Monday, March 30, 2009

Obscene Pay for Church Pastor


Though the AFP report did not mention who was the one employee paid between 500,001 and 550,000 dollars in the financial year ended March 31, 2008. I feel it was a dead giveaway when New Creation's honorary secretary, Deacon Matthew Kang, said that it was the church's policy to "recognise and reward key contributors... and Senior Pastor Prince is the main pillar of our church's growth and revenue."

Coming from a Christian church that so often loves to accuse mainstream Catholicism as an erroneous religion, I find Pastor Prince and Deacon Kang's non-adherence to basic biblical following rather disturbing.
According to [Lk. 18:18-23]: "A certain ruler asked him, 'Good Teacher, what must I do to inherit eternal life?' Jesus said to him, 'Why doyou call me good? No one is good but God alone. You know the commandments: 'You shall not commit adultery; You shall not murder; You shall not steal; You shall not bear false witness; Honor your father and mother.' He replied, 'I have kept all these since my youth.' When Jesus heard this, he said to him, 'There is still one thing lacking. Sell all that you own and distribute the money to the poor, and you will have treasure in heaven; then come, follow me. Jesus looked at him and said, 'How hard it is for those who have wealth to enter the kingdom of God!'"
While Jesus did not condemn wealth (He had MANY rich friends), He did feel rather strongly about the possession of wealth. Christ constantly pointed out the danger of riches, which, He says, are the thorns that choke up the good seed of the word (Matthew 13:22).
Not to mention [Acts 4:32-5]: "Now the whole group of those who believed were of one heart and soul, and no one claimed private ownership of any possessions, but everything they owned was held in common. With great power the apostles gave their testimony to the resurrection of the Lord Jesus, and great grace was upon them all. There was not a needy person among them, for as many as owned lands or houses sold them and brought the proceeds of what was sold. They laid it at the apostles' feet, and it was distributed to each as any had need."
Sure, I don't begrudge charitable organisations the T.T. Durai standard of self-serving high salaries (hey, if the leader can craft new ways to milk millions for charities, they do deserve that amount of pay for the greater service performed). But really, when a church leader starts to get paid like a private sector employee, I really wonder as to his principles and "virtues" stand.

Saturday, March 28, 2009

Japan gets the cool stuff: Terminator Salvation exhibition

It's so unfair. Japan gets all the cool stuff! Like an exhibition before the May 2009 premiere of Terminator Salvation. The exhibition features all the cyborgs from the Terminator series over at Miraikan (National Museum of Emerging Science and Innovation) Tokyo.

Terminator Exhibition - Battle or Coexistence? Robots and Our Future- features all the Terminator models from the motion pictures Terminator, Terminator 2 & Terminator 3:Rise of the machines and includes the series- Terminator: Sarah Connor Chronicles. Visitors will also catch a glimpse of a "prequel" Terminator- The T-600. A precursor to the T-800 "Arnold" model.

The T-600 is a an early Terminator prototype. Unlike the T-800, the T-600 features an 8ft tall metal endoskeleton covered in synthetic skin instead of living human tissue.

T-800 "Arnold Schwarzenegger" cyborg consists of "living tissue over metal endoskeleton". As the movie unfolded across Terminator and Terminator 2, we learnt that the T-800 possessed excellent learning capabilities, enabling it to understand and adopt human behavior and phrases. It can also mimic voices once it hears them. A slightly improved version of the T-800 — the T-850 — appears in Terminator 3 when it's forced to face off with the T-X.

T-X aka “Terminatrix,” is embodied by babelicious Kristianna Loken incorporating a variety of weapons into its endoskeleton similar to the T-1000 "liquid metal" Terminator. As depicted in Terminator 3: Rise of the Machines, the T-X can conduct DNA analysis by tasting blood, possessing shape-shifting abilities like the T-1000 and can also remotely control other machines and Terminators.
In yet another sneak peak at Terminator Salvation, the Moto-Terminator is on display as well. A motorcycle-based death machine, I look forward to watching it in action during the movie. And finally- Terminator: Sarah Chronicle's Cameron Philips (TOK715), a reprogrammed Terminator.
Terminator Salvation will be out May 2009.

Friday, March 27, 2009

Weekend Wishlist

This is the coolest gift idea since Dancing Toasters. I want one. :)

Snowy Relaxed


I have a $2000 dollar Le Corbusier Lounger at home. It's now the exclusive property of my "son". He showers on it, he sleeps on it. If you sit on it, he gives you a dirty stare.

It's his. And he's completely relaxed on it. Snowy- It's yours.

video

Thursday, March 26, 2009

Marijuana: The possible solution to aid the economy

John Gilliam for the Huffington Post:

Today, in the historic first online town hall, President Obama fielded questions from nearly a hundred thousand people online. One of the most popular questions, and indeed, one of the most popular questions in any forum that lets people vote on what matters to them, was about whether legalizing marijuana would help improve the economy and job creation.

Chuckling, the President said: "I don't know what this says about the online audience, but [laughing] this was a fairly popular question, we want to make sure it was answered. The answer is no, I don't think that is a good strategy to grow our economy."

Wednesday, March 25, 2009

How many ministers does it take screw in a lightbulb?

2 Senior Ministers, 2 Deputy Prime Ministers, 1 Minister Mentor, 3 Ministers and the Prime Minister.

Tuesday, March 24, 2009

Things you wished you saw more of in Mainstream Media



You know, if our nation building press had carried more headlines like these (ahem.. like during minister salary debates etc), you might actually enjoy a spike in readership.

Nobody enjoys listening to public relations spin. Especially when it's force fed through all possible mainstream media outlets that we have to pay $110 annually for.

Like advertising, it's eventually screened by the brain and finally just plain ignored. You won't even be able to "build the nation" anymore because folks just discount everything you print/broadcast period.

My advice: CARRY REAL COMMENTARY. Occassionally slip in a piece of propaganda as required by the government.

The best lies are hidden between two truths.

Really? 17 again huh..


After High School Musicals 1,2,3, 4,5 and 6; I always thought that ZAC EFRON was EFFING 17 ALWAYS.

Monday, March 23, 2009

Senior Minister of State for Information, Communications and the Arts, Lui Tuck Yew in Parliament, on amendments to the Films Act.

“We should not prevent people from recording video clips of political events held in accordance with the law or from making factual documentary videos of political issues and events."

The problem is- who decides what's "factual"? The courts? We know how that works.

“Films with animation and dramatisation and distort what is real or factual will be disallowed, as the intent of the amendments is to ensure that these films do not undermine the seriousness of political debate.”

Satire and analogy are often the best ways to illuminate ridiculous policies. In any case, I hope they can save the futility of "debate" on this topic in parliament and devote their time to real issues like meeting the changing economic landscape.

In short- PAP will make the law water tight. Even if it doesn't and "distorted" films are made, the courts will interpret the law and make legislation water-tight regardless.

Goodness, these demonstrations of effort in freeing political space are just a waste of time.

Example: Is this factual cartoon of the news coverage on the AIG bonuses distorted? Or merely a creative method of highlighting the problem?

Sunday, March 22, 2009

Divine Guidance

Hindsight is 20/20 it's oft said.

I've found that over the last year, my faith in God has grown stronger. His testament to guide and enrich my life has proven through in almost all aspects of my life.

From the life-altering to the mundane, I've found that His Plan and His Will are ultimately the best fit for your needs.

Folks often worry about God's Will not coinciding with our mortal wishes. But I've found that when you leave the navigation controls to the Almighty, His Plans for you lead to happiness. Yes, the immediate mortal wish is not fulfilled, but hindsight allows you to see with blinding clarity that- Hey. The way it turned out was better for you in the end.

Personal responsibilities and work schedules often come into conflict because I have a multitude of work hobbies that keep me occupied and my week fully maxed out. Yet, under His guidance, I have "miraculously" managed to find a monthly roster schedule that fits my personal needs PERFECTLY.

Coincidence? I think not. Even where the clashes in scheduling occur, these obstacles are no match for the power of His Will- a coincidental need to swop shifts from a colleague and once again, I'm allowed to live a life as full as His Grace and mercy.

Over the weekend, I learned that my dad would enjoy a new lease of life with a new business opportunity that would keep him fairly comfortable for his retirement. This had been a concern since the 2009 Chinese New Year celebrations. Whenever my Faith in Him bears fruit, I truely enjoy the feeling of foolishness that befalls me when He proves yet again, that if He can walk with you through the shadow of the valley of death, you really SHOULD NOT sweat the small stuff.

The moral of the story is this- Trust in the Lord and do your best today. Just leave it (everything) in the hands of the Lord.

Thursday, March 19, 2009

Truth, Justice and the non-PAP way

Singapore again ousts the editor of the Asia Sentinel
You can say one thing for Singaporeans. They have long memories. And if you think the place is loosening up, think again.In 1988 — 21 years ago — my projected three-year stint as the Asian Wall Street Journal's correspondent in Singapore ended two years early when the Singaporeans refused to grant me another work visa, and I was forced to leave the island republic to its own devices. Singapore does not now take kindly to the practice of independent journalism, and it didn't then. The media watchdog organization Reporters Without Borders ranks Singapore 140th out of 167 countries surveyed in terms of freedom of the press. The country has been kicking foreign journalists out for writing critical articles about the republic since the early 1970s.
Fast forward through three jobs and several countries to March 17, 2009 – Tuesday – when I flew to Singapore for a one-day stopover as a formality to getting a new visa for Indonesia. The bullfrog-faced woman at the country's immigration counter, an office that is among the world's fastest and most efficient – stiffened visibly when she entered my US passport into her computer, and immediately called for backup. Twenty-one years later, I was being bounced out of the country again.  The Burmese general Thein Sein was luckier. The junta member got a warm welcome and an orchid named for him. Perhaps there was a mixup, or perhaps he banks there. Seconds after the woman passed my passport through her scanner, I was shepherded away from the usual scrum of passengers headed out into Singapore's tropical sunlight, and into a facility where a stone-faced immigration officer apparently busied himself making telephone calls. When I attempted to ask to inform a colleague on the same trip that I had been detained, he shooed me back into the facility, where I sat watching a couple of football teams contend for a half hour or so.After what appeared to be a series of telephone calls to bureaucrats somewhere, ultimately, I was led away and into the upper reaches of Changi Airport. 

Changi is a great airport, with an array of stores that would cause envy to some of the world's best department stores. But there are parts of Changi that you probably aren't ever going to see. One of those parts was a barren room with a quote on the wall from J.M. Barrie, who created Peter Pan, that "it is more important to like what you do than to do what you like." It was equipped with a couple of racks of bunk beds and two television sets, where I sat with a half-dozen Chinese hookers who watched a Martha Stewart cooking show with considerable interest, considering that none of them spoke English.An couple of hours later, a wholly polite and accommodating immigration officer acceded to my request and paroled my passport from other officials so that I could go to duty-free and liberate a couple of bottles of gin to take back to nominally dry Jakarta. He showed the passport to the duty-free lady to endorse the purchase, then took the passport back. Finally I was herded to seat 64D on SQ958 – the very last row. I wasn't to get my passport back until SIA officials escorted me to Indonesian immigration, where I, my passport and my duty-free liquor were liberated.

Tuesday, March 17, 2009

Tiger Upper Cut: The Rihana Story


I don’t condone violence. But truth of the matter is, we all have limits.

I’ve had 1x insane abusive gf before. But that’s immaturity and the stupid need to win arguments that leads to pushing someone into a corner. People can and WILL snap. When they do, expect “out-of-character” behavior. It’s psychology.

ST is a stupid medium. Most of the reporters are poor excuses of journalistic integrity. But honestly, I agree with SD- Joanne Lee was calling a spade a spade.

If you’ve never reached breaking point before- Be thankful for God’s blessings. If you have- then you probably know the fury you are capable of unleashing and the consequences of said actions.

Rihana’s bf was an idiot. He went overboard. But we all know how to push buttons. Some of us push them better than others. Emotional abuse is abuse too and to be honest, the times where the ex threw steel implements at my head, I look back on hindsight and agree that I was being a real jerk for arguing my point rather than looking at things from her perspective.

In her eyes, she probably felt cornered. What we really looking out for is whether it’s a cycle of repetitive and meaningless violence.

Rather than pretend we’re saintly examples of Christ-like/Buddha-level patience, we really have to come to a consensus that we have tolerance levels, some less than others and we really need to be showing people how to manage those levels to prevent more occurences, rather than a blanket condemnation.

Sunday, March 15, 2009

Movies titles that say it as it is

At least with a movie tittie title like this, I definitely know what to expect from the plot.

This movie is available to artistically inclined 21 year olds in Singapore. Where legally, youths are allowed to have sex at 16, kill in defense of the nation, buy alcohol and stocks at 18.

Definitely Uniquely Singapore.

Perspectives: German School Shooting


Taken from Newsweek August 1999, 10 years and we're still looking at school shootings, what the heck is happening to the world?

Saturday, March 14, 2009

Credit Cancer

From Seeking Alpha:
The primary mechanism that has injected credit where it does not belong is the massive credit card industry that has developed in the United States over the last generation. The ease with which these cards may be obtained and the degree to which Americans now rely on them for routine purchases has created a culture of credit that simply has no precedent in a healthy economy. Until this culture has been reformed, America's fight to restore economic vitality will be a lost cause.

However, this week a much discussed opinion piece in the Wall Street Journal by top banking analyst Meredith Whitney, indicated that many Americans besides the president are still looking toward credit as the means of economic salvation. In her piece, Ms. Whitney writes,

...Undeniably, consumers look at their unused credit balances as a "what if" reserve. "What if" my kid needs braces? "What if" my dog gets sick? "What if" I lose one of my jobs? This unused credit portion has grown to be relied on as a source of liquidity and a liquidity management tool for many U.S. consumers. If credit is taken away from what otherwise is an able borrower, that borrower's financial position weakens considerably. With two-thirds of the U.S. economy dependent upon consumer spending, we should tread carefully and act collectively.

In order to keep the economy functioning, Ms. Whitney asks the credit card providers and the federal government to keep credit lines open, so that millions of Americans can keep on spending. However, while such actions would certainly keep our phony economy propped up a while longer, it would further weaken the very foundation upon which a real economy will eventually have to be rebuilt.

Click the title for the full article

Friday, March 13, 2009

God bless Despotism!


Just read in Reuters that:
SINGAPORE, March 13 - Myanmar's Prime Minister Thein Sein will visit Singapore and Indonesia next week, just after regional group ASEAN urged its military junta to be inclusive in elections and to free political prisoners.

Thein Sein's itinerary has not been made public, but Singapore's Botanic Gardens said it would host an "Orchid Naming Ceremony" for Thein Sein on Wednesday, as part of his official visit to Singapore and Indonesia, a spokeswoman told Reuters.
Wow.. You know.. in the 1990's Microprose game "Civilisations"- crappy leaders were named after flies, disease and vermin. I guess bestowing such an honor upon a power hungry despot mayhaps be just a simple show of honoring a visiting dignitary..
The 10 leaders of the Association of South East Asian Nations urged military-ruled Myanmar "to be as inclusive as possible" in preparing for elections next year, allow all political parties to participate, and free political prisoners.
BUT couldn't the name the orchid AFTER the politically oppressed have been freed and allowed to engage in fair elections? Or perhaps, it's a congratulatory patting of backs by like minded folks?
‘Since the PAP did not do well in Aljunied GRC in 2006, the weakest link there could be moved out and put into Ang Mo Kio GRC – which, no matter what, is still much stronger’.
Cos to me, the brilliance of LKY's PAP system has always left me in awe. Hitler, Stalin, Kim Jong Il and THAN SHWE- these guys are SMALL TIME. They use bullets and prisons. They incur the wrath of public relations nightmare. All MM Lee does is use the law. It's legal. It's fair. And there's nothing the opposition can do about it. Same bullshit objective - different smell.

Singapore and America. Polar Opposites and the concept of REASONABLE accountability


It takes the weirdest articles to evoke a “What the Hell” response from me nowadays. It comes as no surprise that I probably developed this immunity to nonsense news after a steady diet of Straits Times reporting. I say reporting, because we have no journalists. We have writers that report what the government tells them to. Which is fine, from a practical standpoint because our government pulls the strings. I’m not expecting Pulitzers for any of our local reporters so neither am I expecting mind blowing insights or analysis from them either.
When I first started writing this article, the Mas Selamat incident was furthest from my mind, the subsequent actions of the parliament aside, it was the ineptness of our highly paid ministers that eventually conjured up a monster of ire from within the belly of this beast. I say beast because when I think about the Singaporean people, I am starting to see the hopeless and helpless impotence of a people who have just begun to scratch the surface. I do not nor have I ever begotten the self-praise and justifications that came with their pay hike. I thought it unconscionable for public servants but I did not disagree that great responsibility comes with great pay.

When BG George Yeo stated that American style democracy was too high a price to pay, I did not disagree, and it was articles like the one I posted above that have come to characterize the bloated free-for-all legal suit fest that is the American system. But let’s face it- America can afford it, the world’s only remaining superpower and fount of luxury can afford to be wanton in its excesses. Population of over 300 million, the US of A can afford to make mistakes, can promote a concept of free-for-all ideology, after all, you’re bound to hit a few brilliant gems of thought and schools of thinking that leads to great renewal, revival and change just by promoting said freedoms- this is statistical fact. Almost every major invention (product/service) of modern society happens to originate from this country.

Broderick Lloyd Laswell, an overweight prisoner is suing the state authorities for his weight loss in prison. A reasonable person would say, “What did he expect? He was in jail for murder, he wasn’t living in a holiday camp.” But America says, “Let the onus be on the legal system, let 2 adversaries debate the merits and allow a system of his peers to decide on what’s fair.” In Singapore, we would say, “Bastard deserved to suffer for his crime. We’re throwing the legal suit out.” The American system places the weight of accountability on the defendant and the prosecution. Our system is cut and dried- let one man decide what’s right and wrong.
The American system clearly defines what the price of crime is- We take away your freedom in return as payment for your crime, no more, no less. For practical purposes- As long as Broderick is in jail, he’s already paying for his crime, his weight should in all fairness remain constant till the day of his release. In Singapore, we’re so ingrained to the belief that payment for your crime means that you forgo all rights and privileges accorded to you as a human being, it is this system that has made our red dot a “paradise” in the eyes of many. This is a case of “the grass is greener”. Those without look within and see the beauty, but those within look deeper and begin to see the fractures of an extremist ideology.
Extremist ideology and the country that is Singapore Inc aren’t really dissimilar precepts. In Singapore, there are no free lunches, ours is supposedly a shining beacon of meritocracy and efficiency. Unlike the bloated American system, ours is a country where anyone with the Singaporean dream of 4As and a government scholarship can achieve the proverbial good life. This is where the differences start to appear, unlike proto-typical rags to riches stories, the Singapore PSC scholar can expect an iron golden rice bowl once he attains parliamentarian nirvana within the ruling party- there he will progress unshaken and unstirred through the ranks, untested by any “real world” challenges that will decimate and destroy the careless, before he finally reaches state minister hood. A true rags to riches personality can find his equally glorious flight to the peaks of success brutally crushed upon making a poor business decision for that is the cycle that is the ebb and flow, no the RULE of the corporate jungle- the fittest survive. Ours is one where we run the nation like a business but devil be damned with the peons that work within the machinery. However, fact of the matter is, it is the leaders that take the blame of the biggest failures. Witness these men:

O’Neal was born in 1951 in the tiny rural farming community of Wedowee, Alabama, the son of a farmer. O’Neal lived with his father, mother, sister, and two brothers. O’Neal’s father showed great initiative and by the time he was ready to go to school his father had established himself at General Motors and had moved into the middle class. And this other bloke:



Charles O. Prince III, was born in Lynwood, California on 13 January, 1950.[1] Prince went to the University of Southern California for his Bachelor’s degree, Master’s degree, and Juris Doctor.[1] He continued his education going on to receive a Master of Law degree from Georgetown University.[1]
The son of a plasterer and a housewife, Prince started his career as an attorney with U.S. Steel Corp in 1975.[1] In 1979, he joined Commercial Credit Company, a predecessor to Citigroup that Sandy Weill took over in 1986.[1][3] He was promoted in 1996 to Executive Vice President of the firm, which by this point was known as the Travelers Group, now a wholly owned subsidiary of Citigroup.[4] In 2000, shortly following the 1998 merger of Travelers and Citigroup, Prince was named Chief Administrative Officer of the newly created firm, Citigroup.[5][4] He was subsequently promoted to Chief Operating Officer in 2001, to CEO and Chairman of Citi Markets and Banking in 2002, and finally to CEO and Chairman.
Go google them. Go wikipedia them. They fought, they worked hard. They achieved. But as in the real world, they fell when they made poor decisions. That’s life.

That’s ACCOUNTABILITY. C’est la vie.
But let’s look at this lady:


Ms Ho graduated from the University of Singapore in 1976 with a Bachelor of Engineering (Electrical, First Class Honours) after completing her pre-university education at National Junior College where she emerged Student of the Year and President Scholar. She graduated from Crescent Girls’ School. She also holds a Master of Science (Electrical) from Stanford University, USA.[1] In 1995, Ms Ho was conferred the Distinguished Engineering Alumnus Award. She is also an Honorary Fellow of the Institution of Engineers, Singapore. She is the eldest child of four children of retired businessman Ho Eng Hong and Chan Chiew Ping. In 17 December 1985, she married Lee Hsien Loong,[1] who later became Singapore’s third Prime Minister in August 2004. Ms Ho is Executive Director & Chief Executive Officer of Temasek Holdings. She began her career as an engineer with the Ministry of Defence.[1] In 1987, she joined the Singapore Technologies group as Deputy Director of Engineering, and became its President and Chief Executive Officer before retiring in 2001. She later joined Temasek Holdings in May 2002. Forgive me but IT LOOKS (I say looks cos I don’t know this for a fact. It’s an inference- insert legal disclaimers here) like the only turning point in her career was marrying LHL and her meteoric rise through the ranks 2 years after beginning in 1987. Unlike the men presented before her, she will NEVER experience falls from grace. She is immune. She is a demi-god. Whether it’s Shincorp saga and the lost of billions of our people’s blood money. She will continue. Like this man, she will endure:


Yes, it’s also true the maxim, it’s not what you know, it’s who you know, it’s never been more true here. Lee Suan Yew, brother of Lee Kuan Yew, and Wong Kan Seng has the good fortune to be married to Suan Yew’s daughter which practically makes them cousins-in-law and for all intents and purposes, relative to the royal family.

BUT this entry isn’t about nepotism. Culturally speaking, I’m Chinese. I’m familiar with the monarchy and dynastic concepts of hereditary power. My place within Singapore society is really that of a loyal peasant, subject to my lordship’s whims and fancies for he rules with the mandate of 66.6% heaven. I’m fine with inherited greatness or even greatness by association, sure it grates on my nerves for I was not that lucky but neither do I make distinctions between being blessed with talent or blessed with an abundance of the right connections- both of which are Wills of God/Destiny/Fate.

The polar opposite of the American Way isn’t North Korea. At least North Korea generates it’s own revenues through illegal drug trafficking and sales of nuclear technology (debatable) while it’s people live and work under harsh conditions, they’re under no illusions of a benevolent dictator, neither are there foreigners competing for the same jobs as they are. For all intents and purposes- citizen’s problems are self-contained and a result of systemic failure. The polar opposite of the American Way is Singapore. Singapore, jewel of East Asia, richest power of the south. The Singaporean dynasty enjoys the best pay with none of the responsibilities. Credit is claimed where non are due and blame is dispensed like the bolts from mighty Zeus.
The people plead not for the mad-house circus that is the American way, nor are we asking for the avarices of European decadence, but what we are looking for is REASONABLE ACCOUNTABILITY. Yes, the price of American Democracy and accountability can be high, our little island can ill afford such flagrance. But I’m hoping that somewhere in between can we meet. Somewhere between the extremes that is West represented by the USA and the best the East has to offer represented by Singapore. We have accomplished plenty, but the way things are, we are about to be undone. America with all it’s might can survive great scandals and great depressions. Singapore is really just a row boat adrift in the sea of geo-politics and international economics, since when does boat decide how the tides turn? Especially when the captain and crew are unaccountable for decisions made in this here treacherous waters that are the world?
Where is the reasonable accountability?


Wednesday, March 11, 2009

Financial End Game, part 2: PAP policies

Photobucket
Current Singapore Economy at a glance
  • Annualised GDP down 16.4% last quarter
  • According to BNP Paribas: "Collapse in exports and industrial production, weight will fall on Singapore dollar... expect it to weaken."
  • SGD has fallen against USD. USD1 : SGD1.60 by June 2009
  • According to MOF - growth may "bottom out in the later part of 2009
Budget responses to the Crisis, a neighbourly comparison
HONG KONG:
  • Refund taxes
  • Suspend property rates
  • Boost spending on infrastructure
SINGAPORE:
  • Worker retention plan through credit schemes
A Dose of Mediocre Governance
The foresight and ability of our leaders have proven legendary over the last 40 odd years since independence, MM Lee has reminded us time and again, how it was his (& team- though mentioned sparingly) talents that brought us from third world to first. Dubbed "talent", the salary scale of the ruling elite tabled in parliament and voted overwhelmingly on a massive salary increase to $1.2 million (over $3 million for the PM). Our highly paid leaders have pursued:
Unsustainable Growth Policies
FOREIGN TALENTS! We need them! Cheap labor to support the construction industry!
More inputs = More Outputs.
  • 750,000 of 4.1 million populations are foreigners
  • Three-Quarters are LOW SKILLED workers
  • ONE-quarter are professionals on visit passes
IF ONLY our Foreign Talent policy meant chasing the truely talented ONE-quarter foreigner Entrepreneur-Engineers or Indian Programmer Wunderkinds for our own local silicon valley- these are the real talents that would generate many MANY jobs for Singaporeans.

But our labor policy brings in the runt of the litter for low paying jobs to compete with other equally under-educated Singaporeans.

Not to mention, rather than spend their money here, the artificially inflated population remitted the majority of their money OVERSEAS where it benefitted THEIR HOME COUNTRIES. And after the getting was good, they're leaving. According to Credit Suisse:200,000 of them are leaving.

Oops.

"Pay top dollar for talent," we were told.
In his budget speech to Parliament, Finance Minister Tharman Shanmugaratnam had this to say, "... like other governments and the vast majority of private forecasters, we did not anticipate the speed and scale of the deterioration in the global economy in the last six months".

This is my contention- We were told that we had leaders unlike those of other governments. Our PAP government was the creme de la creme. When pressed, MM Lee insisted that without them, our wives would become maids in other countries and that the economy would flounder and die (have a sense of proportion!). We spent 30 years listening to how the world would do us in and how MM Lee and his PAP team was all that stood between us and the hostile world- HANNIBAL AD PORTAS!

It looks like PAP dropped the ball. With complete trust (of at least 66% of the Singaporeans that did get to vote), we watched awe struck as the meritocratic system placed key talent (which coincidentally were close relations to Singapore's First family) in key positions. Mdm Ho Ching, took her place as Singapore's Chief Financial Officer. With her background in Electrical engineering, she turned investment basics on the head with great cunning. While many advised- When it comes to investing, not all eggs in one basket. Mdm Ho Ching ignored and proceeded on a buying spree into foreign banks- under her, Temasek's investments were expanded to 40% of the portfolio by 2008.

The financial sector collapsed and with it, our eggs.

In one basket.

Gone. 31% lost on its SGD185bn portfolio.

Like salve on wound, MM Lee reminded us- "Long term investing 10, 15, 20 years"

I would agree except that unlike other economic crisis or the dotcom bust, those downturns DID NOT trigger a crash in the financial sector- Recovery is only natural because in those previous crisis- the system worked!

As international trade continues to contract, possibly into deep negatives, the very heart of the global economy has gone into cardiac arrest. Our investment time line would have to be significantly increased. Why?
  • With faith sorely shaken in the system- consumerist habits (Developing Asia was feeding Over-consuming US with under valued products) will never be the same again.
  • With faith sorely misplaced- the financial juggernauts whom we worshipped and aspired to work for, will no longer find the same value in our urban hearts.
Banks like Citibank have come so close to being nationalised that these "long-term" investments are made eternal and never seen again. I had postulated before that perhaps our PAP government deemed it fit to rescue foreign banks because we depended on these banks keeping credit lines open to the businesses that needed them.

Why did we choose not to shore up OUR OWN local businesses instead?

Why have a "budget" to save jobs that is not really a job saving scheme?

PAP's recession fighting budget
Save jobs with Jobs Credit Scheme: According to The Straits Times- "Under this scheme, the Government pays 12 per cent of the first $2,500 of the wages of all Singaporean workers, including permanent residents.The objective is to encourage employers to retain these workers despite the economic slowdown. The government grants are paid directly into the CPF accounts of workers."
  • However, how would a budget that involves putting money from the government's left hand to its right hand (CPF) save jobs?
  • More importantly save $300 versus $2500. IF you were an employer, which would you pick?
  • Most importantly, weren't we paying our leaders $1.2million precisely on the justification that their talents bought us ideas that worked? Even at a time where the Obama administration is capping salaries at USD500k?
We can't pump prime the local consumer economy
It's true. According to Wall Street Journal, local spending accounts for 40% of Singapore's GDP. Far less than the average 55%.

But could we not pump prime the local BUSINESS ECONOMY?
I'm no economist, but I would imagine a scenario where- money spent on the jobs credit scheme could be tiered in 2 ways.
  • Company Cost Savings: As per the original objective if they need to retain the employee because there is still a need for him.
  • Entrepreneur Credit: IF said employee was retrenched, a calculated sum of money could be given to him as CASH for day-to-day survival OR retooled as a credit incentive to start his own business. Each dollar converts into $3 credit to open up an aspiring business contingent on the basis that his business needs are met by OTHER start ups.
Example: Phase 1- Tan Ah Teck wishes to set up an internet commerce business called AFFLUX (Affordable Luxuries). He needs a web designer and programmer, the entrepreneur credit can only be spent on services of a local web design and programming company. He'd need mass produced cheap goods obviously- stocks are being cleared in China. Where goods and services cannot be obtained from a local company, his credit is allowed to pay for them overseas.
That way- MONEY IS USED TO STRENGTHEN LOCAL INFRASTRUCTURE- other SMEs and start ups.

Phase 2- Mr. Tan would need to get the word out (Marketing/ADvertising/Public Relations). We're paying $110 TV license fee for "national education". The government can fund local media (since it's nation building anyway and we need to be working, we can enjoy the propaganda when we're well again) and direct them to provide editorial support on FLEDGING start ups. An amount of space is dedicated daily- to the new start ups of the day (similar to American JOBS WANTED ads during the Great Depression but in reverse).

IN ESSENCE, nuture a media eco-system where SMEs are given an advantage to survive. Our EDB advisors scan the economic landscape for gaps in supply, calling for entreprenuers will skill sets to fill the void.

Phase 3- Suspend the paid up capital requirements for seed money from SPRING. Here's why-Apparently, we're paying our civil servants top dollar for their talents and ability to guide the nation through rough waters. And if such, I would imagine, this top dollar pays for talent that can COMFORTABLY analyse a business proposal and chart avenues of growth potential.

Retrenched financial analysts and bank executives will be seconded into the civil service- their goal: to sniff out and smell viable business ideas. On their recommendations, funding will be made available to these start-ups.

These become REAL long term investments- you're betting on a local company's future. You're investing in the LOCAL ECONOMY. Not some distant bank or MNC, the added bonus is that money will circulate in Singapore with spill over that will benefit regional trading partners as benefit from cheaper imports.

Here's some food for thought on Out-of-the-box thinking: TEMPORARILY REDUCE TAXES and DO AWAY with GST.

Yes, taxes keep the public service infrastructure fueled to keep systems running BUT the whole point of reserves is to ensure we have the liquidity to keep wheels turning. I'm just spit balling here but you need people to BUY goods and services.

Look at it this way- we'd still pay our income tax. The government still gets our CPF money to hold but at least, we won't be taxed on spending (since we really want people to spend at this point) on good & services (business or personal) and:
  1. It'll invigorate the business economy
  2. Provide a sense of rejuvenation as business starts to breathe new life
  3. Finally, stimulate demand for goods as a sense of well being returns to stimulate spending

Our Per Capita GDP is USD 48,900. Making us ranked 8th in the world. Ahead of the United States even (www.indexmundi.com).

Time to really decouple from Western economies, once local businesses are up and running, we look to China for what we need. Get THEIR factories going and stimulate THEIR spending as their folks get to earn a wage again.

Defense spending
Increasing Defense spending by 6%. That's $11.45 billion spent.
IT'S THE ECONOMY STUPID.

Countries DO NOT go to war during a recession. They have money to be spent on better things. Yes, World War 2 began 10 years after the Great Depression- that's because the Treaty of Versailles gave a fascist Hitler a tool to unite the country under his madness.

The only way war is likely is if regional neighbours started to look for other countries to blame. And truth of the matter is, as a result of our natural dependence on global trade- the hardest hit economy in Asia is SINGAPORE. We're more likely to look for a fight than our neighbours truth be told.

There's little need for such overtly aggressive spending when everyone else is cutting back. In addition, unless this expenditure is going to benefit local manufacturers with our "burgeoning" defense industry, I really doubt spending 11.45 billion makes ANY fiscal sense.

Not to mention, psychologically, our "deterent" with the increase in military spending is more likely to annoy/provoke our neighbours.

As past depressions have shown- in times like these, countries are more likely to engage in collective action to save the global economy.

Just FYI, Wars are fought over:
  1. Ideology (Kiasuism doesn't count)
  2. Gold ( Neither do Rolexes from Ah Bengs)
  3. Oil (Forget about this one)
  4. Water (We outsource from Malaysia, invade them)
  5. Land (Hahahaha. We're "nose snot")
In closing
I'd rather the government was investing in local SMEs, specifically concentrating on Green Industries. The rationale being:
  1. Capital inflows as our SMEs grow into MNCs that expand overseas.
  2. SMEs employ over 62% of work force.
  3. Accounting for over 47% (over $57.5 billion) of manufacturing and services sectors
  4. The oil scare has proven we need to depend on new energy sources and sustainable growth with renewable and recyclable resources.
I firmly believe the age of the mighty western MNC is at an ebb. Time to watch Asian corporations rise to fill the gap, why should they not be Singaporean corporations ones?

McDonald's Delivery

I do order McDonald's Delivery. Cos I get lazy ALRIGHT!?

But when I do, it's better to know the devil (Big Mac/Double Cheese Burger/McSpicy Double) you're getting into bed with. So here's the calorie chart for McD's.

I'm not lovin it. I am lovin that they deliver in under 30 mins to my place though. The McDonald's Calorie Chart Singapore Edition:


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Tuesday, March 10, 2009

Boost Juice

Been meaning to put this up for a while. Never got around to scanning it cos of work.

Boost Juice has a new fan. It's me. Boost Juice's Gym Junkie has been my favorite quasi-meal replacement during many a busy day. 

Boost's Gym Junkie boasts:
  • 75 Calories
  • 4 grams of Protein
  • 1.2 grams of fat
The best part? It keeps you filled for 3-4 hrs, in time for your next snack. It's a little on the pricey side though- $7.70 for the ORIGINAL size.

In the meantime, here's their Calorie chart. Happy Boosting!

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Monday, March 9, 2009

Financial End Game Part 1

I'm going to attempt tackle the issue of the current Financial Crisis and how it relates to Singapore & the mis-steps by the ruling party in 2 parts.

I am by no means a financial guru, but will attempt to explain in layman terms, what led to this crisis and how whether the solutions presented by our ministerial talent will help save the Singapore.

This part pertains to the issues that led to the current situation

The issues that compound and create a MEGA financial crisis (Fiat Currency) and the OVER-export of manufacturing capability by developed countries.

Early economic systems was based on a simple premise- the more you could produce and export, the better off you were. Simply translated, if your country could outproduce and outexport your competition- you were the financial power of the age.

The current Financial Crisis, as initiated by the sub-prime debacle is exerbated by the existance of fiat money. Fiat money or fiat currency is defined by wikipedia as:
Fiat currency (fiat money) is money that exists because an authority or custom declares it to be money. (From the Latin fiat, which means "let it be done"). It achieves value because a government requires it in payment of taxes and says it can be used to pay debt or buy goods and services and because people trust that the value of the currency will be reasonably stable.
Turn the clock back 80 years and HYPERINFLATION was the financial crisis of the world war I era. In essence, countries simply PRINTED MORE MONEY to fund the war effort for the first war, a problem compounded by the fact that the government did not take responsibility for the fallout of such irresponsible failure.

The solution to this mess in the early 20th century was the Bretton-Woods system were basically each US dollar was pegged to a unit of gold. However by the early 1970s, the system had to be abandoned because the federal reserve had printed more money than they had gold to back each dollar printed.

In short: Fiat currency i.e. current monetary systems have NO REAL VALUE other than what the backers deem it worth. This effect causes greater volatility in the economic boom-bust cycle AND adds to inflation.

What the United States is doing is creating more debt (via Fiat system) to pay off toxic debts. You cannot pay off nothing with even more nothing.

Now, let's take a look at the Production side of the issue: Over Export of Manufacturing capabilities.

Developed countries started to take advantage of economic theory that stated: if you could produce more at lower cost and thus at a lower selling price. You could sell more than your competition by being more competitively priced.

These developed countries, the ring-leader being the U.S. started to shift it's economic engine from one that was more produce and manufacturing based to one that was more services oriented. That is to say, they discovered if you could make something for cheaper in Asia (Singapore at the height of the 5 economic tigers phase and now China circa late 90s), you could make greater profits.

At that point, U.S. economic growth depended on building stores and providing more services to sell products made in factories all over asia. Manufacturing industries in Singapore and the rest of Asia needed more energy and materials for more manufacturing output that would allow Asia to produce more for sale to the developed economies and so America could profit and grow to create more stores and services to sell these products.. ad infinitum - Nothing wrong with the system.

Except that it's unsustainable now because of HUMAN GREED.

The consumerist movement (esp. in the US) of the late 20th century cannot be fed due to it's unseen costs. Products sold today are not sold at the cost of it's real value. It's sold at the ridiculously low costs made possible by countries that with labor practices that DO NOT reflect the true value of work involved. From worker safety to regulation working hours.

Economic theory was meant to reflect the lowered costs from bulk and efficient manufacture, not from cutting corners.

Other hidden costs include raping and overharvesting natural resources in an unrenewable fashion to produce cheap goods for a consumerist culture that buys what it wants rather than what it needs.

Nature is about to undergo it's own "subprime" situation because it's currently financing human beings that cannot possibly repay and replace the loss of assets as taken from Nature. The supply curve is about to be irrepairably warped as developing countries continue to feed the insatiable hunger of the West by overharvesting to produce at cheaper and cheaper costs.


Saturday, March 7, 2009

A Sobering Thought

BY ANTHONY FAIOLA for THE WASHINGTON POST

THIS shimmering city-state was the house globalisation built. When trade boomed, Singapore's port, at the crossroads of East and West, became a hub for freighters and supertankers. Nearly everything manufactured here is made for export. One out of every three workers is a foreigner.

But
Singapore is now a window into the reversal of the forces that brought unprecedented global mobility to goods, services, investment and labour. With world trade plummeting for the first time since 1982, the port has become a maritime parking lot in recent weeks, with rows of idle freighters from Asia, Europe, the US, South America, Africa and the Middle East stretching for kilometres along the coast. "We're running out of space to park them," said Ron Widdows, chief executive of Singapore-based NOL, one of the world's largest container lines. Thousands of foreign workers, including London School of Economics graduates with six-digit salaries and desperately poor Bangladeshi factory workers, are streaming home as the economy suffers the worst recession in South-East Asia. Singapore is an epicentre of what analysts call a new flow of reverse migration away from hard-hit economies, including Dubai and Britain, that were once beacons for foreign labour.

Economists from Credit Suisse predict an exodus of 200,000 foreigners — or one in every 15 workers here — by the end of 2010.

Singapore's exports collapsed by a stunning 35 per cent in January, mirroring much of the rest of Asia. The export boom here was tied to credit-fuelled buying sprees in the US that stopped abruptly and may take years to return, if ever.

Adding to growing fears of a years-long depression for exports is a rising tide of trade protectionism in countries including neighbouring Indonesia.

The scene in this port city illustrates the ebbing of a golden age of trade, innovation, wealth accumulation and poverty reduction through globalisation.

In four months, port traffic has fallen by double digits not only in Norfolk, Long Beach and Savanna, but in Pusan, Hong Kong and Bremerhaven.

Air hubs from London to Singapore that saw traffic soar as the world became more linked through business, investment and trade are seeing a sharp reversal of fortune. In January, global airline passenger traffic fell 5.6 per cent; air cargo nose-dived 23.2 per cent.

As exports crash worldwide, factories from China to Eastern Europe are closing. The World Bank estimates the crisis will trap at least 53 million more people in the developing world in poverty this year. Last week alone, a billion dollars fled emerging markets — the largest weekly loss since October, according to Merrill Lynch.

Some of the hardest hit are migrants and foreign contract workers.

Malaysia is expelling 100,000 Indonesians as part of a new policy to put Malaysian workers first as the recession sparks job losses.

In Britain, strikes broke out in protest at the hiring of foreigners at one of the country's largest refineries even as thousands of Eastern European immigrants headed home because they lacked work.

Investors are fleeing South Korea so fast that its short-term debt may surpass dwindling reserves by the end of this year. 

Friday, March 6, 2009

Propping Up a House of Cards

BY JOE NOCERA

Next week, perhaps as early as Monday, the American International Group is going to report the largest quarterly loss in history. Rumors suggest it will be around $60 billion, which will affirm, yet again, A.I.G.’s sorry status as the most crippled of all the nation’s wounded financial institutions. The recent quarterly losses suffered by Merrill Lynch and Citigroup — “only” $15.4 billion and $8.3 billion, respectively — pale by comparison.

At the same time A.I.G. reveals its loss, the federal government is also likely to announce — yet again! — a new plan to save A.I.G., the third since September. So far the government has thrown $150 billion at the company, in loans, investments and equity injections, to keep it afloat. It has softened the terms it set for the original $85 billion loan it made back in September. To ease the pressure even more, the Federal Reserve actually runs a facility that buys toxic assets that A.I.G. had insured. A.I.G. effectively has been nationalized, with the government owning a hair under 80 percent of the stock. Not that it’s worth very much; A.I.G. shares closed Friday at 42 cents.

Donn Vickrey, who runs the independent research firm Gradient Analytics, predicts that A.I.G. is going to cost taxpayers at least $100 billion more before it finally stabilizes, by which time the company will almost surely have been broken into pieces, with the government owning large chunks of it. A quarter of a trillion dollars, if it comes to that, is an astounding amount of money to hand over to one company to prevent it from going bust. Yet the government feels it has no choice: because of A.I.G.’s dubious business practices during the housing bubble it pretty much has the world’s financial system by the throat.

If we let A.I.G. fail, said Seamus P. McMahon, a banking expert at Booz & Company, other institutions, including pension funds and American and European banks “will face their own capital and liquidity crisis, and we could have a domino effect.” A bailout of A.I.G. is really a bailout of its trading partners — which essentially constitutes the entire Western banking system.

I don’t doubt this bit of conventional wisdom; after the calamity that followed the fall ofLehman Brothers, which was far less enmeshed in the global financial system than A.I.G., who would dare allow the world’s biggest insurer to fail? Who would want to take that risk? But that doesn’t mean we should feel resigned about what is happening at A.I.G. In fact, we should be furious. More than even Citi or Merrill, A.I.G. is ground zero for the practices that led the financial system to ruin.

“They were the worst of them all,” said Frank Partnoy, a law professor at the University of San Diego and a derivatives expert. Mr. Vickrey of Gradient Analytics said, “It was extreme hubris, fueled by greed.” Other firms used many of the same shady techniques as A.I.G., but none did them on such a broad scale and with such utter recklessness. And yet — and this is the part that should make your blood boil — the company is being kept alive precisely because it behaved so badly.

When you start asking around about how A.I.G. made money during the housing bubble, you hear the same two phrases again and again: “regulatory arbitrage” and “ratings arbitrage.” The word “arbitrage” usually means taking advantage of a price differential between two securities — a bond and stock of the same company, for instance — that are related in some way. When the word is used to describe A.I.G.’s actions, however, it means something entirely different. It means taking advantage of a loophole in the rules. A less polite but perhaps more accurate term would be “scam.”

As a huge multinational insurance company, with a storied history and a reputation for being extremely well run, A.I.G. had one of the most precious prizes in all of business: an AAA rating, held by no more than a dozen or so companies in the United States. That meant ratings agencies believed its chance of defaulting was just about zero. It also meant it could borrow more cheaply than other companies with lower ratings.

To be sure, most of A.I.G. operated the way it always had, like a normal, regulated insurance company. (Its insurance divisions remain profitable today.) But one division, its “financial practices” unit in London, was filled with go-go financial wizards who devised new and clever ways of taking advantage of Wall Street’s insatiable appetite for mortgage-backed securities. Unlike many of the Wall Street investment banks, A.I.G. didn’t specialize in pooling subprime mortgages into securities. Instead, it sold credit-default swaps.

These exotic instruments acted as a form of insurance for the securities. In effect, A.I.G. was saying if, by some remote chance (ha!) those mortgage-backed securities suffered losses, the company would be on the hook for the losses. And because A.I.G. had that AAA rating, when it sprinkled its holy water over those mortgage-backed securities, suddenly they had AAA ratings too. That was the ratings arbitrage. “It was a way to exploit the triple A rating,” said Robert J. Arvanitis, a former A.I.G. executive who has since become a leading A.I.G. critic.

Why would Wall Street and the banks go for this? Because it shifted the risk of default from themselves to A.I.G., and the AAA rating made the securities much easier to market. What was in it for A.I.G.? Lucrative fees, naturally. But it also saw the fees as risk-free money; surely it would never have to actually pay up. Like everyone else on Wall Street, A.I.G. operated on the belief that the underlying assets — housing — could only go up in price.

That foolhardy belief, in turn, led A.I.G. to commit several other stupid mistakes. When a company insures against, say, floods or earthquakes, it has to put money in reserve in case a flood happens. That’s why, as a rule, insurance companies are usually overcapitalized, with low debt ratios. But because credit-default swaps were not regulated, and were not even categorized as a traditional insurance product, A.I.G. didn’t have to put anything aside for losses. And it didn’t. Its leverage was more akin to an investment bank than an insurance company. So when housing prices started falling, and losses started piling up, it had no way to pay them off. Not understanding the real risk, the company grievously mispriced it.

Second, in many of its derivative contracts, A.I.G. included a provision that has since come back to haunt it. It agreed to something called “collateral triggers,” meaning that if certain events took place, like a ratings downgrade for either A.I.G. or the securities it was insuring, it would have to put up collateral against those securities. Again, the reasons it agreed to the collateral triggers was pure greed: it could get higher fees by including them. And again, it assumed that the triggers would never actually kick in and the provisions were therefore meaningless. Those collateral triggers have since cost A.I.G. many, many billions of dollars. Or, rather, they’ve cost American taxpayers billions.

The regulatory arbitrage was even seamier. A huge part of the company’s credit-default swap business was devised, quite simply, to allow banks to make their balance sheets look safer than they really were. Under a misguided set of international rules that took hold toward the end of the 1990s, banks were allowed use their own internal risk measurements to set their capital requirements. The less risky the assets, obviously, the lower the regulatory capital requirement.

How did banks get their risk measures low? It certainly wasn’t by owning less risky assets. Instead, they simply bought A.I.G.’s credit-default swaps. The swaps meant that the risk of loss was transferred to A.I.G., and the collateral triggers made the bank portfolios look absolutely risk-free. Which meant minimal capital requirements, which the banks all wanted so they could increase their leverage and buy yet more “risk-free” assets. This practice became especially rampant in Europe. That lack of capital is one of the reasons the European banks have been in such trouble since the crisis began.

At its peak, the A.I.G. credit-default business had a “notional value” of $450 billion, and as recently as September, it was still over $300 billion. (Notional value is the amount A.I.G. would owe if every one of its bets went to zero.) And unlike most Wall Street firms, it didn’t hedge its credit-default swaps; it bore the risk, which is what insurance companies do.

It’s not as if this was some Enron-esque secret, either. Everybody knew the capital requirements were being gamed, including the regulators. Indeed, A.I.G. openly labeled that part of the business as “regulatory capital.” That is how they, and their customers, thought of it.

There’s more, believe it or not. A.I.G. sold something called 2a-7 puts, which allowed money market funds to invest in risky bonds even though they are supposed to be holding only the safest commercial paper. How could they do this? A.I.G. agreed to buy back the bonds if they went bad. (Incredibly, the Securities and Exchange Commission went along with this.) A.I.G. had a securities lending program, in which it would lend securities to investors, like short-sellers, in return for cash collateral. What did it do with the money it received? Incredibly, it bought mortgage-backed securities. When the firms wanted their collateral back, it had sunk in value, thanks to A.I.G.’s foolish investment strategy. The practice has cost A.I.G. — oops, I mean American taxpayers — billions.

Here’s what is most infuriating: Here we are now, fully aware of how these scams worked. Yet for all practical purposes, the government has to keep them going. Indeed, that may be the single most important reason it can’t let A.I.G. fail. If the company defaulted, hundreds of billions of dollars’ worth of credit-default swaps would “blow up,” and all those European banks whose toxic assets are supposedly insured by A.I.G. would suddenly be sitting on immense losses. Their already shaky capital structures would be destroyed. A.I.G. helped create the illusion of regulatory capital with its swaps, and now the government has to actually back up those contracts with taxpayer money to keep the banks from collapsing. It would be funny if it weren’t so awful.

I asked Mr. Arvanitis, the former A.I.G. executive, if the company viewed what it had done during the bubble as a form of gaming the system. “Oh no,” he said, “they never thought of it as abuse. They thought of themselves as satisfying their customers.”

That’s either a remarkable example of the power of rationalization, or they were lying to themselves, figuring that when the house of cards finally fell, somebody else would have to clean it up.

That would be us, the taxpayers.

Thursday, March 5, 2009

Financial Meltdown Made Easy


For those of you wondering what the hell happened to the economy, here's an easy to understand way to understand the financial crisis and the pre-cursor, sub-prime lending.

The age of Crappy Loans
  • Banks made crappy loans to people to buy overpriced homes
  • Insurers insured these crappy loans
  • Banks repacked these crappy loans (since debts ARE ASSETS to a bank) and sold these as investment products
  • Countries are now BUYING back these crappy loans to prevent the financial system from collapse
  • In essense, we're buying crappy loans TWICE.
Crappy loans = Toxic Assets.

Problem is there's so many toxic assets AND insurance insuring these toxic assets that VALUE no longer exists.