Property prices: Going against natural laws

MM was quoted in late 2009 as saying, “If the country is going to go down, then economy will go down, people’s incomes will be down, unemployment will be up, then property values will go down.”

He was wrong because we had a recession, but property prices rose  . Specifically in a recession year, prices of HDB resale flats rose by 8.2%.

Mah Bow Tan should boast of what must be first for public housing in any country, “We ensure public housing prices go up even in a recession.”

And adding, “So when economy does 15%, of course, HDB rices will fly. Only the daft will expect HDB prices to stabilise or go down.”

“Vote PAP. Public housing values will always go up,” he should say.

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Starhill Reit: DBS likes it

Healthy financials: Gearing remains healthy at 30.2 per cent, well below the optimum level of 45 per cent. With no major refinancing needs till 2013, the group is in good financial position to make further acquisitions.

We maintain our ‘buy’ call, TP of $0.73. The improving office outlook and stabilised retail market should lead to further improvement in its Singapore portfolio that represents 60 per cent of its total revenue. We see relative value in SGReit with the stock trading at 0.7x P/BV and offering forward FY2011-2012 yields of about 6.9-7.3 per cent.

PAP candidates: 16.7% casuality rate already

Wonder waz  so gd abt the PAP selection candidate selection ptocess when 16.7% or four out the 24 initial candidates have proven themselves to be hollow even before the fighting begins?.

The PAP-produced videos of Kate Spade Tin allowed me to see for myself the shallowness her views. Worse, set her beside NSP Nicole, and she looks and sounds pathetic and inmature. Readers will know I’m no fan of the NSP but when I saw the clip of Nicole talking abt why she became a do-gooder, I was impressed. And the NSP doesn’t have the resources of the PAP in scouting for and attracting talent.

Then there is Puthu who equates saving babies with doing NS, insulting doctors who have done NS and saved lives or treated patients. Contrast him with WP Chen who did his NS when he was under no obligation to do so.  He respected the institution of NS.

Next is Ms Foo who couldn’t handle a question about her country of birth, Malaysia.

And finally there is Steve Tan who told reporters that he denies any allegations about him that they have heard. The funny thing is that he had assumed the reporters had heard nasty things about him. I know at least one reporter from a foreign publication who did not know the stories about him, but who soon found out. He couldn’t handle the situation.

Oh and how come the PAP system of selection did not discover that he had “issues” that would not look gd for him and the PAP if they became public.

The PAP is starting to resemble F Troop, the dysfunctional cavalry unit in  a satirical American television comedy series, what with a casualty rate of 16.7% before any serious fighting breaks out.

Remember, what a pillar of the establishment, Ngiam Tong Dow said in 2003, “At the first sign of a grassroots revolt, they [the incumbent elite] will probably collapse just like the incumbent Progressive Party to the left-wing PAP onslaught in the late 1950s. “

Apple has more cash than GIC & Temask combined

According to Asymco: “If Apple had no revenues, the current cash would sustain operations (SG&A and R&D) for over 7 years or until the middle of 2018.”

“The funds are big enough to place Apple’s CFO office in the top 100 largest fund managers in the world and larger than any hedge fund manager.” More than Temasek and GIC combined, FYI.

NOL’s next CEO is a retired general

Ron Widdows, a shipping veteran, who is the CEO of Neptune Orient Lines Group, will be replaced by ex-defence chief Ng Yat Chung when the former retires at the end of this year. Mr Widdows will stay on as senior adviser and Mr Ng will take over as CEO on I January 2012.

Ng is presently a senior MD at Temasek.

Wonder what relevant experience he brings to the shipping co? I can only think of the experience in a managing big complex organisation. But then I couldn’t think of any reason for his becoming a senior MD at Temasek.

Q&A with Warren Buffett

He answers questions from MBA students. Worth a read. Some gd questions.

http://blogs.rhsmith.umd.edu/davidkass/uncategorized/warren-buffetts-qa-with-university-of-maryland-mba-students-march-11-2011/

Citizens and PRs at fab plant: Juz ask the company?

The Prime Minister Lee Hsien Loong said that without foreign workers, Singapore would not have attracted S$3.7 billion in wafer fab investment as well as created more jobs for Singaporeans.

According to the statistics quoted, the IM Flash Singapore Nand Flash Wafer Fab currently employs 1,200 workers, of which six in 10 are Singaporean residents: a term that covers citizens and permanent residents.

The blogsphere is abuzz with speculation that there are more PRs than S’poreans in the ratio.  If it were otherwise, surely he would say so, they argue. Sumething in that, I have to admit.

Why doesn’t someone write to the company and ask for these details? Ideally our “constructive, nation-building” should do the asking on this matter of public interest?

The company may refuse to give the data, fuelling suspicions further but at least it cannot hide under the excuse that it does not have the data.  

On the national level, that is the excuse. A few years ago, in answer to a parliamentary question, the then Minister of Manpower, Ng Eng Hean, said that MOM data collection methods could not distinguish between PRs and citizens, hence the use of the term “S’pore residents”.

Listen to Yoda, bloggers

My favourite bloggers are starting to get angry. Calm down please. As Yoda says,”Fear is the path to the dark side. Fear leads to anger. Anger leads to hate. Hate leads to suffering.”

There may be a lot to get angry about, but getting emotional is not the way to go. Remember the Emperor and Sith Lords derive much of their strength from the hatred of their enemies. Hence the importance to the Jedi of being unemotional.

Malay president: Forget it leh?

If the PM’s promise to make Zainul Abidin the next parliamentary speaker was meant to get the Malays in Aljunied GRC to vote for the PAP, it may backfire.

If Zainul, a candidate in Aljunied, gets re-elected and is then made speaker, then the Malays are likely to reason it is likely that the next president will not be a Malay. Not having a Malay president would displease the Malay community. The community believes that it is about time that the presidency is given to a Malay. Since independence, S’pore has had as President one Malay, two Indians, two Chinese and one Eurasian. Surely it must be the turn of a Malay is the reasoning.

Well by saying that he wants the next speaker, like the present speaker,  to be a Malay, is the PM signaling that the next president will not be a Malay? Given the racial mix, the offices of state have to spread out among the races.

So rather than a vote winner, the promise may get the Malays thinking that the stated public concerns by the government  about the loyalty of Malays to  S’pore is depriving the Malays of getting a Malay president now that the president has more than ceremonial duties. They may even go further and recall that the speaker’s job is largely ceremonial unless the Opposition wins 30-40 seats in the coming GE, an unlikely scenario.

If the PM was trying to play the “racial” card by making this promise, it would be ironical if the promise makes the Malays think long and hard about their role in a country ruled by the PAP.

Can we ever be rational abt money?

Seems not

And maybe taz why the PAP cannot convince that high salaries for ministers and senior civil servants are gd for the rest of us?

Chiam: The importance of EQ

When the SDA turned down KennethJ’s attempt (with the help of Chiam) to take over the SDA, I tot what a balls-up.  I didn’t think much of KennethJ’s attempt to takeover SDA (What experience did he have? He only had Daddy’s name). I was wondering what Chiam was up to , both in agreeing to KennethJ’s plan and in not sounding out the views of the other members SDA, before agreeing to support the plan.

But his refusal to get upset by KennethJ’s barbed comments about him, and continuing to extend the hand of friendship to KennethJ, showed he remained a gentleman, worthy to be called an elder statesman of the Opposition.

But still the outlook for his career as a politician looked bleak. And proposing his wife as candidate in Potong Pasir, didn’t seem a gd idea. Sounded like an attempt to keep the seat in the family.

Today, he seems to be on a roll. He has a credible team to contest Bishan-Toa Payoh and he tells us he has found a sponsor willing to donate $2m to fund a foundation. These are great achievements.

He has also added to his reputation as an elder statesman by saying publicly that there are no strings attached to the loan of candidates to RP. If the RP does well enough to get NCMP seats, the RP can choose the NCMPs.

Gamblers have a saying, “So long as the money does not run out, luck will follow”.

Chiam has shown that in politics, “So long as there is EQ, and steely determination all things are possible”, something that both KennethJ and Goh Meng Seng should take heed of.

KennethJ needs some tips on how to be a politician,  while Meng Seng needs reminding that playing “chicken” games and smashing his boots into faces are great ways to lose goodwill.

HSBC: 44% price rise?

HSBC shares may rise by at least 44% if it focuses on markets that generate higher returns according to an analyst at Investec Securities, Bloomberg reports.

HSBC could climb to about 950 pence a share if Gulliver commits to ensuring all businesses generate a return on equity exceeding 10 percent, Gareth Hunt, a banking analyst at Investec Securities in London, wrote in a note to investors today. The London-based bank needs to cut costs in the U.K., reallocate capital at its U.S. division and sell parts of the business that aren’t profitable enough, he wrote. Gulliver, who took over as CEO in January, will brief analysts on his plan for the bank on May 11.

WP: The problem with light blue

If you look at the photos (see last para for link), you could be forgiven for thinking that the WP candidates are wearing white shirts, and not light blue shirts. I commented on this to a friend who is not allied with any Opposition party, even though he has a social and civic conscience.

He explained to me that the lighting made the shirts appear white. It wasn’t, as I had joked, that the people in blue wanted to send a subtle signal that they were really men in white. It’s juz that light blue is a very subtle colour.

I hadn’t planned to blog on this but the pix accompanying this article gives the impression that only one person is wearing blue. Please WP do something about your backdrop, or wear shirts a darker shade of blue, like the lady at the corner is doing.

Don’t give people who wish you ill or the local MSM any opportunity to make fun of the WP.

(The article  mentioned in the first para where the accompanying photos “show” the people in blue wearing white. They are not. It’s the lighting.  For what is white, look at the CNA microphones. That is white.)

SGX: Things can only get worse

DBS lowered its target price from S$11.50 to S$10.50 while Deutsche Bank revised it from S$10.50 to S$9.50.

Credit Suisse said when maintaining its “Neutral” call, “The SGX lacks near-term organic catalysts and is also exposed to M&A risk after the failed ASX-SGX merger.” IIFL issued  a “Reduce” call on the stock and lowering its target price to S$7.40.

KennethJ: Dice not falling his way

 The game has yet to end and if RP and KennethJ manage to win West Coast GRC, the game will have taken yet another twist. And anyway, he deserves a few good dice throws. His luck has been bad recently. But so far the tale of KennethJ in politics is one that can be best described as “he-loo to ze-lo”.

After KennethJ seized control of RP from one of his father’s cronies, he was on a roll. He could explain economic issues in English that S’poreans could understand. He scored a public relations triumph when he came up with a document that explained what the RP was about. My friends in the WP and SDP were upset. They said they were saying these things long before KennethJ came on the scene. It didn’t help their tempers when I pointed out that they never put these things on a single sheet of paper, let alone a web page.

Thirdly, KennethJ managed to attract some pretty talented and passionate people to the party.

 And the few PR missteps (like unnecessarily sliming the ex-RP chairman) didn’t seem important.

 In an audacious move, he managed to persuade the Chiams that he was the one to lead the SDA in the coming GE. But unfortunately for him, the SDA was more than the Chiam’s SPP even though Chiam was the dominant figure in the SDA.

His reaction to the SDA rejection startled S’poreans. He lashed out at Mr Chiam, upsetting those S’poreans who respected Chiam. Fortunately for KennethJ, Chiam ignored the comments and soon KennethJ was talking to Chiam on the SPP and RP co-operating. Yet at the same time, he was threatening to contest a constituency that a SPP leader had staked out as his own. Where was his EQ?

Property values juz outside Hougang and Potong Pasir

If you are living in a PAP constituency and you are just a street or two away from Hougang and Potong Pasir, I hope you realise that the value of yr property is adversely affected by the non-redevelopment of Hougang and Potong Pasir.

Property is all about location and that includes the neighbourhood. So even though you dutifully vote PAP, made sure yr family and neighbours did the same, and your area gets redeveloped, the fact that Hougang and Potong Pasir are juz accross the street, or round the corner, affects adversely the value of yr property.

Don’t believe me, go ask any property agent from a reputable firm.

Sarawak’s lesson for the PAP

When the people are angry, being a cabinet minister will not save an elected legislator from losing his seat.

In the recent elections in Sarawak, the Deputy Chief Minister lost his seat to a rookie from the opposition DAP. His party, the SUPP, lost 12 of the  13 seats where its opponent was the DAP.  The vote showed M’sians how unhappy the Sarawakian Chinese were with the BN, the ruling coalition nationally and in the state.

In Singapore, the ministers that S’poreans heap on the most criticisms for the linked issues of immigration, low wage rises, sky-rocketing HDB prices, and crowded and expensive public transport are Wong Kang Seng, Lim Swee Say, Mah Bow Tan and Raymond Lim. These make three vulnerable GCS (the two Lims are in one GRC): Bishan-Tao Payoh, East Coast and Tampines.

Add Aljunied, and there are four GRCs where the Opposition are in with a sporting chance. Twenty seats in all can change hands

The question is are the voters angry enough with the PAP that they are willing to vote in the Opposition?

Hyflux: Qns to ask?

Why is Hyflux willing to pay out dividends of 6% per annum on the pref shares when it can borrow at 3.85% annum? This is a premium of 56%.

Is it lowering its debt to equity ratio from 75% to 25%, only to raise it again in the near future? If it does this would affect the risk premium of the preference share in future, thereby affecting its yield.

Six per cent is a gd rate but think of the risks which includes projects in the Middle East.

Gd reasons to continue avoiding S-Chips

SGX has mandated that S-Chips introduce new measures that could give them more control over their mainland-based legal representative or top executives.

But “constructive”, “nation-building” Today reports that there practical problems.

“If you don’t have the cooperation of the legal rep, then you might not be able to go through the whole procedure and then to effect the removal of the legal rep because you can foresee that the legal rep will not give full cooperation in helping you to remove himself,” said Mr Lin Song, co-head of international China practice group at law firm KhattarWong.

The lawyer was referring to the paperwork involved in effecting the removal of the Chinese-backed legal representative. Company transactions become binding only when they bear the firm’s corporate seal and the power to affix this seal is vested only in the legal representative.

“The issue is more on the execution level even though you might have in the articles of association all these provisions when you really need to remove the legal rep … you may face difficulty,” Mr Lin said.

“For example, the listed company might be required to present the local authority a stamp registration form and other documents which might require the legal rep to sign,” he added.

Mr Robson Lee, partner at Shook Lin & Bok LLP, echoed the same sentiment that the SGX ruling might not be enough to clip the wings of Chinese-backed executives.

Mr Lee, who also sits as a director for S-chip firm Youcan Food International, said there are practical enforcement difficulties to ensure compliance by the executive management that are based in China.

“It would be better to put in place the necessary legal provisions in the articles of association to give the board of the listed company the legal right to intervene when things go wrong,” he said.

Article

What are in our reserves? A revisit

As minister Mah has again talked rubbish, this time that cheaper HDB flats will raid our reserves, I tot I should paint a mental picture of how our reserves, CPF and SWFs are linked, and in the process show that he is talking rubbish when he talks of our reserves being raided, if HDB flats’ selling prices are lowered.

Visualise a big glass tank. Above it are three pipes, below it is one pipe. When the taps are open, water flows in from the pipes on top and water flows out from the pipe below.

The water flowing from the pipes at the top represent the income that goes into the Consolidated Fund (tank). From one pipe would flow income from all the taxes (income tax, VAT, property etc), service charges and fines levied. From another another pipe would flow the permitted returns from our reserves. From the final pipe would flow the money from government borrowings*. The money from the special CPF bonds would be part of the flow from this pipe. The water flowing out from the pipe below represents government spending.

There is no water in the tank when the outflow (expenditure) exceeds the inflow.

But there will be water in the tank if the inflow exceeds the outflow.

Now imagine a ballon hovering just above the water. It has a hose syphoning out water from the tank. The ballon is the reserves taking surplus $ from the Consolidated Account. The ballon has another hose sucking air into the ballon: this represents the proceeds of “sale of state land”. This shows that minister Mah is wrong in his assertion that cheaper HDB flats raid the reserves. All that happens is that less goes into the reserves. Is this a bad thing. I doubt it as we got lots of money in our reserves, Temasek’s 2009 losses notwithstanding. (Our SWFs managing only a part of our reserves have 179.5% more in assets than S’pore’s 2009 estimated GDP. I calculated this in November 2010.)

The ballon keeps growing while another hose pumps some of the water into the reserves pipe which flows into the tank.

And where is GIC and Temasek? They and the central bank manage what is in the ballon.

https://atans1.wordpress.com/2010/11/02/how-we-fund-our-swfs/

https://atans1.wordpress.com/2010/11/19/property-sales-also-fund-our-swfs/

—–

*Accounting for loans:

When any government or company or person borrows, the money borrowed becomes the income of the  borrower. So when the government borrows money from the CPF by using the special bonds, the money borrowed becomes part of government income.

The interest payments on the special CPF bonds and other borrowings are part of government expenditure.

GIC has a winner with Glencore

In Dec 2009, GIC and a few other investors (including BlackRock, Fidelity and a Rothschild) invested US$2.3bn in the convertible bonds of a then private Glencore. The convertibles put a value of US$35bn on Glencore, a trading co with a 34.5% in mining co ,Xstrata

Analysts now put the value of soon to be listed Glencore at between US$55-70bn.

If Glencore lists at the expected US$60bn, then the US42.3bn issue of convertible bonds will be worth US$4.3bn in Glencore shares.

Nice work GIC.

Returning to the past

Lucky Tan reminds that we have been here before. While the GRC helped to retain seats for the PAP …  If nothing was done, there was a good chance the PAP would lose a few GRCs in the 1991 elections. The PAP had 2 choices – fix their policies so that ordinary Singaporeans will benefit from them or tweak the system to retain their dominance. The PAP chose to do the later by linking votes to estate upgrading … sad to say their “kiasu” nature got the better of them and the % votes for the PAP went up after that.

Well we are back to 1991, and the PAP has the choice of listening or tweaking again, to avoid losing a few GRCs. It is clear from the PM that the PAP “don’t do listening”. NTUC minister’s “Deaf frogs” comment comes to mind.

So it’s tweaking the system again.  But what can it tweak? The PAP is still trying the upgrading approach. But I’m sure the PAP knows that this is not enough, so what else can it do? What is the 2011 equvalent of upgrading for PAP areas? 

I don’t think there is one major new tweak, but here are several tweaks that it can do.

Given the reserves that the PAP-managed town councils have built-up, the PAP could offer voters the carrot of lower maintenance charges. The town councils could even afford to pay part of the utility bills of poorer residents.

The excuse: allievating inflation pressures, is now a better use of town council reserves since inflation is so much higher than bank deposit rates.

The the government can increase welfare spending and use the PA to administer it.  

I’m sure that the combi of asset enhancement,, smaller bills for residents in PAP areas, and increased welfare spending via the PA will win the PAP the Kiasu votes, juz as asset enhancement in PAP areas did in 1991.

Life’s unfair

Rory McIlroy’s misfortune’s continued when he arrived in Kuala Lumpur without his clubs. He led the Masters by four shots before a final-day 80, is playing in this week’s Malaysian Open.

“Watchdog” barked without knowing the facts

 The president of the Securities Investors Association of Singapore has retracted his comments on Shanghai Asia Holdings’ (SAH’s) proposal to sell all of its businesses, which he earlier said was conducted in a manner that was unfair to minority shareholders.

He said his comments “were made without knowledge of the company’s announcement” last year, in which SAH stated that an extraordinary general meeting would be held for shareholders to raise questions, and vote on the deal. And that an independent financial adviser had been appointed to advise on the merits of the deal.

Oh dear,

PAP: The importance of the 67% mark

The PAP wants, as usual, an “overwhelming mandate”. In 2006, it didn’t get it, getting only 67% of the votes cast. The uptrend since the low of 61% in 1991 was broken decisively. The PAP had won 75% of the popular vote in 2001.

This underwhelming mandate of 67% was achieved despite a growing economy, a new PM and the usual election goodies.

Anything below 67% will indicate a gloomy future for the MIW. Remember this is the first election where the post-65ers are in the majority. The voting power of this group can only get stronger, and unless the PAP can win over more of these people, the PAP’s share of the popular vote can only decline.  The failure to do better than 67% is an indication that the PAP is just “treading” water with the post- 65ers.

If the PAP manages only 60 or 61%, then the PAP knows that it has failed to connect with the post-65ers, “Kate Spade” Tin’s and “Saving babies=NS” Puthu’s efforts notwithstanding.

 Janil Puthcheary can “cut and run” to another country where he can ‘defend” and “be fully invested in” in greater safety. After all he has only been a citizen here for two years. He seems to spend , on average, seven years in any one country. And he wants to persuade S’poreans that he is a stayer?

Too bad for “Kate Spade” Tin though. Bit difficulty to “cut and run” when hubby is senior aide to PM. But divorce is an option?

SGX: Money not enough

The deal between SGX and ASX was that the ASX’s shareholders would get top dollar for their shares. In return, SGX would get control over the joint entity.

It is clear that both sides tot that the ASX would be able to sell the deal to the Foreign Investment Review Board, the Treasury and Parliament. It clearly ain’t so.

So the deal’s off and SGX is S$20mn poorer, SGX is stuck with organic growth. But its shown that its track record in this field is medocre at best.  Hence its willingness to pay top dollar for ASX,

Time to short the stock?

Bang balls, property bears

Based on the sale price of S$161.6 million of Amber Towers “and at the equivalent plot ratio of 3.55, the sale reflects a land rate of $1,118 psf ppr,” said Ms Suzie Mok, director of investment sales at Savills Singapore.

Note Amber Glades and Marine Point were recently sold to Far East Organisation and CapitaLand for $1,066 psf ppr and $1,056 psf ppr respectively, So despite all the govmin measures, and the supply coming onstream in the next few years,  developers remain bullish.

And they don’t think Goh Meng Seng and friends will get a chance to implement their plans to destroy the property markry by selling HDB flats at cost of construction prices.

PR Pros: The PAP needs yr help

The governing PAP has a reputation for being control freaks. Nothing must go wrong, and if something does go wrong, there is always a reason why the minister or MP  did not goof.  Even God can goof but never the PAP.

But even the “nation-building”, “constructive” local media could not hide the lack of preparation that went into the introduction of new PAP MP candidates. 

It is clear from the examples cited below that the candidates were not coached into giving senitised answers to likely media questions:

— When Ms Foo was asked abt M’sia, all she could say was that the food was gd there.

— When Puthucheary was asked what he tot about the Internal Security Act under which his dad was arrested, he ended up saying that his views on this was an internal PAP matter.

— When Ms Tin was asked about her greatest regret, her answer was not taking her parents to a theme park.

Given the candidates’ backgrounds, these were questions that could have been easily anticipated. And PR-type answers prepared. Instead, these questions and the answers thereto gave us glimses into the shallowness of these so-called A team talents.

Then there was the failure to get Kate Spade Tin to block access to her Face Book page before her public introduction. 

And I’m surprised that no-one advised Puthu on his “defending S’pore” and “saving babies=NS” remarks. I don’t hold it against Puthu that he didn’t do NS. But I find it offensive for him to brag of his willingness to defending S’pore without telling us how he meant to do it.  And I find it doubly offensive of him of him to equate saving babies with doing NS.

Again these mis-steps could have been avoided with the aid of gd PR advisers.

But what if they had gd PR advice but they goofed?

Citi: Owe it money?

A customer, a politician, who owed 68 million rupiah on his Citigold card, died on March 29 while meeting with bank staff, Gatot Eddy Pramono, head of the South Jakarta Police District. said. Four people are suspected of being involved in the death, he said, Bloomberg reports.

FT reports that three external debt collectors  working for Citi have been detained, and face possible murder charges.

An internal investigation into the death didn’t reveal any physical violence, Citigroup’s Mukhtar said April 5. The bank had been working with the client and had offered to waive as much as 40 percent of the principal amount, he said, Bloomberg reported.

Two gals: best kid combi

New research suggests that having two daughters is the best way for parents to enjoy a quiet life.

In a finding that will surprise many, says the Daily Mail, researchers concluded that two girls are unlikely to fight, rarely annoy their parents and tend not to irritate each other.

The second most appealing combination was one girl and one boy.

The worst combination, according to the survey of more than 2,000 parents in Britain, is four girls.

But for S’porean parents of Chinese or Indian origin, four daughters is best. There is a shortage of gals in India and China. So unless the daughters are physically ugly, the daughters will bring wealth if managed properly.

WP: Team A- or playing a subtle game

The WP has moved from calling itself a watchdog to calling itself an insurance policy: a policy that cannot be called upon yet because it says it is not ready yet to be the governing party. Sounds realistic for the present, and sounds good long term. The WP can offer an alternative to the PAP, if the people want it.

But analyse further and there is a problem.

“In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss,” Wikipedia. It is the lesser of two evils: no honest person with a home fire insurance policy wants his house to burn down so he can collect on the policy. Likewise, no honest businessman who insures his goods, wants them to be damaged so he can collect on the insurance.

Insurance is protection. So one way of looking at what the the WP is saying is that it sees itself as lesser of two evils, the greater evil being the PAP going rogue.

This doesn’t sound that good because it implies that the WP thinks that a good PAP is best for S’pore. It is only second best.

But Low could be engaging in very subtle game. In five to 10 years time, the probability of one LKY still being able to call the shots is pretty remote. Remember the actuarial mortality tables as they concern an 87-year old man of Chinese origin.

The scenario that Low could be contemplating could be a post-LKY S’pore where there is in-fighting in the PAP. There is a split between the guardians of Hard Truths and those who want to move beyond Hard Truths.

The guardians want to rule S’pore according to the principles laid down in Hard Truths (for example keep the people in fear and dependency; FTs are better than locals; and no such thing as undeserving poor, the poor deserve to be poor).

The latter want a more liberal, open and caring society even if the state has to spend more on welfare, and less on defence or overseas investment. If the former win, a natural fit for the latter would be the WP. The WP would have the organisational framework while the PAP dissidents would have experience of government and money (assuming they save part of their salaries).

The new WP could easily become the governing party.

Is this what Low is planning for? If so, he could be S’pore’s answer to Chuko Liang.

But if the moderates win the struggle in the PAP, the WP would be irrelevant. Likewise if post-LKY, LHL is revealed for the liberal that some S’poreans believe he is.

Taz the trouble with playing a long subtle game.

Unrealistic expectations

No not the number of seats the Opposition will win, but the unrealistic financial expectations of an ordinary person. While I’ve never been a personal financial adviser or planner, I’ve heard enough of people’s expectations that this rings true. http://www.xtranormal.com/watch/7743951/a-day-in-the-life-of-a-financial-advisor

Though the response of the adviser is not. Usually the adviser decides to sell such a person what the person wants to buy.

Glencore IPO: Commodities to collapse?

You might not have heard of Glencore. There is little news of its upcoming IPO in our MSM because the US$10bn IPO will be listed in London and HK. This would value the company at US$145bn

Co is a trader in commodities.

With oil at USD120 and demand for most commodities strong, why should this float mark the end of an uptrend in commodities? Well the US Fed is likely to stop printing money and the European Central Bank is likely to join emerging market central banks in raising interest rates. China has juz raised interest rates for the second time in four months.

Remember Blackstone? In 2007, Blackstone, a private equity firm went public at US$36. A year later, the stock was at US$5. The private equity boom had ended. It is now only recovering.

Shrewd money knows when to cash out and Glencore has some of shrewdest minds in the commodities market.

PAP: Time to change yr messages

Given the widespread cynicism among S’poreans about why people became PAP candidates, MPs or ministers, I laughed last week when I read, Potential candidates … should “have their hearts in the right place”, said Minister for Home Affairs and Law K Shanmugam said.

Earlier I was in stitches when I read, DPM Teo Deputy Prime Minister Teo Chee Hean has ask Singaporeans to ”vote for the party whom you can trust” . Had he forgotten the many instances when the PAP turned out to be party that could not be trusted

— the promise that the 2 percentage  point GST increase would be used to fund welfare spending. There is gd evidence to show it isn’t. There is a surplus.

— the handwringing by Mah Bow Tan that property price rises could not be controlled, “Free market leh”. Only for him to introduce a slew of measures to try to control property prices

— the “climate of fear” among ministers and PAP MPs over MM’s comments on the failure to integrate. Only after MM said, “I stand corrected”, did Michael Palmer say he and many in the PAP disagreed with MM. Left me wondering, if these people could be trusted to tell “Truth to power”.

I (and I’m sure) readers can provide more examples, but I’ll move on to PM Lee Prime Minister Lee Hsien Loong calling on Singaporean voters to ”think carefully and calmly about the long—term future”.

Does the PM realise that he and his team are still working within the framework established by Goh Keng Swee in the 1960s? Then being MNC-friendly went against the conventional wisdom and we had the MNC market almost to ourselves. Since the late 1980s, Dr Goh’s view has become conventional wisdom around the world. We have lost our edge and can only be MNC-friendly by working “faster and cheaper”. What kind of future is this?

Secondly, seeing the balls-up by government in not coupling the liberal immigration policy with a commensurate expansion of  public infrastructure in housing and transport,  has left me concerned that the government doesn’t think straight

These old messages from the 1960s should be retired. Surely the generals, Tin and Janil could have come up with fresh messages for the post 65ers?

No FTs, no Indian food

The M’sian experience.

Over the last year the Abirami restaurant chain has closed down five of its seven locations because of a shortage of foreign workers.

The moral of the story: there are always consequences to any policy.

RP: Playing with fire

It would seem that trying to do the right thing gets being taken for being weak and foolish.

A few weeks ago I blogged on the NSP rowing with practically all the other parties over seats. Since then, I’ve been told the NSP has “done the right thing”. It conceded one seat to SDP and reached a compromise with the WP over one GRC (Moulmein – Kallang) and two SMCs.

It now plans to put its “Team ex-RP + one other” in Chua Chu Kang.  The NSP has been active in this area for ages.

Well now the ST reports that the RP has told the NSP that it would contest this GRC if the NSP did not concede the Radin Mas and Pioneer SMCs to RP. There had been some wayanging over these two SMCs.

What is sad is that the RP Sec-Gen made this threat public via ST.

What is sadder, this threat could become another self-inflicted wound to RP and KJ’s rapidly diminishing reputations. (I’ll blog on the rise and fall of RP one of these days.)

Despite denials, it is widely believed that the RP is streched to field teams in two GRCs*. What happens if NSP, tired of being pushed around, decides not to concede anything? The RP could find itself in serious trouble. It might not even be able to field a team in Chua Chu Kang. And if it did, the team would certainly not have more credibility than the NSP which includes three ex-RP members, two of which were RP “stars”.  And all this in an area where NSP has been active in recent years.

And what happens when KJ the fabby meets Steve Chia, the guy who could model speedos.

Exactly, in any fight the RP would lose badly. S’poreans may say that they admire JBJ but they certainly didn’t buy his books when he was hawking them. So whty should they vote for his son?

But what if in losing, the RP tipped the balance in favour of the PAP?  S’poreans would not forgive KJ.

Being the new kid on the block is tough, but that doesn’t mean attempting  to play chicken with NSP, and self-destructing if the bets don’t pay off. I hope the WP and Chiam can help KJ see sense, and not link the two westerly SMCs to Chua Chu Kang. In the latter, NSP is objectively the best party to stand.

——

*Despite the RP’s song and dance of working with Chiam in a GRC, it is the NSP that is working with him, not RP.

StanChart to Reds: Buy Asian stars

Liverpool is told by sponsor, Standard Chartered, to sign Asian football stars to take advantage of commercial deals. BBC Online

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TOC: Pls don’t try to do humour

You don’t know how to do April Fool’humour. You gave the game away in the headline and as if  to make sure that the joke would not be missed,  you used the word “defunct” in the first paragraph. http://theonlinecitizen.com/2011/04/breaking-news-toc-to-contest-cheng-san-grc/

You should have used a real GRC say Moulmein- Kallang or Choa Chu Kang., though that might have got Goh Meng Seng or KJ sending TOC nasty emails. I think they don’t know the meaning of humour. As to Low, he will juz wait to see events unfolld.

This is how to do it

http://www.telegraph.co.uk/news/politics/ed-miliband/8419140/Labour-memo-celebrate-Ed-Milibands-wedding-with-street-party.html

http://www.express.co.uk/posts/view/238007/A-Zimmer-skateboard-now-that-s-silver-surfing

Helping retail investors: the HK way and the S’pore way

The speculation in the MSM that MAS’s MD had resigned  so that he could join MAS board members GCT, Tharman and Hng Kiang in the cabinet reminded me of the different ways HK and S’pore helped retail investors affected by the default of structured products connected with Lehman Brothers .

Sixteen banks in HK have recently agreed to buy back the minibonds that they sold to 31,000 (out of 43,000 investors) for up to 96.5% of their face value. Bloomberg  An estimated 4 percent of note holders would get at least 90 percent of their investments back, and 65 percent of those eligible would get 80 percent to 90 percent.

In S’pore, 1088 investors  (12.2% of minibonders) received the face value of their minibonds. So percentage-wise, the government here did better in getting the distributors to be more compassionate: to the elderly and those with only a primary six education.