Buy rent marry

Minister Khaw Boon Wan has made me feel young again. In a blog post on Boxing Day 2013, he admits to being outdated, that his assumption that people get married first and then get a home is no longer valid. Instead he appears to have been caught off-guard when told by his YOUNG Sembawang activists, that Singaporeans now buy an apartment first before getting married. I don't know how young his young activists are, but this is certainly not news to me. I have been married 21 years. I remember that one of the first things I proposed to my fiancee (now my wife) was to put in an application for a HDB apartment. It was like dowry, except that it is shared by the couple - both fork out their CPF monies.  Marrying and renting just wasn't "on the cards" for us. We were young, just starting out on our careers, and didn't make a pile of disposable cash. So every dollar was valuable, which we would rather put away for tomorrow than spend it today. And so it was for my generation then. The received wisdom then was to head on over the HDB, not the ROM, to get married. And that was more than 20 years ago. At that time, Singapore was not exactly awashed with available HDB apartments. I had to ballot for mine.

So I was amused when Minister Khaw reported his ignorance. I wonder how young his "young activists" are. Is this another case of being fed the wrong and/or outdated information from the ground or being out of touch in the first place, or perhaps both?

Yes, I agree with Minister Khaw that couples, while waiting for their flats could get married, rent an apartment, get a head start in making babies, and then move into their newly minted HDB BTO (whatever) castle. But the argument against this has always been that the money spent on "non-recoverable" rental could have gone into payment for/investing in a HDB apartment, so why spend when you can invest, right? This was exactly what my fiancee and I thought when we embarked on our marital journey more than 20 years ago. From the wisdom of the young activists I see that nothing much has changed all these many years.

Ballshit

Here we go again. This time, the really big one, the mother of all ball games - the 2010 Fifa World Cup South Africa next year, no less. (Sheesh, that phrase is trademarked). What event can be bigger than that for a world crazy about 11x2 (minus the occasional red carded) people kicking an inflated rubber ball around a rectangular field?

And to fit the size of the event, Fifa, the world football governing body, has seen fit to extract that pound of flesh from the very people that give life to this activity. In Singapore, the main broadcast providers, Singtel and Starhub, have very sensibly colluded to get the best deal they can from the licensing people in Fifa. Yet even this collusion might not guarantee a sensible price at which armchair footballers might be willing to cough up. I hear that Fifa is expecting everyone to serve up an arm and a leg for the rights to broadcast the World Cup matches. Talk about profiteering. The price for watching club football in Britain's EPL is bad enough. They routinely also extract that pound of flesh for broadcast rights, which football crazy fans so willingly offer on the altar of the mother of all balls. I suppose Fifa has wised up to the game and wants in too. The colour of money excites more than balls, stupid! What they will do with that money is beyond me. Maybe fly first class to any and all meetings around the world to start with. They say money corrupts. Are we witnessing the beginning of the fall of soccer once the greed sets into every part (read: people) of the game? Well, ok, they did SAY they will donate the proceeds, but when you cause pain to countless so that you can appear generous to some...I am not so sure where the charitable spirit lies...(Hmmm...I wonder if Fifa's accounts are audited, and if so, by whom?)

Many say soccer is the beautiful game. Well, I agree. Its a beautifully 'green' game, and I don't mean environmentally friendly. I can see where some people can spot the beauty in the game. Soon the officials will be so swamp with the cash that they wouldn't even care what a ball looks like, or care if it is made of bullshit, much less what to do with it (handle it? - yeah this is accepted in FOOTball nowadays - the rote has set in, led by some of the world's best footballers like Diego Maradona and Thierry Henri, who win matches with their hands, whether sanctioned by God or not).

So when this happens, people will be knocked to their senses to see how they have been fooled all these many years into coughing up blood money to people who just kick a ball (and handle it once a while) and people who just organise these kicking ballfests.

Have the rest of us humans become so dumb that we willlingly let others swindle us in broad daylight? Yeah, blame the balls.

Corporate Responsibility

Some call it Corporate Social Responsibility - CSR for short. Corporations see it as good PR to be seen to be generous towards non-profit purposes, for the good of the community, such as acts of donations to charities, organising meaningly charitable events at their expense, and etc.

Great Eastern Life just did that - not in the usual way we associate it with CSR, but it is CSR at its best. Why? Because its payback is not immediate nor guaranteed while it swallows, on behalf of its investors, the losses that have fallen on its GreatLink Choice investment products. My mother made a startling remark about 5 months ago - that bankers have become professional fraudsters. For all her life, she has kept her money faithfully in a bank, not under the bed, nor in the drawer. And she got us all to keep our monies in the bank too, for the interest that it would earn. So can you blame her when she put a substantial amount of that money in what a relationship manager called a high-yield structured investment product? She had wanted to open a fixed deposit account with the cash, actually. After all, she has been trusted banks with her cash for over 40 years. Structured or not, the banks are selling it and they must have evaluated the product's risk. They said it was low-risk high-yield. What's more, they also threw in the principal guaranteed / principal protected words. Little did we know that banks' definition of 'guaranteed' and 'protected' can be so convoluted that it would take a couple of lawyers to untangle it, or make it more confusing, depending on who you spoke to.

So, 'Thank you', Great Eastern Life and OCBC Bank (the parent), for taking what must be a difficult decision to return all the money that people have invested in structured products with you, knowing that their values have plunged 40-80% today. That's good 'ol banking - honouring people's trust and keeping their money safe, like it has always been, until recently.

Law of wealth

The current economic recession, probably the worst that Singapore has ever seen, may be a blessing in disguise. For too long, Singaporeans have had it too good, and expecting that the good times will roll on and on - strong economic growth, high wages, sky-high apartments (of the $$$ kind) and easy credit through very very low interest rates.

I have lived long enough to know that this happy state of affairs cannot last long. That it has done so came as a bit of a surprise to me. Of course, there was the recession in 2003 - largely caused by the SARS outbreak, so it was not representative of typical economic cycles. The same can be said of the internet boom/bust and even the Asian Financial Crisis back in 1997. All of these were largely localised. For the connected globalised economy, the real markets were still there. So it would appear that globalisation would smoothen these economic boom-bust cycles, leveling the fluctuations that are characteristic of capitalist economies.

We got drunk on globablisation, we became careless with our money, and like the US consumers, we began to go into debt thinking that we will always have that steady stream of income to cover ourselves. Debt financing, sophisticated people call them. Even the Singapore government was bullish about this, talking about the desirability of developing a debt market as if it was the next best formula for pushing the economy to ever greater heights.

Now, I am not saying that debt financing is all wrong. Most businesses depend on a careful balance of cash flows to survive and many go into debt to expand, for example, listing on the stock market. But when everyone is doing it, including the clueless sub-prime people in the US, where debt is miraculously converted into interest-baring assets, which are then resold as it they were gold, ad-nauseam no less, with no accountability and no tomorrow (because the people who sell these get their money today -why worry about accountability some time down the future?), we end up with what the world is lamenting but can't do much without - toxic assets. These 'assets' which came out of the ingenuity of the human mind - to create something out of nothing. Ironically, every banker is now holding a lot of these toxic assets and none of them dares to move on them.

The problem is, they forgot that only God can create something out of nothing. We mortal souls? They again forgot about Isaac Newton and the greatest physicists that came after. They taught that matter cannot be created nor destroyed. But I suppose those PhDs who went into Financial Engineering - they abandoned Physics and its immutable laws. They did not look at 'wealth' as matter, so you could create new wealth without limits.

When you tinker with matter, you can save mankind or blow up the whole world. Is it any surprise that when you do the same with numbers, you can end up destroying the world too?

God help us all.

Image: morguefile.com. Author: clarita

The Ox cometh

Chinese New Year has come and the first 2 days of celebrations have past without your knowing it. In this New Year celebrations, it has been the same old routine, the obligatory CNY eve dinner, the visiting, the eating. Yes, the visiting too. It appears that for some relatives, it is a once a year affair meeting up, unlike friends whom we meet and talk with the whole year around.

But meeting them, the relatives, have been a good thing, I wonder, though, if our meeting will be the last. Why so morose in a time of celebration? The inevitable. Within the last year, I have lost a dear relative, who was the architect of my parents' meeting and eventual union. In a way, I am here today because of her. But she was over 90, and she died peacefully in her sleep, that was a relief. There are those who hang to to dear life, when letting go would be so much better. So I had one less person to visit this. I visited another nonagenarian yesterday, an in-law. She seemed less alert than when I last saw her, no prizes for guessing, one year ago. But she could still recognise me, if barely, and one had to go near her to make oneself heard. But otherwise, she is in relative good health, which is what I wished for everyone I visited this CNY. No, not the wealth and good fortune, not the wish for the presence of the God of Fortune in the New Year, it had all got to be about good health. Priorities and realities, they change as you grow older. Perhaps that is why we grow wiser too. Oh to reminisce the fun and folly of youth, days gone by, never to come again.

We wish the best to all the children and send them along their way with a little money during these times. We genuinely wish them the best of life, good fortune, a life in excess (not of excess), excelling in school and, yes, health in their young lives. Even the young die prematurely, in the prime of their lives. We must ever be mindful of that. The young, some of them act and behave like there is no tomorrow. They speed down the expressways after having imbibed a few glasses, devil may care to claim their souls that very day. Many youth puff their way into addiction, thinking that they can put the stick down some time down the road. It rarely works out that way. I know a friend, a good man, who told me that, try as he might, he could never stop smoking. His regret comes too late. He is addicted till the day he breaths his last.

Why such depressing thoughts, this CNY? Perhaps the old look back with a sense of "seen that, done that" 20/20 vision. For all the good wishes over the years, there have been hard times. And 2009 promises to be the hardest of them all, the mother of all depression, they say. Talk is about possible loss of jobs - not because the company will retrench, but that the company will simply disappear, post CNY. People are on edge. It is part of the conversation this CNY. Everyone, it seems knows someone who has such worries on their minds.

But we remind ourselves that we have to be resilient, as the expansionary Government Budget 2009 suggests. More than at any other time, these people already have a plan B, ironically just waiting for that opportune time to put action to words. As the New Year slips into history, we face the inevitable tomorrow.

Happy Lunar New Year!

Worth of Words

I am disturbed. I really am. What is the source of my discomfort, you ask? Well, a Director of our Monetary Authority of Singapore (MAS) has written to the press, in reply to a reader's question, that "Insurance companies are expected to have clear policies...", that "MAS expects the board and senior management to ensure that these policies and procedures are implemented consistently". She was writing in response to a reader's letter questioning the security of having one's personal data stored on insurance agents’ laptops. Some other readers have gone on to question the wider practice of providing photocopied ICs for all kinds of applications, depositing ICs with the security guard, etc.

While MAS may not have oversight over the latter, its reply concerning the former certainly gives no comfort to the person considering an insurance policy. If governance can be executed through expecting that people and organisations will do the right thing, then the frauds that have been surfacing over the last few years, from Enron to Satyam, would not have occurred. But it is precisely because these things do happen, and that even after auditing firms have done their jobs (or not) in conducting periodic statutory reviews. What is alarming in many cases is that fraud can take place with the most respectable people (e.g. Bernard Madoff - described as a long-standing leader in the financial services industry), that something more cries out to be done. I am not suggesting that we stifle the industry with more government rules thereby imposing onerous bureaucratic procedures on businesses that are struggling in these times. But its current 'hands-off' approach is surely too optimistic of human nature.

Might Singapore be waiting for its next Enron, or Satyam or, worse, its Bernard Madoff to make MAS' Communications Director's words come back to haunt her? We have had Leeson-Barings under our belt, but we certainly don't need another.