4 points for Kuala Lumpur, and 5.4 points for Singapore.

However, the wage index rose by 6.3 points for Hong Kong and 2.9 points for Bangkok.

'Since other cities in Asia have also experienced similar decline in the wage level... it is difficult to conclude that Singapore's growth model or influx of foreign workers is the cause of the decline,' he notes.

Regardless of the cause, analysts say policymakers ought to even out the imbalance between price and wage costs.

As Assistant Professor Randolph Tan from the Nanyang Technological University puts it: 'Except for labour costs, most things have become more expensive between 2006 and 2009.

'That could imply that in terms of ensuring Singapore's cost competitiveness, we must look beyond wage restraint.'

Middle-class squeeze

IF THESE troubling trends are not reversed, this could lead to growing discontent, especially among the sizeable group of middle-income earners in Singapore.

This same group tends to receive less government aid and rebates, compared to low-income earners who receive more aid to ease their plight.

With lower purchasing power, it would be harder to maintain a middle-class standard of living, notes sociologist Tan Ern Ser from the NUS.

'If we pride ourselves in being a middle-class society with a large middle class, then we would have a high proportion of people experiencing an expectation gap,' he adds.

While the 'expectation gap' could cause some unhappiness, he does not believe it will result in a backlash against the Government.

His reason: The gap is not primarily attributed to government policy but to globalisation.(So the other cities aren't affected by globalization? If so, I vote for less globalisation. What is the use if it makes the majority of us poorer?)

'Also, the middle class in Singapore constitutes only a category, not a united, highly charged political force.'

But for a government whose mandate rests on delivering a better life for citizens, it will need to ameliorate the pain, note analysts.

'If the Government can convince the middle class they are doing better than the middle classes elsewhere, and that the problem lies with global competition, then the political consequences could be moderated somewhat, or even become non-existent,' says Dr Tan.

Placating the people

FOR now, it could still be possible to lay the bulk of the blame on external forces like globalisation, because fiscal measures are fuelling the slowly recovering economy.

But not forever.

'If the situation of falling wage levels and declining purchasing power deteriorates rapidly, then it would undermine the performance legitimacy of the Government,' says political observer Eugene Tan.

Economic growth which prospers people is a fundamental basis of the Government's legitimacy, he notes.

'A continual decline in purchasing power will deflate the Government's bragging rights that it fosters shared economic growth.

'In turn, public opinion that the Government's economic policy is not working will be stoked, accompanied by the greater likelihood that voters may be bolder in wanting to try alternatives,' he adds.

If this happens, 'the possibility of a significant swing against the ruling party cannot be ruled out', says the law lecturer from Singapore Management University.

To keep any such eventuality at bay, Singapore needs to fine-tune strategies to ensure that it not only remains competitive but also mitigates the constant downward pressure on wages, notes Dr Gillian Koh, a senior research fellow at the Institute of Policy Studies.

During the depth of crisis, the Government went swiftly to the aid of Singaporeans and companies, unveiling a $20.5 billion Resilience Package in its January Budget.

Families received twice the amount of goods and services tax (GST) credits. Those living in HDB flats also received increased rebates for service and conservancy charges, with one- to three-roomers getting an extra month of rebate and owners of bigger flats receiving half a month more.

In addition, low-wage earners received 50 per cent more Workfare grants to supplement their income as well as more transport vouchers.

Dr Koh says the challenge for the Government lies in convincing people it is doing all it can to improve the economy which, in turn, will increase the number of well-off citizens.

However, Singaporeans too must take the initiative to improve their lives, she adds.

CIMB-GK regional economist Song Seng Wun believes Singaporeans should be better off by 2012, especially if inflation stabilises to around 1.5 per cent.

'With asset inflation, more stable food prices, we'll see affordability moving up if economic growth returns to normal. Wages will be pulled up as well,' he says.

From YouTube: Singapore in 1938

First saw this at FM George Yeo's Facebook page. A friened pointed it out to us again this morning and I decided to "immortalize" it here so that I wouldn't lose it.

Friday, September 25, 2009

The Black Swan The Impact Of The Highly Improbable

An indispensable book on Risk. Check it out as a SlideShare Presentation:

Asset Markets Rallies - A game of transferring wealth

All over the world, especially in emerging economies, asset markets are rallying hot. I did not foresee this and I think it is too late to join the party. Yes, you can still make money but the risk reward now is bad, the margin of safety too small.

Simply put, these are liquidity fueled rallies because cash is returning zero. The best risk/reward is when you got in near the ground floor. Liquidity led rallies have a nasty habit of reversing suddenly, so when it happen, and you had failed to get out earlier, you are square since you entered at the bottom. Everyone else net of those who bought and profit from you has will be staring at losses. May be we will have another round of financially ruined people committing suicide.

A liquidity fueled bull run is nothing but a Ponzi scheme. Wealth is not made as there are no fundamentals, i.e., earnings and cash flows to support higher asset prices. Those who bought low and sold high, must be matched by those who bought high and sold low.

The end of the liquidity binge is almost impossible to forecast, but there are only two causes: natural or unnatural. The natural cause will take the markets higher than the unnatural one. In this instance, the unnatural cause comes from governments draining liquidity, which requires political courage of the first order (not likely). The natural cause is when assets got so over valued, greed eventually gave way to fear against a tower of unreal values. Like a sand pile, it is impossible to forecast when it will collapse, only that it will.

Unfortunately for the prudent, the natural collapse of prices might not happen for a very long time. The wait might be years. Since politicians and central bankers mostly have no guts, this is the more likely outcome.

If you want to make money, on a risk/reward basis, find assets that give you cash flows. Capital gains in this cycle is a fool's game.

Economics of mooncakes

Ever wonder why there isn't a price war to take down the price of mooncakes? Market forces isn't working here.

Economics has too many dismal exceptions. For mooncakes the price didn't fall but the packaging and now even its presentation have improved markedly. The competition in non-price.

To get mooncakes at bargain prices, wait for the 15th day of the eigth lunar month. It is a sale that puts post christmas sales to shame.

Economics 101 I got from school was useless, good only for a world that only exists in computer games.

This is a test blog post from the iPod.

Wednesday, September 23, 2009

So much money, it is producing funny results

If you take the money the US government has pumped into its economy and pour into practically any member of the UN, it will be washed off the surface of this planet. These trillions is producing the most unexpected outcomes. Yesterday I read the FDIC is contemplating borrowing money from the banks the government help to keep afloat because it is short of money from too many banks failing. The regulator is getting money from the regulated? How can this be?

It is beginning to dawn on me that money running around in rivers produce the most unexpected outcomes. When fear was high, the money was trapped in liquidity reservoirs. Now there is enough for it to flow any and every where - It is hasn't come to your neighbourhood yet (not your pocket) don't worry it will, likely as inflation and hopefully as economic opportunities for you as well.

No wonder it is impossible to tell if this economic recovery is real. Tolerate the debts, get on with any productive investment (can never be sure), service, manufacturing and consumption you can find, as long as it is not wasted, we could start virtuous cycles and create a real economic recovery. In short, the recovery is real if we make it so. However if we corrupt or waste it away, we will end up worse than we begun.

Tuesday, September 22, 2009

Asia Recovers

How real is this economic recovery? Let's keep it simple. We fell into this crisis from a massive loss of confidence. We will recover as we regain our confidence. The more indebted economies have less confidence. So they come up more slowly.

Monday, September 21, 2009

My outlier classmate.

So happy for him because he is doing what he loves - the performing arts. Kwong Ming or Jeremiah Choy as he introduces himself these days was my classmate from secondary school.

He has appeared in the papers for the fun stuff several times, but I shall only be able to remember this one because blogs weren't available for journaling.

I have another reason for posting this. To forward it to our teacher who has moved to San Francisco.

How many of us have the same luck as Jeremiah to pursue our passions? I can safely say the majority of us don't even know what our passions are. The thing you are passionate about, especially if you are a young person could very well be a passing fad. That was what my parents though when I became a Christ believer at thirteen. Later in life, key choices we made usually led us away, perhaps forever from discovering our passions. Often the economic imperative consumes most of our energies and attention. We hope with more national and personal wealth, we shall finally have a younger generation with the luxury of discovering and pursuing what they love. I am not so sure.

Beyond passion, I think finding the purpose of our existence is far more important. For most of us, this meaning is embedded in our families and maybe our work. Yet deeper than family and work we must go to plumb for that centre of gravity of why we are here and doing what we do. Eventually we will find ourselves entering the realm of philosophy and religion. And if you never get there, then you have not lived at all.  The majority do not need to articulate its beliefs; and I am afraid many never here never discover they have such a void needing to be filled. However for those living along the fringes, they will always have to explain themselves because they need to connect with the mainstream and obtain permission to influence us. Ticket sales, business success is the mean to this end. In this way, artists can turn their passion into meaning. albeit superficially.

Am I saying that many artists labour under meaningless passions? Perhaps they are still seeking the meaning of their work? Something to ask Kwong Ming when we next have our class reunion.

Ancestral Tablets

Don't you think these three towers that is iconic to the upcoming integrated resorsts (aka casino) look like giant ancestral tablets? This is the result when they are no towering neighbours around to break the view.

When they add the roof which will connect these three towers over the next few months, it will look like an altar. People can climb up and "pray to heaven" for luck before going downstairs to try their luck, which I am sure would be bad luck for most. No net wealth is produced here. It is meaningful only to Singapore if many foreigners come to enjoy themselves and leave their money here, the faster they do it the better. We are not defrauding them, it is just commerce. I don't think it is value for money. It is leveraging human weakness but we will make sure to minimize the impact on the host - Singapore's heartland families.

Amazing US Treasuries

Chinese government bonds have few buyers, but US treasuries is getting lots of demand in view that they are printing money like no tomorrow! This is a very strange world.
Personally I would be wary of holding these bonds long term. The environment is more unstable than ever and the herd keeps changing direction. Nothing is for buying and hold unless the price is right. Such assets needs much hard work to find and identify.

China Can’t Buy Enough Bonds as Dollar No Deterrent (Update1)

By Cordell Eddings and Lukanyo Mnyanda

Sept. 21 (Bloomberg) -- International investors are increasing purchases of Treasuries on a bet U.S. inflation will remain subdued, even as the dollar falls to the lowest levels of the year and the budget deficit tops $1 trillion.

Investors outside the U.S. bought 43.1 percent of the $1.41 trillion of notes and bonds sold by the Treasury Department this year, compared with 27.1 percent of the $527 billion issued at this point in 2008, government figures show. The Merrill Lynch & Co. Treasury Master Index of U.S. securities returned 1.18 percent in the third quarter after the worst first half on record as demand from the investor group that includes central banks climbed to record levels at Treasury auctions.

The trade-weighted U.S. Dollar Index’s 15 percent decline from its high this year on March 4 has proved no obstacle in Treasury auctions, aiding President Barack Obama’s efforts to sell an unprecedented amount of debt. Fund managers say their money is safe in the U.S. with expectations for inflation as measured by indexed bonds below the five-year average.

Treasuries are “starting to look like even a better value with a weaker dollar,” said Dave Chappell, who manages $90 billion in London at Threadneedle Asset Management Ltd., and has been buying longer maturity U.S. government debt.

The 10-year note yield rose 12 basis points last week, or 0.12 percentage point, to 3.46 percent, according to BGCantor Market Data. That’s the most since gaining 37 basis points in the five days ended Aug. 7. The 3.625 percent security due August 2019 fell 1, or $10 per $1,000 face amount, to 101 11/32.

Treasuries were unchanged today as of 10:01 a.m. in Hong Kong, with trading closed in Japan and Singapore for holidays.

Record Issuance

This week the U.S. will sell $112 billion of 2-, 5- and 7- year notes. The amount will be a record for that combination of maturities, exceeding the $109 billion sold the week of Aug. 24. Treasuries rallied that week, with the yield on the 10-year note falling 12 basis points to 3.45 percent.

Federal Reserve holdings of Treasuries on behalf of foreign accounts rose 16 percent to $2.07 trillion since the March high in the Dollar Index.

China, the biggest foreign owner of Treasuries, added $24.1 billion in July after net sales of $25.1 billion in June, raising its stake in U.S. government debt 3.1 percent to $800.5 billion, Treasury data showed on Sept. 16. The country’s holdings have risen 10 percent this year, after a 52 percent gain in 2008 amid the surge in demand for the safety of U.S. government debt as global credit markets froze.

Little Choice

Foreign governments have little choice than to buy Treasuries because they hold so many dollars. The U.S. dollar accounts for 65 percent for world currency reserves, up from 62.8 percent in mid-2008, according to the International Monetary Fund in Washington.

The Obama administration needs the foreign help to fund the debt sales needed for his $787 billion stimulus spending package. Chinese Premier Wen Jiabao said in March that the Asian nation was “worried” about the safety of its investment as a weakening dollar erodes the value of its record $2.1 trillion of foreign-exchange reserves.

“The interest rate on long-term Treasury bonds is at a very low level by historical standards,” said David Dollar, the U.S. Treasury Department’s economic and financial emissary to China on Sept. 11 at the World Economic Forum meeting in Dalian, China. “That says that the market has confidence the U.S. will get the fiscal problem under control.”

Inflation Protected Debt

Yields on U.S. inflation-protected debt show there’s little concern about consumer prices eroding the value of bonds’ fixed payments. The difference in rates on 10-year notes and Treasury Inflation Protected Securities, or TIPS, which reflects the outlook among traders for consumer prices, is 1.82 percentage points. While up from 0.04 points in November, the level is below the average of 2.19 points over the past five years.

The U.S. has the lowest so-called breakeven rates of any major sovereign debt market except Japan. The difference between three-year maturities is 0.71 point, below the average of 2.21 points this decade.

Prices of goods imported into the U.S. tumbled 15 percent in August from a year earlier, after a record 19.2 percent drop in July, the Labor Department said Sept. 11.

“There is no inflation on the horizon,” said Michael Cheah, who manages $2 billion in bonds at SunAmerica Asset Management in Jersey City, New Jersey. “The market is comfortable that the Fed will keep rates low and there isn’t much of an alternative.”

Current-Account Deficit

The Fed’s announcement June 24 that it anticipates the target rate for overnight loans between banks will stay at zero to 0.25 percent for an extended period is keeping two-year notes anchored near current levels. Policy makers meet Sept. 22-23 in Washington. Traders are pricing in less than a 50 percent chance of a rate increase before March, federal funds futures show.

A weaker dollar has increased concern among some investors as the budget and current-account deficits come back into focus in the currency market. The U.S. government and the Fed have spent, lent or committed more than $12 trillion in a bid to revive the economy and credit markets.

Economists forecast the current-account deficit will rise to 3.2 percent of gross domestic product in 2010 and 3.5 percent in 2011 from 2.9 percent this year as consumer and business spending boost imports and oil prices increase, according to the median estimates in Bloomberg News surveys.

‘Hard to Find’

“Even though U.S. asset markets are doing well, they’re not doing well enough,” Steven Englander, the chief currency strategist for the Americas at Barclays Capital Inc., said in an interview with Bloomberg Radio on Sept. 17. “The question is, what is there in the U.S. to attract capital? And that answer is hard to find.”

Investors buying a 10-year note today will lose 0.2 percent if yields rise to 3.57 percent by year-end as projected in a Bloomberg survey of forecasts. On an unhedged basis, European investors would have lost 13 percent on 10-year notes since the start of the year, according to Merrill Lynch index data.

Even with last week’s drop in bond prices, Treasuries have returned 2.8 percent in the past three months, including reinvested interest, beating the 2.3 percent return for mortgage-backed bonds, according to indexes compiled by Merrill. The rally reflects skepticism about the sustainability of the economic recovery once government stimulus ends.

Rising Unemployment

The Obama administration forecasts that unemployment in the world’s largest economy will rise above 10 percent in the first quarter. The jobless rate increased to 9.7 percent in August, a quarter-century high. Fed Chairman Ben S. Bernanke said in Washington Sept. 15 that the worst U.S. recession since the 1930s probably ended, while adding that growth may not be strong enough to quickly reduce unemployment.

If you subscribe to the double dip school of thought this may not be a bad entry point for Treasuries,” said Steve Rodosky, the head of Treasury and derivatives trading at Newport Beach, California-based Pacific Investment Management Co., manager of the word’s biggest bond fund. “The longer-term risk is that the weaker dollar is the cause or affect of people diversifying their holdings or using other currencies as a global currency, but we are a long way from that.”

Yields on 10-year notes may fall toward 3 percent, the least in five months and down from 3.47 percent last week, as the inflation rate drops, Francesco Garzarelli, chief interest- rate strategist in London at Goldman Sachs Group Inc., wrote in a Sept. 15 research report.

“The international community has not lost favor with Treasuries, and the weakening currency allows an opportunity to increase their exposure,” Rodosky said.

Pimco’s Changes

Bill Gross, who runs Pimco’s Total Return Fund, increased holdings of government-related debt last month to the most in five years, according to the company’s Web site. Gross boosted the $177.5 billion fund’s investment in Treasuries, so-called agency debt and other bonds linked to the government to 44 percent of assets, the most since August 2004, from 25 percent in July.

The U.S. will sell $43 billion in two-year notes tomorrow, $40 billion of five-year debt on Sept. 23 and $29 billion in seven-year securities on Sept. 24.

Indirect bidders, the class of investors that includes foreign central banks, bought 49.4 percent of the notes at the two-year auction, up from 33 percent in July’s sale. They purchased 56.4 percent of the five-year notes, compared with 36.7 percent in July, and 61.2 percent of the seven-year securities, above the average of 43.7 percent at the prior six sales of that maturity.

China and a few other central banks have grumbled about the dollar but they don’t have many other alternatives so they keep buying,” said Michael Atkin, head of sovereign research at Putnam Investments in Boston, who helps oversee $12 billion in fixed-income assets.

To contact the reporter on this story: Cordell Eddings in New York at Lukanyo Mnyanda in London at

Last Updated: September 20, 2009 22:25 EDT