S’pore is rich, but do S’poreans benefit?

What do u think?

We got the US$, yen etc.

S’pore’s behind KL

And juz ahead of HCM City. Surprised Bangkok is so far behind. Wonder what are the criteria? Think Covid restrictions play a part. Look at HK and Tokyo.

The new Sick Man of Asia

Just as the UK is becoming again the Sick man of the West, China is again smoking opium.

China’s growth is set to fall behind the rest of Asia for the first time since 1990, the World Bank reckons. It revised down forecasts for GDP growth to 2.8 per cent — compared with 8.1 per cent last year — as zero-Covid policies and trouble in the property market throttle the world’s second-largest economy. Expectations for the rest of East Asia and the Pacific have conversely improved with the region excluding China expected to grow 5.3 per cent, up from 2.6 per cent last year thanks to commodity price rises and a domestic consumption rebound.

China’s currency has lost further ground against the dollar, taking the fall for the year to date to 11.5 per cent. The renminbi now trades at Pmb7.1631 against the US dollar, adding to pressure on the Chinese central bank to intervene by deploying foreign exchange reserves.

FT

Meanwhile a major Indian conglomerate is returning to investing in India. For a long time it was squandering money in the West because it was an ang moh tua kee kind of Indian. To be fair it grew rich in India because of the British. It was also not really Indian. More soon.

S&P 500: Last chance to buy the dip

On Friday, the S&P 500 closed below its previous year low after it didn’t manage to break thru the 4,231 level in August. That would ended the post January bear market ( S’pore: Home of paper generals and paper traders).

Back in bear territory.

The good news is that Goldman Sachs last Thursday cut its year-end forecast for the S&P 500 index to 3,600. Only 2.5% from Friday’s close.

Still three months+ from 31 December 2022.

The New Year rally coming early?

Our central bank is really Mickey Mouse

(Explanation: When Chris K was a tua kee swinging big dick, MAS was known as Mickey Mouse, according to him. Don’t know about now)

Several months ago, former US treasury secretary Larry Summers, made an acerbic remark, taking issue with central bankers’ growing focus on climate-related risks. Comparing them with children neglecting their homework for the sake of extracurricular activities, Summers said: “Maybe you don’t get to take on global climate change when you’re having double-digit inflation rates.”

This remark about the consequences of not focusing on one’s reason for existence while doing BS came to mind recently: firstly when I read

A South Korean court issued an arrest warrant for Do Kwon, the co-founder of collapsed cryptocurrency operator Terraform Labs, over alleged violations of capital market rules after the $40bn implosion of the terra stablecoin.

https://www.bbc.com/news/business-62910462

The South Koreans said he was in S’pore, though the S’pore police deny he is here. Whatever, the five other individuals connected to the case that the Koreans want to arrest are here.

Meanwhile MAS is trying to clean up its act by cracking down on crypto firms. It had encouraged them to come here.

Secondly, Chris K, now a pensioner who is managing his money like a hedgie is KPKBing:

Ofcos the supertalents missed inflation surge earlier this year. They were in the transitory bandwagon even at the time the central bankers were getting cold feet whether it was after all transitory. And don’t worry, the inflation rate will moderate in the 2nd half of this year, the minister(s) cooed. Ofcos none of that happened, they were offside by a long yard …

Chris K on Facebook

All in all, MAS’s cockups on crypto and inflation (Remember that it’s part of the Pay And Pay ecosystem) show that paying millions doesn’t mean not getting monkeys.

2022 forecasted interest rate rises: S’pore’s very aggressive

Policy rates are rising in advanced economies. Only the US of A, NZ and Canada are forecasted to be more aggressive than us for 2022.

Policy rates at the end of the year, %, countries ranked by policy rate

We way ahead of East Asian and Asean countries.

Do remember that

As Singapore’s monetary policy is centred on the exchange rate and its capital markets are open, domestic interest rates are largely determined by global interest rates and foreign exchange market expectations of the Singapore dollar.

https://www.mas.gov.sg/monetary-policy/Singapores-Monetary-Policy-Framework/faqs/section-2#:~:text=As%20Singapore’s%20monetary%20policy%20is,expectations%20of%20the%20Singapore%20dollar.

MAS and MTI have kept their CPI-All Items inflation range at 5.0%-6.0% while MAS Core inflation is projected to average between 3.0%-4.0%. (added on 1 October 2022 at 2pm)

Go buy T-bills? Auction next Thursday

Leveraged to yr eyeballs with housing loan etc: go to church or mosque or temple and pray hard for divine help.

Go buy SSB? Last day to apply for October issue next Wednesday Tuesday (Amended on 26 September 2022 at 1 pm.

The Fed’s reasoning for a soft landing

Jay Powell refuses to rule out US recession after third 0.75% rate rise

Fed chair warns ‘chances of soft landing are likely to diminish’

FT headline just now

So why did he until recently argue that the Fed could engineer a soft landing? Disagreeing with many media, and sell and buy side pontificators?

This extract from a BBC article published only yesterday explained his (and the Fed’s reasoning)

[T]here are plenty who believe a “soft landing” – a moderate economic slowdown, instead of a full-on recession – is still possible. Under such a scenario, you might see slower growth without the upheaval associated with a full-blown downturn.

Driving that optimism is America’s strong job market. Employers added 315,000 new workers in August. That’s hardly a sign of a sputtering economy, according to US Federal Reserve Governor Christopher Waller.

In a recent speech in Vienna, he dismissed recession fears, saying: “The robust US labour market is giving us the flexibility to be aggressive in our fight against inflation.”

The Fed has said it won’t hesitate to keep interest rates high, for as long as it takes to drive down inflation. With the US central bank preparing to show it won’t flinch in its resolve to lower prices, the process is unlikely to be smooth. If it raises rates by too much, the economy could plunge into recession. Raise them by too little and inflation continues to soar.

https://www.bbc.com/news/business-62976318

Powell now accepts what the Federal Reserve Bank of Atlanta President Raphael Bostic accepted “was a difficult high-wire act to pull off”, saying recently that a soft landing is “a very hard thing to do”.

Markets are tanking.

But ever tot he could be wrong in changing his mind?

Whatever, there’s money to be made. Just where, I don’t know.

Economic theory that is problematic in a crisis

Following the good, sound economic theory of marginal costing, European electricity markets price the cost of power each hour is set by the most expensive power plant that is needed to meet demand. This is common practice in developed free market countries.

And power plants which generate electricity using gas are the most flexible and able to fill gaps in power generation. So it is gas-powered plants which are setting the price of energy in many European (and other developed countries. The system usually works well.

But the present refusal of Russia to supply gas to the EU is causing the price of gas to go ballistic.

Worse high gas prices are coinciding with shortfalls in nuclear-power generation, as many reactors are closed for repair, and in hydroelectric-power generation, due to drought.

The result is very high prices for electricity. And very high profits even for those energy companies whose costs have not increased, such as those using nuclear, solar, hydro or wind. The EU proposes to cap the revenue that firms can receive on the market at €180 per megawatt hour (MWh). (The market price before the crisis was around €50 per MWh in Germany.)

Revenues above the cap will be collected by grid operators to be redistributed, perhaps in the form of cash handouts to households. The €180 cap is actually generous to energy companies according to the experts.

But there’s another complication. The renewable energy companies often have fix price arrangements so the headline “profits” may not be there.

Meanwhile consumers are KPKBing and governments are trying fixes that good sound economic theories disapprove of like capping the price of electricity or borrowing more without increasing revenue.

Productivity? What productivity?

Last year, there were lots of reports that productivity had increased because people were working from home because of Covid. Reasons given were the absence of commuting and distraction, and so on.

Now we are told, there’s a problem with not working in the office: Fortune reports under the headline

BlackRock CEO Larry Fink thinks he has a solution to inflation: Bring people back to the office

that

BlackRock’s drive to get people to return to the office “is going to be a key element in bringing down inflation: rising productivity.”

So what’s the truth?

Maybe, there’s too much BS and that results in lower productivity.

F9 for our PAP millionaire ministers

This (all about strengthening the S$ to fight inflation)

MAS double tightening of upward re-centring and slope steepening ‘likely’ in Oct: Citi

https://www.theedgesingapore.com/capital/singapore-economy/mas-double-tightening-upward-re-centring-and-slope-steepening-likely-oct

while fat cats like Chris K and Goh Eng Yeow (ex ST editor of its finance section whose bank wants to sell him structured products) pontificate on FB about buying S’pore Treasury bills at auction, us mere mortals have only SSB to invest in for slightly better than bank deposit rates. One could buy shares and reits but that’s another story.

In January this year the first-year interest rate on the Jan SSB was 0.45%. (In May 2020, this was 0.96%. I bot some (OK a lot) then. (For comparison, Etiqa had around then a product that was like a savings bank account but was paying 1.8% pa for three years. I also bot some.)

The Oct SSB issue’s rate is 2.6% for the first year. I’ll be applying for some. Will get allocated $10,000 based on precedent. Last month the first year rate was 2.63% (I got allocated around $10,000).In 2020, apply for max of $200,000 also can get filled in full.

(Got cash because of Hwa Hong takeover and a return of capital on another investment. Been finding out how to but T-bills at auction.)

I treat SSB as really short term deposits with free option to hold for longer periods (up to 10 yrs) because it costs only $4 to apply and redeem an entire allocation. Catch: Have to time redemption towards end of month if need cash: but there’s no free lunch of course. If redeem in bits $2 each time.

This coming Friday our annual inflation rate is expected to remain at 7% with core around 5%. These are the highest levels since mid-2008.

Yes there’s global inflation but when times are good, our millionaire, PAP ministers claim credit that S’pore’s doing well, justifying their millions. So when times are bad globally, they must admit (but won’t) that they are to blame for our problems.

After all these SSB interest rates don’t compensate for the price rises in NTUC Fairprice’s price of wholemeal bread: up 17% (Fairprice bread goes up again). And NTUC Fairprice is part of the PAP’s ecosystem meant to help poorer S’poreans. Nut then PAP also stands for Pay And Pay.

But let’s be fair to these fat cat ministers. In June the government opened our deep pockets: Gold extracted, peanuts given. It gave a “relief” (peanuts?) package of rebates on energy bills and direct payments for lower-income households living in HDB flats (but not for those of us in private housing even if we also are “lower-income” by PAP standards).

But PM-in-waiting said that the GST rise On I January next year must happen, come what may. If necessary, there’ll be more peanuts, he implied.

Climate change

A study by the World Weather Attribution Group has found that recent flooding in Pakistan was 50 per cent more intense due to climate change. Heavy rain has affected more than 33mn people in the region.

Actually my only reason to report the above is to use this wonderful illustration from the Economist showing the devastation and the map of the area

Typical British humour

On September 12th, King Charles III sat on a throne in Westminster Hall. On one side sat the House of Lords, an unelected chamber. One one side sat the elected MPs of the House of Commons.

Beneath his feet lurked a plaque reminding him that the first of his name was found guilty of treason at that spot, before being executed just down the street.

https://www.economist.com/britain/2022/09/14/the-monarchys-secret-weapon-insincerity

US inflation shows PAP govt right on cheap FT policies?

One critical factor in explaining the persistence of high core inflation is tightness in the labour market. With roughly two jobs available per unemployed person in America, workers have strong bargaining power, which is reflected in hefty wage gains. A tracker published by the Fed’s Atlanta branch shows that in August wages rose at an annualised pace of nearly 7%. The grim conclusion for many economists is that America may require a marked increase in unemployment in order to temper wage pressures and, ultimately, inflation.

https://www.economist.com/finance-and-economics/2022/09/13/despite-rosier-figures-america-still-has-an-inflation-problem

In S’pore, we don’t have this problem because we can always bring in FTs by the cattle truck loads via A380s when our true blue S’porean PMETs and manual workers (like waiters) want more $. Remember this when you read this: Beyond global post-pandemic inflationary pressures, Singapore’s economic structure will continue to drive up domestic costs – Academia | SG

Visualising 3,000 sq km

The past few days brought dramatic movement when a counter-offensive by Ukraine’s armed forces broke through Russian lines in the east. It has been very successful, Between 6-10 September, 3000 sq km were regained.

The president said it’s now actually 6,000 sq km.

The territory regained is not the important factor. It’s the swift defeat of the Russian army. This victory gives Ukraine a massive morale boost to its own troops and to its western partners, while severely denting Russian confidence. The recent Russian offensives took months and seized less territory.

Guderain, Manstein, Hoth, Kleist, Rommel and the other panzer generals would be proud of the way the Russians were beaten: hot knife through butter.

Ukraine’s best friends

A friend in need, is a friend indeed.

A recent comment by a Ukrainian officer, “They abandoned their tanks and equipment ”. They did this before at the gates of Kyiv. Sounds like Russian soldiers are helping Ukraine defeat Putin’s “special military operation”.

Check this out at Cynical Investor’s takes on S’pore’s History: Not the People’s Princess, but the People’s Queen.

Prices before or after bribes?

Possible Unit Price of Contenders for Malaysian FLIT acquisition.

Tejas is the only aircraft that meets the technical parameters of FLIT.

Be safe, don’t fly Jetstar

It’s a surprise that none of its planes have fallen from the skies.

Very suay:

“Unfortunately, our Boeing 787 fleet has been impacted by a number of issues, including a lightning strike, a bird strike, damage from an item on the runway and delays sourcing a specific spare part for one of our aircraft due to global supply chain challenges.”

https://www.bbc.com/news/business-62803222

So far it and those using it has been lucky. It only had to cancel eight return flights to Sydney and Melbourne from Denpasar (Bali) since 1 September, affecting about 4,000 passengers. They received an apology and free accommodation.

Black humour: Wankers fix dissident

The Workers’ Party leadership has convened a disciplinary committee to look into my Facebook posts on their handling of the Raeesah Khan matter in Parliament. The committee has called me up for an interview:

“to hear the reasons and rationale behind the above public statements made by you as: 1) Your posts had revealed the inner workings of the Parliamentary caucus of the WP Members of Parliament, and allowed our political opponents to have an inside understanding of how the WP operates; 2) Your posts had cast a cloud over the character of the leadership of the WP.”

Daniel PS Goh on FB

Can’t stop laughing at this

“Your posts had cast a cloud over the character of the leadership of the WP.”

Who made fools of themselves and the WP? And who are being investigated? Certainly not Daniel.

Many moons ago, I posted

Excuse me, Mr Singh, you Wankers have something more important to do.

The WP needs to regain public credibility that it lost when you admitted that you, Auntie and Feisal had kept quiet for three months after you and the other two knew that she lied. The three of you have to explain to the WP and public why the three of you were so stupid. I mean all of you are graduates, and you and Auntie have legal qualifications. Where were your legal brains? In your asses?

Pritam beyond his level of competency

Since then, the Committee of Privileges (Cop) recommended that Singh be referred to the Public Prosecutor “for his conduct before the Committee” because further investigations are needed to decide if criminal proceedings ought to be instituted. Faisal was also referred to the Public Prosecutor for further investigations into his refusal to answer relevant questions by the COP. Auntie got away because she ratted on the other two though WP doesn’t think she ratted on them.

And the Public Prosecutor referred the cases against Pritam Singh and Faisal Manap to the really cops for investigation.

We are awaiting to see whether they’ll be charged. I’ll be posting soon a post on what a retired senior DPP thinks about the cases. He’s no PAP man.

Btw, is the PAP trying to “save” Pritam by raising the fine threshold for MP disqualification from $2,000 to $10,000? And if so. WHY?

All in all, its my opinion that the actions of the three stooges in the RK saga are prejudicial to the public and WP’s interests. Yet the Wankers are going after a cadre who publicly asked the Wankers for public accountability. Public accountability (co-driver) is the reason why many S’poreans vote for the WP.

Maybe the Wankers led by the three stooges really don’t wish S’pore well. They really are like Kirsten Han and friends: Kirsten Han trying to defecate herself and PJ out of self-made crater and Kirsten Han and friends are White Lefts.

Maybe I should be crying? And not laughing.

Chips R US

We are a pretty big global manufacturer of chips, mostly non cutting edge stuff.

Even though the chart includes non cutting edge chips, I tot that Taiwan couldn’t be that tiny a producer, and where’s Korea? But as as the FT has used this chart twice, it must be correct.

Here we go Again! Again And Again!

Xi’s zero-covid policy is having another bad week and it’s really bad:

Much of Shenzhen, a Chinese tech metropolis, entered a weekend lockdown to allow for mass covid-19 testing, as the city battles a spike in cases. Residents of six districts were told to halt “unnecessary movement and activities”; public transport and restaurant dining were suspended. One person from each household will be permitted to leave their homes to purchase necessities. Shenzhen is the latest Chinese megacity to face severe constraints: 21m residents of Chengdu, in southwest China, entered lockdown on Thursday.

Economist’s The world in brief

And the very latest is that China extended its lockdown of parts of Chengdu and expanded mass covid-19 testing there to contain a spike in cases. 

Looks like Xi will not have a Covid free coronation in October after which he will have no limits on his term of office.

Storm in tea cup show why we can’t be another Silicon Valley

I don’t like the public spectacle of putting Jo Schooling and Amanda Lim to shame while purporting to show that despite them confessing to breaking the law, we are a forgiving sort of place. So forgiving that we metaphorically whip them in public.

In Silicon Valley, smoking cannabis is par for the course. It’s residents are already experimenting with edgier stuff.

In today’s FT:

Cannabis has been legal for recreational use in California since 2016. There are dispensaries all over San Francisco — some sleek and shiny, others with a more hippy aesthetic. Will psilocybin mushrooms and LSD be next? Start-ups are focusing on healthcare, using psychedelics to address anxiety and depression. The Multidisciplinary Association for Psychedelic Studies has been running studies for years and found success treating PTSD. Just as cannabis was initially available for medical purposes, psychedelic therapy could open the door to changes in drug legislation.

Newsletter from Lex.

Is it right to continue criminalising the smoking of cannabis (especially in private)? After all, the PAP govt by repealing s377A of the Penal Code is going to allow male gays to bugger one another in private. So what’s wrong with smoking ganja in private?

We are no Silicon Valley or even a global city but a kampung.

HDB tells us flats are juz affordable or unaffordable?

HDB posted this infographic on FB without comment. Is some subversive working in the HDB (and who does not wish the PAP well) illustrating how unaffordable or barely affordable are HDB flats?

ISD must investigate

“Cost of flat up by 44 times while household Income up by 9 times between 1971 & 2021.”.