For the record — “SMRT posted S$37 million in net profit for the three months ended Dec 31, a 13.9 per cent decline from S$43 million in the corresponding period a year ago, even as revenue rose 10 per cent to S$268.2 million.
The increase in turnover was driven by higher train and bus ridership, higher taxi rental revenue, as well as higher rental and advertising revenue, the SMRT said. But costs surged due to higher headcount after the opening of Circle Line stages 4 and 5 and increased train runs as well as higher energy prices.” Quote from Today.

According to this, LKY’s annual salary in 1970 was $42,000 a year. The value of my parents’ home was then $35,000  based on a neighbour’s transaction if I recollect correctly). So LKY could have bot the house and have $7,000 spare cash left over (17% of his annual salary).

His son now gets under the revised salary scheme a yearly salarly of $2.2m (assuming he gets his bonuses). My parents’ house now is valued at $1.5m (based on a neighbour’s 2010 transaction). The PM can buy the house and still have $700,000 in his pocket (32% of his salary). And this after a 36% pay cut. At his 2010 salary, he could have bot the house and have $1.5m (50% of salary) spare change.

Bottom line: LKY had a bad deal relative to that his son gave himself, and the one he has now accepted.  Even taking into account inflation, our PM is earning much more than his dad. In fact, the PM’s pay rose a lot more than the sum of the inflation rate, and rate of the appreciation of the terrace house’s value.

And unlike dad, who allowed ministers to earn more than he did, our PM is the top earner in the cabinet.

On how much David Marshall was earning (see this), I’ve been told that he could be wrong to claim he was getting $8,000 a month when he was Chief Minister in the late 1950s. When he gave the interview that mentioned that figure, he made several mistakes that were corrected before publication. This could have been one mistake that went uncorrected.

Will keep readers informed as this $8,000 figure had been widely (and unthinkingly) used to beat up the PAP: bunch of greedy pigs. As I’ve tried to show, it “proves”, if anything, PAP ministers are grossly underpaid using Marshall’s numbers. Juz as today’s example ‘proves” that our PM is overpaid.

My wider point is that numbers can be manipulated to support any view. There is no “truth” in numbers per se.

Finally, maybe Marshall was not mistaken over his $8,000 monthly salary because LKY was earning $3,500 in 1970. When he came into power in 1959, he slashed civil servants’ and ministers’ salaries by about half. And given the economic and political problems of the 1960s, he might not have dared to give himself a raise.

For that thank the Communists and their fellow leftists. They kept LKY on the straight and narrow,’cause he knew their power to cause trouble. If they were unhappy, they got protestors onto the streets, not mobilise anonymous grumblers on the Internet.

Finally on the performance bonuses.  The way the bonus scheme  is drawn up, esp how easy it is to achieve the targets (see here somewhere),  reminds me of the Caucus-race in Alice in Wonderland (a favourite book). This was a race where the runners all started in different positions, ran for as long as they liked and stopped in different places. Then everyone got a prize.

Extract from BBC Economics blogger, Stephanie Flanders:  

Iranian oil

All the mainstream forecasts for global growth in 2012 assume a flat or falling price of oil. Last year’s updated IMF forecasts, for example, assume the average price of oil falls from around $105 per barrel last year to $100 in 2012 and $95 in 2013.

For the UK, you’ll remember the likely fall in inflation (helped by stable or falling oil prices) was one of my biggest “reasons to be cheerful” in 2012.

US and EU sanctions on Iran could well mess with these hopes, especially if Iran decides to cut oil shipments well before the EU sanctions formally come into force. In the past few weeks, Iran’s leaders – and its parliament – have been talking about doing precisely that.

Iran exported roughly 2.2 million barrels of crude per day in 2010, equivalent to around 2.5% of global demand. A good chunk of that oil went to Europe, unfortunately quite a lot of it to the countries in crisis. Around 15% of the oil imported by Spain, Greece and Italy comes from Iran.

The oil price has crept up in recent weeks, but if you want to insure yourself against a major price spike later in 2012, you can do it very cheaply. The market just doesn’t think it’s very likely.

There are lots of sensible reasons for traders to be relaxed. Saudi Arabia has pledged to increase its production, if necessary, to keep the oil price stable; the US financial sanctions, which would make it very difficult for Iran to get paid for its oil, have quite a lot of flexibility built into them; and the EU sanctions are likely to be phased in.

And yet, this is the oil market we are talking about. And Iran. Neither exactly has a reputation for stability, or predictability.

Senior Israeli politicians at Davos were suggesting privately that there was a one in three chance of some form of violent confrontation with Iran this year.

Of course, Israel has an interest in talking up the threat posed by Iran. But the noises coming out of Tehran are not exactly reassuring. You have to wonder whether the rest of the world – including traders in oil futures – is taking it seriously enough.

(Background: Metro was founded in 1957 as a department store operator and became a household name. It diversified into property development in the 1990s and was one of the early investors in China’s real estate market, thereby missing the bullet of being a retailer here.)

It has since built up a portfolio of prime commercial properties in Tier-1 cities in Shanghai, Beijing and Guangzhou, as well as several property projects and joint ventures in Tier-2 and Tier-3 cities. Key properties that the group owns include Metro City and EC Mall in Beijing, Metro City and Metro Tower in Shanghai and GIE Tower in Guangzhou.

Leveraging on the group’s retail experience, Metro has chalked up an impressive track record as a mall operator and investor in China. To date, all its property ventures have been profitable, with past divestments making gains of 5-25 per cent premium over book value.

Over the past five years, shareholders’ equity compounded at a CAGR of 9 per cent. This was achieved without the use of excessive leverage given management’s conservative style. Its strong balance sheet (net cash of 36 cents) allows it to deploy capital opportunistically. The ability to recycle capital and profits into new projects has been a hallmark of Metro’s management.

The company is in the midst of selling its 50 per cent stake in Metro City Beijing for 1.25 billion yuan (S$247.5 million), a 50 per cent premium over its latest valuation. Should the deal go through, Metro will be able to book a pretax profit of $87.4 million. We estimate this will lift book NAV by nine cents/share.

On our estimates, the stock has an RNAV of $1.02 billion, or $1.23/share, after netting out liabilities. At current price, the stock is trading at a steep discount of 45 per cent to RNAV. Our target price for the stock is $0.86, based on a 30 per cent discount to RNAV.

SPP

Juz before the hols, I was told by a reliable source that Mrs Chiam had said that the coming party conference would be a “non event”. Some non event:

– two men that were expected to lead the SPP post Chiam said they were no longer interested in being on the central executive committee (Mrs Chiam was blamed for their lost of interest); then

– six central executive members (including the above two) resigned from the party juz before the conference with one saying “that one or two key CEC members are not willing (to accommodate) a complete change over for collective leadership and accountability, and that being the case, my presence in the party will not add credible value.”

For jet-setters (like one DYadav) and planet hoppers who were away, read here and here.

Desmond Lim (remember him) was one happy man this hols, people who know him tell me. Remember he had a bad 2011 initially, being slimed by Mrs Chiam as lacking the “X” factor to succeed Chiam and hence the trouble he was giving the Chiams, then losing his deposit in the May GE. Well with the failure of the party to retain Potong Pasir and to renew itself, and the unhappiness of long serving stalwarts and newbie ex-scholars all becoming public before the hols, he feels vindicated in opposing the Chiams in 2010 and 2011. I hope he gambled big time before the Year of Rabbit ended as his luck certainly did improve.

WP

No need to say anything abt Yaw because he said “IF it is rumours …”, the other lady said, ““I hope you will not identify me or the other woman involved,”, his wife withdrew her Facebook comments about irresponsaible journalim, WP’s Low Thia Kiang said”You said yourself that these are rumours, why are you still asking me?”, and deputy treasurer of the WP, a Mr Png, said: “We have to think carefully about our response”.

They shld realise that their comments collectively give the game away. Why so stupid leh, WP Sec-Gen, members and Mrs Yaw?

All I will report is that WP high command and those who should be in the know are saying nothing in private to friendly, influential outsiders (including prominent bloggers: I’m neither a friend nor influential) or “lesser mortals” WP supporters. As they are also saying nothing in public, I conclude that the WP’s attitude is, “Your problem Yaw. You solve it”.

Problem for the WP is that the silence implies that there is a problem that Yaw has to resolve, whatever it is.

But if Yaw is the dad of a bastard (albeit a Dragon), the WP can’t escape collateral damage. He was possibly the most trusted lieutenant of Sec-Gen Low, and if he was as rampant a stag as alleged by TRE, it casts doubt on Low’s judgement. And if Low didn’t know that his Kim Jong-il look-a-like aide was as horny a stag as alleged, it shows the lack of his of intel on members.

NSP

The old guard can’t believe that the newbies are fighting among themselves and with the old guard.

Hazel Poa (Sec-Gen) and her hubbie Tony and other newbies are spitting mad at Jeannette Chong-Aruldoss (VP) who has the support of the people’s celebrity, Nicole Seah. Ms Chong is refusing (and has refused for over six months) to declare her personal wealth. (Reminder: she is hot-shot corporate and shipping lawyer, or so it is claimed. Detractors say it is a two partners and no slaves, legal assistants, firm).

All central executive members have to submit this declaration to the government in order to get the licence for NSP’s newsletter renewed.

Why she refuses to give this declaration or step down, and why Nicole Seah is supporting her is a matter of speculation. One mean spirited view is that she and Nicole realise that moving to NSP was a big mistake and they want to jump ship again. If they leave when Tan Jee Say sets up his party (the two gals got crush on him, it is alleged), there is a danger that they will be perceived as serial, air head rats: first KennethJ, then Goh Meng Seng. If NSP was in disarray, they could excuse their leaving by blaming the NSP mess.

The old guard kicked out one Goh Meng Seng for failing to deliver a breakthrough. He got his revenge. The newbies he brought in are fighting each other and the Malay Bureau (his creation) and the old guard. Want to destroy an organisation, give GMS an executive role: juz kidding.

TJS

Glad to read in ST confirmation of a story I heard: he is pursuing the shared resource centre for the Opposition that he was thinking about before the last general election.

As he is turning 58 soon, why is he working so hard? “Relax. Watching over yr daughters and making sure they hook rich China men and is hard work. Do it well, and can be richer than Peter Lim”.

But seeing that that Dynamic NSP Duo (Hazel and Tony) are helping him recruit people for the centre, does it mean that he is giving Jeannette Chong and Nicole Seah, the brush off? Scholars like the company of other scholars, not pretty air heads who are serial hoppers? Will hope to find out more in the next week of feasting, dicing and Black Jack. No, dicing is not Roulette, it’s Backgammon.

SDP

Michelle Lee is expected to leave SDP soon even if TJS doesn’t set up up a new party for her to join. She didn’t join other SDP members in CNY Chinatown walkabout. She joined the SPP, NSP, RP and TJS in their Ang Moh Kio walkabout which SDP officially declared it wouldn’t join (Danny, the teh tarik bear, doesn’t like competition from Nicole, the people’s princess? Hey Danny, you are cuddily and furry but not sexy enough for boys to fantasise having sex with), clashed with its long planned Chinatown walkabout.

Others

KennethJ is rumoured to be looking for a job in financial services. No surprises there as he was a hedgie and hasn’t been working for a few years, dedicating his time and efforts to politics and keeping dad’s memory alive. What is surprising is that he is rumoured to be looking for a London-based job. Trying to make a graceful exit? Whither RP, which dad founded? RIP both RP and KennetJ’s political ambitions?

And finally, how can I forget Goh Meng Seng? He after all has many, many enemies saying nasty things about him. The least nasty is that he is desperately waiting for a phone call from Lina Chiam who has said SPP “will continue to seek new passionate and talented individuals with the right aptitude and who will pursue the opposition cause cohesively.” His enemies say he has told Lina that he is willing to be co-opted into SPP mgt committee. Err wonder if Lina thinks he has the X factors she is seeking? Somehow looking at his CV, I doubt she would. Anyway, SPP’s loss is TOC’s gain, or is it bane? If he joins SPP, he would have to resign from Team TOC. The Chinese section of TOC that he founded to large self-publicity seems kinda quiet.

Taz all folks. An update next week. One more week of feasting and gambling. Take care, drink or drive, not both.

After the 2011 presidential election, in which Tan Jee Say came in a decent third, he made the following points (to mask his second defeat in three months, remember he RI boy and RI boys not supposed to be serial losers, and make himself feel and look good?)

– More people voted for him than for the WP in the May general election (Actually it was even better than that as I wrote recently in TJS’s voice, ”someone with 25% of voters behind me (5% more people voted for me than for the WP, and NSP combined and that the combined votes of all the opposition parties was only 40% more than the people who voted for me”): QED he was more popular than WP. Plausible, I tot.

– That many of his supporters would have likely spoiled their votes. This I found a bit rich: 25% of S’porean voters spoiling their votes? Come on pull the other leg. Even 5% would be 4% too many.

Anyway, I tot of  what he said about his popularity and his supporters when reading this recently from in Economist blog: The idea that political behaviour is expressive rather than instrumental—that we vote not to maximise the chances that our policy preferences will be implemented by government, but instead to send a message to ourselves and others about who we are, and what we care about—is meant to overcome a number of flaws in simple economistic accounts of voting … What message, then, does a vote for Newt Gingrich express? What message is so compelling that South Carolina voters were willing to overlook Mr Gingrich’s overwhelming liabilities as a candidate? “We think open marriages are great!”? “We love corrupt Washington insiders”? I guess not. Saturday’s expressive message, I think, comes down to this: “We’re not going down without a fight!

Translated into S’pore politics, could it be the 25% of S’poreans who voted for him, voted not because he was TJS but because he was perceived as the candidate that the PAP and government would have least preferred? If he did not stand, they would have voted for one Tan Kin Lian, who lost his deposit when TJS stood? Nothing to do who TJS is, but everything to do with his perceived anti-PAP and - govmin credentials?

So if he forms a new party, he and his alleged fan gal club (allegedly Jeannette Chong, Nicole Seah and Michelle Lee), may be surprised to discover that the 25% of the popular vote for presidential candidate TJS doesn’t translate into support for their new party (even with gal sepport). These voters have other ways of sending a message to themselves and others about who they are, and what they care about: They can vote WP or SDP.

Juz read this (11 am): He is setting up the the shared resource centre for the Opposition that he was thinking about before the last general election. Gd for him. Gd, astute tactical move. He can use this to research if he has the support needed to set up a new and credible political party. All the best.

(BTW, “The Singet Not the Song” was the title of a 1961 very forgetable British film about a priest and a gay attracted to him but not to his message. Priest was a Roman Catholic.)

– Mobile App Creation

– Web Development

– Blogging

– Data Analysis

– Coding

– Networking

 http://financialedge.investopedia.com/financial-edge/0112/6-High-Value-Skills-That-Will-Supplement-Your-Career.aspx?partner=ntu12#ixzz1kRwHMs00

So what contributed to the recent decoupling of Singapore and Hong Kong home prices?

The simple answer is mortgage rates.

Driven by strong loan growth and rising loan-to-deposit ratios, Hong Kong banks have raised their mortgage rate spreads since early this year [2011]. This has resulted in higher mortgage rates and reduced demand for residential properties, which in turn led to the slide in private home prices since September.

On the other hand, the Government’s property cooling efforts have so far been thwarted by very low mortgage rates. With base interest rates remaining near record lows and Singapore banks charging very low mortgage spreads, affordability remains high.

However, there is a risk that Singapore mortgage rates would rise next year from their current low levels. Like their Hong Kong peers, Singapore banks have also experienced strong loan growth over the past year, which in turn has pushed up their loan-to-deposit ratios – although it must be said that ratios in Singapore dollars are generally still low.

Moreover, with the debt crisis that is plaguing the European Union, there has been anecdotal evidence that some European banks are pulling back their credit lines in Singapore to help boost capital ratios as required by the EU debt plan. If these banks continue to deleverage, it could result in less competition in the lending market for Singapore banks, which may then feel comfortable enough to raise their lending spreads, including mortgage spreads.

In fact, during the 2008/2009 global financial crisis, local banks such as UOB and OCBC were able to increase their net interest margins as foreign banks reduced their lending activities in Singapore.

Thus, while the recent decoupling in Singapore and Hong Kong residential property prices may make for an interesting read, we do not expect it to last for long, especially with the latest round of cooling measures introduced in Singapore.

http://www.todayonline.com/Commentary/EDC111223-0000039/A-tale-of-two-cities

Should happen as this UBS analyst postulated in late Dec 2011. But if the government thinks property prices will tank, not juz fall a little, the local banks will “do the right thing” by home owners, but not investors. It has happened before. In the crisis in the mid 80s, when many home owners had negative equity, the banks “did the right thing” and did not ask for more equity. Home owners had gd reason to vote PAP.  

Although what the PAP is doing is observable to the Opposition parties and their fellow travellers on the Internet, they seem blind or indifferent to the PAP’s actions, or both, because of their assumptions and prejudices. Worse, the major Opposition parties are complacent, what with the problems at WP, NSP and SPP (More of this on Monday in a CNY Special — gossip I heard while feasting and gambling).

Two Sundays ago, (as part of his ang pow strategy?) PM promised that, despite the economy slowing down, the government would improve the education and public transport systems, and build more homes so that young couples can start their families. These remarks were made at a Lunar New Year event  in his Teck Ghee constituency, part of the Ang Mo Kio GRC. He also officiated at the re-opening of a wet market and food centre where he said more of such markets will be built over the next few years, with the aim of keeping food prices affordable. Not longnago, such markets were being to a commercial company which promptly increased rentals. He said nothing then. And the HDB and Comrade Mah gave grumblers the finger.

Then last Saturday in his CNY message he said Having children is ultimately a personal decision for families to make, but Government will do its part to reduce the anxieties and burdens of parenthood. Baby Bonuses already help families with the costs of raising children. We are also doing more to help parents balance work and parent­hood, including extending maternity and childcare leave, and encouraging companies to offer flexible working arrangements for employees with children. We are committed to helping young couples obtain their first HDB flat as soon as possible. With government support, childcare has become more affordable, and childcare centres are expanding and providing many more places than before. The critical factor now is not more financial incentives, but creating the supportive social climate and attitudes that will encourage couples to have more children.

This presses so many “hot” buttons: freedom to choose to have babies, social environment, financial help in raising children and affordable housing for the young.

What with the building of more public  flats (despite the slowndown, and possible recession, Comrade Mah must be rolling his eyes in disbelief) and now taking a serious attitude towards other issues that upset voters (transport, education and the rising cost of living and the cost of raising a family, social and monetary, it looks like the government and the PAP have learnt the lesson that “It’s the voters, stupid”.

In the past, we would be told to tighten our belts to survive the slowdown. But given the still high levels, by global standards, of ministerial pay, and Grace Fu’s bitching about her pay cut, it would not be politic to tell S’poreans to lower their expectations. Better to follow the Roman emperors who made sure the populace of Rome had plenty of bread and circuses (gladitorial games). And S’pore has the money, despite what the SDP and Goh Meng Seng say. Even SDP’s most famous ex-member says so. To TJS, S$60bn from the reserves is “small change”. So does Citi, an investment bank**.

Even as late as November, I wasn’t too sure if the PAP and government had learnt the lessom of the May and August elections. In November, newbie PAP acting junior minister (and ex army brigader) was leading raids on foreign workers quarters. Judging from his remarks on Facebook, I assumed he wanted to see if the quarters were fit for human habitation, not whether there were illegal FT workers.

I was thinking to myself, he had better focus on the latter, given that the PAP is perceived by many true blue S’poreans as the “Pro Alien Party” and that the PAP should learn from the HK experience.

The once popular pro-democracy Civic Party suffered a series of defeats in neighborhood council elections in October last year in HK, as pro-Beijing politicians successfully tapped anti-immigrant sentiment as well as public hostility toward environmental measures perceived as harming employment and increasing the government’s construction costs.

The Civic Party had been gaining ground in previous elections, but ran into trouble this year as lawyers who are prominent in the party took on social and environmental causes that were unpopular among many Hong Kong residents. The most divisive issue has been whether more than 200,000 household workers, mostly from the Philippines and Indonesia, can eventually become eligible for citizenship.

The government and governing PAP is focusing on issues that affect the lives of ordinary S’poreans, shumething the Opposition parties especially the SDP have done for a long time. I hope bleeding heart liberals (especially those writing on or reading blogs like TOC) understand why. There are no votes (and eyeballs) to be won in helping foreigners, convicted criminals and dolphins.

Charity begins at home. Or to put it more nicely, “Conserve compassion: S’poreans come first, second and last”.

Build more homes, improve education and public transport, and keep the cost-of-living from rising too fast; and we shall see that the following comment by Catherine Lim is nothing but liberal, anti-PAP, bourgeois, elitist wishful thinking, “”PAP fatigue” among Singaporeans that is a result of PAP’s lack of nurturing Singaporeans politically, and failing to provide the proper environment for political education and growth.”

And who will care then if ministers pay themselves millions of dollars. I mean even the WP’s “base’ ministerial salary is $852,500 versus the PAP’s $1.1m. Waz 25%? The voters know that if the WP becomes part of the government, they will take the difference and keep quiet. I mean I don’t hear the WP MPs offering to take S$11,000 each, and publicly donating the balance to a charity.

One way the PAP and government can go wrong is that the PAP and govmin don’t do “circuses”. They don’t know how to spend tax-payers’ monies entertaining voters.

The other way is that they love FTs too much, thereby negating the message they are trying to send S’poreans that “S’poreans matter”. We are always hearing that less FTs, less propsperity from the local MSM, quoting alll manner of ministers, officials and “experts”, usually from local universities (esp from SMU) and broking houeses. The latest is variation on the theme that FTs are good for S’pore: yesterday, ST reported an economist from Merrill Lynch, an investment bank, as saying, “Part of the reason for the sticky inflation is that policies such as the tightening of the inflow of foreign workers are keeping wage costs high. These are being passed onto the consumer.” Knowing the reputation of the economist in question, ST most probably left out the other factors he cited, focusing on FT shortage.

FT love also means that the measures to cut back FTs will be not be serious, and enforced lightly, annoying S’poreans.

So there is al to fight for. The PAP’s continued decline is not assured, neither is its revival.

——–

*In a report dated December 2011, Citi said meeting higher expenditure needs without running a fiscal deficit will not be a problem for Singapore’s government. While the fiscal surplus may shrink, its economist estimates that the government can draw on an additional $1-3 billion in net investment returns, without breaching the 50% cap on the amount of long-term expected real returns on reserves.

In the text of the story, it said “the top 20 per cent … were hit by … rate of 5.7 per cent — much higher than the 4.7 per cent for the bottom 20 per cent”.

(ST’s Breaking News reported, “The lowest 20 per cent income group experienced a lower increase in consumer prices at 4.7 per cent, compared to the middle 60 per cent and highest 20 per cent income groups, which experienced CPI inflation of 5.1 per cent and 5.7 per cent respectively.”)

The editors and the two reporters Aaron Low (Econs correspondent) and Melissa Tan obviously don’t know their maths.

Say a poor S’porean is earning $12,000 a year: a 4.7%  inflation rate means he had $564 less to spend in the year on other things. For a rich S’porean earning $600,000, he has $34,200 less to spend.

Whose standard of living or savings rate is affected more? Obviously the poor S’porean, yet ST blithely writes, “Well-off bear biggest brunt of the price increases”.

What can I say?