[redbean]

Serving life sentences in paradise

There are people serving life sentences in prison, there are people serving life sentences out the prison. In puritanical red dot, once you have committed a crime, even a small indiscretion, or when done at a very tender age, you will have to pay for it for life. In the ST today, it reported cases of trainee dealers in the two casinos waiting to be opened being rejected for their past crimes. The Casino Regulatory Authority rejected their applications to work as dealers in the casinos. So much about giving people a second chance and being forgiving. Oh, yes, forgiven but not forgotten.

In the land where rules and regulations are managed by angels, people who are whiter than white, or who have never have had any indiscretion in their lives, they demanded that the ordinary mortals must also live up to that kind of standards. Such obsession with rules and regulations pervades the whole society in all organisations. One mistake and it sticks with the person for life, no matter how serious and minor.

This is the mindset of the successful people in paradise. They carry the rules and wave the rules at the less than perfect and punish them with life sentences at their own discretion. Perhaps I may be wrong here and presumably the CRA would have taken some effort to look at each case individually to assess their merits. For there must be cases when youth innocence would lead the adolescence to some mischiefs or trepassing the forbiddens. There could be people who become a change person for the better after making some mistakes in life. There could be some mistakes that are so minor that there is no need to tar a person for life as a bad person.

Then I reflect on the reply by the spokesman of CRA, Vivian Heng who said, 'The criteria for approving special employee licences are consistent with those of jurisdictions such as the Unted States and Australia...They are essentially stringent criteria, given that a casino is an environment where very large amounts of cash are involved. thus, those with criminal records that involve dishonesty, lack of integrity or a blatant disregard for the law would not be suitable for this specific industry.'

Given this kind of reply, it can be safely concluded that there is no room for discussion or exceptions. It is simply a white and black case. I wonder how many people will not be employed in the finance and banking industry if these rulings are also applied? Those involved in the lehmon fiasco should definitely be barred from employment for sure. What about the bankers and fund managers? According to the general perception in America, most of the bankers and finance executives are crooks and dishonest people. But they done it differently, sophisticatedly, cooking the books, cooking lehmon bonds etc, all within the acceptable practices of the industry. Their indiscretions are much more innocent than selling pirated CDs or being caught for shop liftings as a juvenile.

Then some recent cases of top notch local executives caught with their hands in the cooky jars were quickly forgiven and landed in jobs with responsibilities in managing huge amounts of money and paying high salaries too. If these crooks can be forgiven, why can't the small guys be given a second chance? The casinos have their own tight security control measures and supervision. Unless these petty ex criminals who have paid the price for their wrongful acts prove to be incorrigible, can the angels be more merciful?

The article is copied from Asian Correspondent.
_________________
what i posted is just my personal view. feel free to disagree.

[redbean]

Check mate the bankers

The ST Editorial picks up from where Obama and his team have left, to rein in the gamblers running banks and financial institutions. It is one of the most sensible editorial piece in recent times. The main argument is to prevent the bankers from taking high risk with the depositors’ money and return to their more conservative business practices. Go back to fundamentals of banking.

And the main culprit is also nailed. Derivatives. Creating and issuing of derivatives is like allowing the financial institutions to print money, often unsecured papers to be sold to the public. It is no different from the Lehman notes. These are high, or very highly leverage instruments that are often worth nothing but only another proxy instrument for trading or gambling. Period.

Obama should just curb the propagation of these instruments in the market and it will save them and the banks from going into more deep trouble. The market must be regulated. Under regulation has proven to be deadly and destructive. And yes, the free market and free market forces will correct the market is a myth. It will lead to disaster as greed knows no bounds.

Would people learn from it? Pray Obama and his team will succeed and other countries will learn to follow what is right from them and not from the previous regimes of gamblers and bandits.

The article is copied from Asian Correspondent.
_________________
what i posted is just my personal view. feel free to disagree.

[redbean]

How many casinos is enough?

One casino licence has been issued to Resorts World Sentosa. Marina Bay Sands should be getting theirs in no time. Would the two casinos be enough to satisfy the gambling urge of the Singaporean gamblers. And to include the Toto, 4D, Football Pool and Turf Club, I think we should have enough gambling instruments and organisations to please everyone in need of pleasing.

With Singaporean gamblers now spoilt for choices, maybe it is high time that MAS take a more serious view of the financial industry, including banking and the stock market, to reduce or remove the gambling elements in them. The banking and finance industry used to be solid institutions for long term investment and perhaps slower growth. But with the ingenuities of the financial experts, many paper products were created and pushed to the investors with little regards to the harm they are causing to them and the industry as a whole. The minibond saga was a case in point.

Tbere are many derivaties that are in the market, worthless pieces of paper that are not backed by any securities or collaterals, or heavily leveraged that when there is a call to dump them, many investors will end up with practically nothing but yes, worthless papers like the Lehman Bonds and other toxic products.

It is opportune time to reflect on the health of the banking and finance industry and rein in fictitious and questionable products from the market. Just because the Americans are doing it, marketing it and playing with it, it does not mean that they are reasonably save products. They are mostly leveraged tens of times of their real values and at times the real values could be as much as the value of the pieces of paper they are printed.

The banking and finance industry must return to their fundamentals and slower growth. The industry in American are highly geared to pay astronomical bonuses by taking high risks that are unbecoming of the institutions that are the cornerstones of the whole financial industry and the economy.

The products are highly dangerous and only fit for the casinos. We don't need more casinos.
_________________
what i posted is just my personal view. feel free to disagree.

[redbean]

High demands for HDB flats due to immigrants

The most authoritative political writer of the ST has given her take on the high demand and high prices of HDB flats. Chua Mui Hoong has concluded that it was due to high demand, particularly from the immigrants. She quoted figures to support her conclusion. 25,000 couples marry each year. Over 7,000 couples file for divorce annually and some may need a new home. In 2008, nearly 80,000 granted PRs and 20,000 given citizenships.The number of resale transactions in 2009 was 37,205, a 31% increase over 2008.

Were her figures convincing? I think so. And she must have got them from official sources, not from the gossip circles.

HDB has replied a few days ago that the cries of demands were misplaced as demands were not high and they have enough supplies to cater for them. Everyone who applies will get a flat in 3 years! And inspite of saying that, HDB is ramming up the building of more flats. I think if the demand is not there, the high building programme will end up with over supply. But then again no. Only those who have registered are considered demands and when there are enough demands then only HDB will build.

Somehow HDB is missing something. Chua Mui Hoong should present her statistics to HDB to let them have a better look at the overall picture of population growth. But it may be of no use as the numbers may not be translated into genuine demands if the immigrants did not apply to HDB.

So, who is wiser?
_________________
what i posted is just my personal view. feel free to disagree.

[redbean]

The goodness of derivatives

I have been against derivatives in the stock markets and the financial systems for its high leverage and extremely high risks. The US subprime loan crisis was a result of the same instrument being packaged as very attractive long term cheap loans but sold several times over on a single diluted asset.

In an article in the ST today, it was revealed that Goldman Sach was instrumental in saving Greece from its huge debt and still able to keep on spending more. Ingenious is the word. The process is very simple, offered a loan and lengthen the repayment period for as long as possible, and make repayment looks very affordable, maybe over 30 years or 60 years or even 100 years. And the loan was not recognised or recorded as debt in the accounts books. So no debt or debt free, while actually being weighed down by a mountain of debt.

Such instruments of deferred payment to the unknown future, maybe the next generation to repay, will come in very handy in any country that thrives and encourages forward spending, or taking huge loans. It is the basic principle of spending now and pay latter. And borrowers were convinced that the future is always brighter and tomorrow will be better. So go spend now, with future money.

Our high mortgages in our affordable housing ballon is built under the same premises. Young people are encouraged to take huge housing loans in the millions under the belief that their future income will see them through. At 30% of two incomes repayable over 30 years, it is actually 60% in debt. As employees earning a salary, no matter how capable they are, the chances of losing their jobs or incomes is always hanging over their heads like a swinging axe.

But now they should not worry if they can rely on derivatives or swap instruments for help. Financial institutions should design more of such instruments in preparation of a surge in demands in the future should the economy take a dip and unemployment rises. Under the principle of future income, looking into 50 or 60 years ahead, they can design instruments along such lines. And the borrowers can happily go ahead and spend more, and borrow more.

Derivatives and swap instruments will be the saviour of the day. Greece is saved for the day. Ooops.
_________________
what i posted is just my personal view. feel free to disagree.

[redbean]

Singapore's 50 Most Trusted Individuals

The Asian Reader's Digest conducted a poll on 760 Singaporeans and asked them who they trusted most. 50 individuals finally emerged as the top most trusted men and women in Singapore. They include a top judge, a top cop, ambassadors, doctors, businessmen and women and comedians. I did not see the full list but some prominent professionals of eminent Singaporeans did not make it to the list, eg lawyers, bankers and people from the finance industry etc. But most notable was the absence of politicians.

I thought, my god, the people have no trust for their politicians. Then I read further and it said 'the general elections have proven the country's leaders already rank highly...' and thus were omitted. I don't know what this statement means. It would be interesting if politicians were also included to give the people an insight into how well regarded they were.

Then again it will be quite pointless if we end up with a survey when the top 50 most trusted individuals were all politicians. It will be quite embarrassing to the other professions and individuals. It will be equally embarrassing if one or two politicians did not appear as these are the most honest and highly regarded individuals we can find in our country. Anyone not in the list could be a slap in the face.

Another reason for the exclusion of politicians in the survey could be a kind of self censorship. Ranking politicians with the mortals is unbecoming and can be sensitive. Better stay away from controversy. Whatever the reasons, the reason given for their exclusion is the most enlighten one.
_________________
what i posted is just my personal view. feel free to disagree.

[redbean]

Selling snake oils to gullible Asians

British insurer Prudential is tapping sovereign wealth funds in China and Singapore to help finance its 35.5 billion dollar buyout of US insurance giant AIG's Asian arm, a report said Tuesday.
It said the Singaporean and Chinese sovereign wealth funds had not made a final decision but their response was positive...From Sydney Morning Herald

I hope we have learnt our lesson and stop buying more snake oil products when nobody dares to touch. All the oranges bought so far are lehmons. If we ever commit to another lehmon and lose another few billions, it is like begging to be screwed.
_________________
what i posted is just my personal view. feel free to disagree.

[redbean]

The great market forces at work in Sengkang

The Sengkang executive condo site was awarded to the top bidder at $315 psf. And the likely selling price will be over $650 psf. So no one should complain about the high sale price. It is all determined in an open and fairly bidded exercise. And the price final price will be determined by the highest bidder. Oops, no, by market forces.

No one shall be blamed for the surging prices for public flats even if the developer bid it to $1000 psf. It is just market forces. Demand and supply.

What kind of demand is there on limited land available? Last year, there were 59,500 new PRs and 19,900 new citizens. How are these numbers to be translated into demand for housing? Beats me. Very difficult to compute or guess. Even the professionals would not know.
_________________
what i posted is just my personal view. feel free to disagree.

[redbean]

America tightening the ropes on credit card robbery

The Fed is proposing to limit the excessive late fees imposed by credit card companies on their card holders. An example of the change is that 'a person cannot be made to pay more than the sum he is owing for late fees. So if one is owing $20, the card company cannot charge the bugger for $60 as late fee. Holycow, I thought this is only a decent thing to do. You mean they have been allowing such robbery to go on for so long and just work up to it?

And there are several other commonsensical changes to limit the credit card companies from robbing their cardholders, like suka suka imposing higher interest rate, or the number of days that the payment was late before penalty can be imposed. But regulators complained that the Fed forget to lower the absurdly high interest rate of 2% monthly, which is quite similar to what loan sharks are charging.

But I think the Fed's hands are tied. The bankers and credit card companies need the huge interest and profits to pay themselves billions in bonuses, and this must come from somewhere.

Talking about robbers, I was robbed by a local bank of several hundred dollars in a dormant account which I had forgotten because of the $2 monthly fee charge for anything less than $1,500 left in the account. Some people are reviving this complain, that people's bank must also take care of the small people. But the message is that if you cannot have $1,500 in your account, please don't 'kar chow' the big banks. They got no time for small people.

And since we are the admirers and blind followers of the American system and anything American is good, would the credit card changes in America be followed here?
_________________
what i posted is just my personal view. feel free to disagree.

[redbean]

High Pay who pays

The Diary of a Singaporean Mind has a pretty meaty article on the issue of high pay by the bank robbers in America and did a little correlations with the high pay in the Singapore context. I quoted a small extract of his quote:

Kenneth Feinberg[Link] is Obama's "pay czar". After the US govt bailed out major banks, Fienberg was appointed to make sure bankers don't go back to their old bad habits of paying themselves tens of millions given the outrage among the general public for the bailout. Yesterday Fienberg appeared on CNBC because Maria Bartiromo was doing a segment on Wells Fargo executives wanting to double their own pay. Because Wells Fargo had already returned the TARP money, Feinberg has no juristriction over them and can't do anything about it - all he could do was give his opinion on the matter.

This was what he said. Very often bankers would come to him to authorise fat bonuses or pay hikes saying that the executive is "especially talented" or he might be poached up by a foreign bank. He would ask for proof this "talent" and in every single case he found the person replaceable without loss to the company. It was mostly, in his own words,"spin" - bankers over the years have been very creative at manufacturing justifications for their high salaries even as they were about to cause a lot of economic pain to the rest of the population through their careless lending. Buffett asked why the CEO pay has gone from 50 times the lowest paid worker in the company in the 1950s to 500 then to 5000 times - is the CEO today 100 times more productive today? Not possible.

The low down people must never ignore this issue of high pay. It comes from everyone's pocket. The banks are not paying the bankers. It is the ordinary folks. The high pay checks of the banks must come from more profits and this will be squeezed all the way down to the people in the street who thought they have nothing to do with it. But they do. Everything will be more costly, services and goods, to keep the robbers fed. Banks cannot feed the robbers with 1 or 2% interest rates. They must schemed all kinds of toxic instruments to muster enough money to pay themselves. At the worst, they will cook the books, hide the losses until it cannot be hidden anymore. It is so easy to churn the books from loss making to profit making, like Greeece.

And oh, most of the major banks were in the same boat. That's how they got busted and needed public fund to write off their debts. The immediate turnaround to profitability in the hundreds of billions is fiction. Something fishy must be going on inside those bank books.
_________________
what i posted is just my personal view. feel free to disagree.

[redbean]

A little window dressing not going to work

The few changes in housing policy are not going to make any difference. The target of 30% of the buyers household income is fixed and viewed as affordable and reasonable to take. No need to bother about cost of construction, no need to bother about the risk that the buyers will be exposed to. In such cases, the bigger the income the bigger the stone mill hanging on the neck. And when a crisis comes, the bigger the income/stone mill, the bigger the losses and pain. We have got through that many times.

Preventing people from buying what the people think is affordable to them, and dictating what is affordable to the people is another mean policy like the mean testing in hospital admissions. The govt decides on what the people should spend as reasonable and affordable. The people cannot decide what is prudent for themselves.

And like the deaf frog, no need to listen, just move on, bring it higher for the good of the people.
_________________
what i posted is just my personal view. feel free to disagree.

[redbean]

Buffer stock for HDB

Today's ST editorial suggested that HDB build a buffer stock to meet contigency demands of flat buyers. I hope no one is going to reply that once there was a 30,000 stock of unsold flats and very costly. And I hope that no one would comment that last year they sold so few flats and sufferred a deficit of $2b, so if sell more and build buffer stocks, the deficit will be even greater.

The idea of a small buffer stock is elementary, and no one needs to teach super talents about this. It is only whether there is an intent to want to do it. Who doesn't know that having a small surplus will shorten the waiting time and become very handy and expedient for those who need flats urgently?

Like I said earlier, there are many things that can be done to help the people who need flats urgently. The current system is shitty at best.
_________________
what i posted is just my personal view. feel free to disagree.

[redbean]

Day of reckoning

In 50 years or 30 years time, if you are still alive, many Singaporeans will start to cry. Because in that time frame, many of the HDB properties will have less than 50 years of lease left. And some may have lesser.

And the million dollar properties will not be worth a million anymore, and may not even be worth half of it. That is the reality when the day of reckoning comes. There is no running away from it.

Today, many are trying to make hay while the sun shines. Profit can be made by short term flipping. In the long term, the HDB properties are going to worth nothing. Yes, $0!

Don’t be mad to plough in your millions. At $500k, with interest of 30 years, it is going to cost $1m for nothing at the end of the story. And this applies to all 99 year leasehold properties. The $1m condo is going to cost $2m and will come to nothing too.

It cannot keep going up. It must come down to ground zero!

Only freehold or 999 years properties will retain their values.
_________________
what i posted is just my personal view. feel free to disagree.

[redbean]

A system of crooks

Jonathan Weil wrote an article for Bloomberg in New York and is reposted in mypaper today. His main gist is that the robber bankers are blaming short selling for the ruins in the financial system and banks under their charge. Actually he said it is more than just short selling.

He added, 'Neither short sellers nor rumours spread by speculators were to blame for any of these companies' collapses. Bogus balance sheets and incompetent regulators were, along with the panic that ensued once investors decided that they couldn't deny the reality any longer.'

I want to add that it is the whole financial and trading systems developed by the geniuses trained by the best American Unis that is at fault. The Americans are awared now that derivatives is a deadly instrument and must be curbed. The SEC Chairman is asking for more measures to control derivative tradings and undisclosed deals. Her feelings are echoed in the big cities of Europe.

Derivative tradings, short sellings, programme tradings, big fund and big muscles, are all part of a flawed system that is out there to cheat the small investors. And with regulators closing an eye, deregulations, or becoming participants to the scam, indulging in dark trades and providing a system that facilitates the big funds to rob the small investors, what can one expect?

The financial crisis is only the tip of an iceberg and an early warning. The collapse of the world financial system is imminent if nothing is done to stop the robbers from what they are doing. Just ask, who is running all these banking and financial institutions into ruins, turning them into a big casino and con game?

The Americans are pulling the rug from the feet of the robbers. But the silly Asian bourses are still dancing to the tune as if nothing has happened and nothing will happen. The derivatives and default swap deals and dark deals may be banned from the US and maybe Europe soon. But they will be welcomed blindly by their Asian counterparts. And the crooks will be welcomed with open arms to do what they were doing best in Asia, once they are banned from the US and Europe.

Actually their tentacles are already in Asia and robber the investors of every penny they got left.
_________________
what i posted is just my personal view. feel free to disagree.

[redbean]

The lure of hot money and big funds

We welcome hot money and big funds into our market. In fact the mention of such items will send saliva dripping down the corners of our mouths. Hot money and big funds mean a lot of money to be made and a more vibrant economy.

Why then are countries getting the shivers when there are too much hot money and big funds pouring in? Why then is IMF talking about change and applying more controls on such hot money and the activities of big funds?

There are two sides of the coin. The hot money and big funds will benefit the developers and speculators in properties and in stocks. In the case of properties, they will buy up everything they could for profits of course. Who pays for their profits? Anyone loses out? When someone is making tons of money, someone else must be paying for it. The whole thing will spiral down to the little guys who will find the roof over their heads getting costlier and beyond their reach. The big guys will all be laughing to the banks and having their parties.

In the case of stocks, the big funds are making millions and billions at the expense of the small guys. Yes 1 or 2 may make some money, but the big picture is a sorry state of affairs. Just like listing of foreign stocks, when they grabbed the money and run, leaving a shell for the local investors. The Stock Exchange may be happy earning the $600 clearing fee per trade and add a few millions to its bottom line. Contrast this to the billions of profits that the big funds are wiping from the market and sending the small investors to the laundry. The net sum gain or loss is frightening and negative to the country as a whole. Is it worth it? Earning a few penny and losing billions in the process?

Would anyone bother to look at the big picture? Would a few privilege ones making a few millions be enough justification for the majority losing their billions? The hot money and big funds are here to make a quick buck from the locals, and leave the carnage behind when they depart.

Maybe the IMF is crazy. Maybe those countries that shunned hot money and big funds are stupid. Maybe we are smarter
_________________
what i posted is just my personal view. feel free to disagree.