Speaking dialects helps build rapport

Speaking dialects helps build rapport, even in business

Saturday, 21 March 2009

Bng S C

Perhaps we may wish to consider the role a dialect plays in building rapport and leading to business opportunities.

I refer to the Straits Times article, “Mandarin drive starts in the home”, on March 18, 2009.

When I was in secondary school, I agreed wholeheartedly (presciently, it appears) with MM Lee’s statement that with Mandarin, “We can connect with the whole of China and its 1.3 billion people. Dialects will confine us to our original village or town or at most, the province of our ancestors”. I even took that line of reasoning one step further – I thought that with English, I could connect with the whole of the English-speaking world. Mandarin, I thought, would confine me to China and its 1.3 billion people – a large percentage of whom would eventually learn to speak English anyway.

Along the way I realised, however, that I could not build rapport easily with English speakers who did not speak English my way, the Singaporean way.

In university, I made it a point to brush up my Mandarin. However, I discovered that I still could not build rapport easily with Mandarin speakers who did not speak Mandarin my way, the Singaporean way.

For that matter, many Mandarin speakers in China find it difficult to understand the Mandarin spoken by people from other provinces. Although the Chinese Government has made it mandatory for Mandarin to be taught in schools, Mandarin is still not the mother tongue for most Chinese - their hometown dialect is. Northerners find it hard to understand southerners and the Shanghainese often gleefully mix Shanghainese words and pronunciation into their Mandarin. Does this sound familiar?

Building rapport

Building rapport is the first step to developing the all-important Guanxi in China. Building rapport is about seeking common ground, about getting the other person to treat me as one of “Us” and not as “Others”. In China, it is prevalent for family-run SMEs to have one price for Us and another higher price for Others. It may be surprising for some that many Chinese do not consider the Chinese from other provinces as Us, but rather as Others. So whom will a Chinese consider as Us? Someone with a nexus to his hometown, perhaps. Someone who enjoys the same food and speaks the same dialect, perhaps.

We all like to feel like members of an elite fraternity, and sharing a common dialect, even if it does not open as many doors as a Masonic handshake, still does wonders in building rapport. Perhaps we may wish to consider the role a dialect plays in building rapport and leading to business opportunities. After all, as the Teochew say, “Ga ki nang, pa si bo xiang gan” (If you are one of Us, it does not matter even if we die for you).

Just look at the facts - the Cantonese-speaking Hongkong-ers have made many successful investments in the predominantly Cantonese-speaking Pearl River Delta of southern Guangdong Province , but do not have investments of a similar scale in north-eastern Guangdong Province , which is predominantly Teochew-speaking. Similarly, the Hokkien-speaking Taiwanese have made many successful investments in predominantly Hokkien-speaking southern Fujian Province, but do not have investments of a similar scale in northern Fujian Province , where the Min Bei dialect (which is mutually unintelligible with Hokkien) is prevalent. Can Singaporeans, who have been trained to speak Mandarin and not dialects, boast of a similar presence and as many successes investing in China?

The Hokkien spoken in Singapore is not the same as the Hokkien spoken in Taiwan or in Fujian Province . Nevertheless, speaking a variant of the dialect is often sufficient to build rapport – after all, it is a standing joke in Fujian Province that every village speaks a different variant of Hokkien from the next village across the mountain.

Leveraging on dialects

One does not have to be extremely proficient in a dialect to build rapport. From personal experience, it is sufficient to be able to conduct a simple conversation in a dialect to draw attention to the commonality of the ancestral homeland. Further negotiations can be carried out in Mandarin. I have oftentimes been able to leverage on my dialect to obtain better prices from Hokkien vendors than my non-Hokkien Chinese counterparts.

Furthermore, the use of dialects is not restricted to China. The Chinese Diaspora began long before Mandarin became the official dialect in China . As such, there are approximately 30 million Overseas Chinese, originally from Guangdong, Fujian and Hainan provinces , who may not be able to communicate fluently in Mandarin. It would not be a far stretch to assume that it would be easier to build rapport with an Overseas Chinese by speaking to him in his dialect, rather than struggling to carry on a conversation in Mandarin. This might prove difficult in two generations’ time, if, as MM Lee predicts, “Mandarin will become our mother tongue”.

With regard to Mr. Chee Hong Tat’s comment that “it would be stupid… to advocate the learning of dialects, which must be at the expense of English and Mandarin”, I would like to introduce him to some Malaysian Chinese friends of mine. Speak to a Malaysian Chinese, and chances are, she can speak English, Mandarin, Malay, Cantonese and Hokkien well enough to carry on a conversation in all of the abovementioned languages. As MM Lee rightly pointed out, English and Mandarin are two “manifestly different languages”. The dialects that we are referring to, however, are merely spoken variants of the Chinese language. Surely, learning to speak a dialect must be easier than to learn Malay along with English and Mandarin?

I agree with Ong Siew Chey’s letter on March 19, 2009 that “in spite of our claim of being bilingual, some of us are actually non-lingual, hovering between Singlish and substandard Mandarin.” The Speak Mandarin Campaign started 30 years ago. If Singaporeans, after 30 years of the Speak Mandarin Campaign, are still “non-lingual”, can anyone be certain that not speaking dialects is really the cure for “non-lingualism”?

In 2005, I had the pleasure of meeting Mr. Robert Kuok, the “Sugar King of Asia”, together with a delegation of NUS students. Mr. Kuok (then a sprightly 82 year-old multi-billionaire) took the effort to greet us individually when we first met. Upon hearing our surnames, he would first make guesses at our dialect groups, and greet us with a few words in each of our own dialects. This left a deep impression on me, and I hope that one day, with proper training, my “5GB” brain would be able to replicate that feat.

However, I understand that I should not be too hard on myself if I cannot learn to speak several dialects. After all, Mr. Robert Kuok’s unique. He’s Malaysian.

http://forums.delphiforums.com/sunkopitiam/messages?msg=24718.1

MM Lee's mandarinate system

MM Lee’s “mandarinate” system is the real scourge of multi-party politics in Singapore

At the launch of an alumni complex at the National University of Singapore (NUS) last night, Minister Mentor Lee Kuan Yew said he did not believe the country with its small population could sustain a two-party system as the PAP already has ‘to scour the whole country to find the quality we now have’. (read rest of article here)

‘You need character, commitment, drive and (the) ability to connect with people. It’s a very tough job.’ he said.

Mr Lee’s statement is inherently flawed in two aspects:

1. There is no correlation between the population of a country and its political system, be it a one party or two party state. Denmark, Finland, New Zealand and Luxembourg are examples of countries with a small population comparable to Singapore which have two or more political parties in their Parliament.

2. Why does the PAP have to “scour the whole country” to find people to run for public office? In a truly democratic country, citizens with a passion to serve the people will step foward to offer themselves as candidates to stand for elections under the banner of any political parties.

The quandrary which the PAP finds itself in now is largely a creation of its own. Its heavy-handedness in squashing political dissent against its rule through the liberal use of defamation law suits and security apparatus over the years had backfired upon itself.

Singaporeans are generally fearful and adverse to politics. Bright young men and women would rather spend time to advance their careers and to accure material possessions than to dirty their hands in the political arena.

That is why both the opposition and the PAP are finding it increasingly difficult in recent times to recruit qualified people into their ranks in spite Singapore having one of the highest literacy rate in the world.

Though our population is small, over 50% of our citizens have either a degree or diploma. Why are they not keen to join politics?

The main stumbling block to the growth and development of an active citizenry and multi-politics in Singapore lies in the “mandarinate” system being propagated and perpetuated by none other than MM Lee himself.

Under the “mandarinate” system of the feudal Qing dynasty in China, the ultimate seat of power lies with the Emperor who used his court officials or mandarins to govern his dominion.

The PAP itself is one such entity tightly controlled under the thumb of one man. PAP MPs are merely “mandarins” of the system. They are there to serve the interests of the party and to execute the orders of the “Emperor”.

In a real political party which practises democracy, any cadre within its rank will have the opportunity to get a shot at the top post. The PAP has no lack of capable leaders. Why is its top echelon still dominated by members of a particular family even after 50 years in power?

Singapore is full of talented people in all professions be it law, medicine, engineering or finance. Who is willing to join a party only to follow orders blindly from the top and not given the freedom and opportunity to fully display one’s capability and to implement one’s ideas and initiatives?

We do not have to look too far away for answers to our predicament. Just put the performance of the 82 PAP MPs in Parliament under scrutiny. Are they the real “quality” as proclaimed so proudly by MM Lee that Singapore has to offer?

Unless the PAP reform itself and allow its cadres more say in the party’s decision making process, it has to be contented with “second division mediocrity” because first world talents are leaders in their own right. They are born to lead, not to follow and obey.

The selfish ambitions of one man has stymized the emergence of a real, vibrant and rigorous parliamentary democracy in Singapore for decades because he doesn’t like dissenting voices to challenge him. He wants to rule as he pleases without any questioning or resistance. All his colleagues and subordinates are merely musicians in an orchestra to play the tune according to his wishes.

Singapore has enough talent to form not only two, but three or more political parties to ensure adequate representation of the aspirations of all Singaporeans in Parliament.

MM Lee can take the following measures to solve the dilemma he is in:

1. Abolish the GRC system and allow one to one contests in all 84 wards in Singapore.

2. Refrain from using defamation lawsuits to cripple the PAP’s opponents and if there is a need to use them, to limit the damages to less than $10,000.

3. Allow the media complete freedom to report on domestic politics without any interference.

There are many more urgent reforms to undertake to dismantle the PAP’s “mandarinate” system, but for a start, implementing the above three measures will greatly level the playing field and allow for the emergence of a strong alternative party or coalition to give the PAP a run for its money.

Does MM Lee still have the fire in his belly to fight a real political battle at his age? Or is he contented to hide behind the charade of his party to continue ruling Singapore like his personal fiefdom?

http://forums.delphiforums.com/sunkopitiam/messages?msg=24717.1

Minister to table Public Order Bill

Home Affairs Minister to table Public Order Bill in Parliament

Saturday, 21 March 2009

When Parliament sits on Monday, Home Affairs Minister, Wong Kan Seng, will table the Public Order Bill. The law could give the police powers to prevent protesters from gathering at places like Parliament House and the Istana, and to compel them to ‘move on’.

Another bill on the agenda is the Human Organ Transplant Act’s amendment Bill. The Bill, if passed, will allow organ donors to be compensated for their time and costs. It will also provide reimbursement for any possible future health problems related to their organ donation.

The Films Act, too, will be on the agenda as the Government seeks to amend the Act to liberalise the ban on “party political films”. Live recordings of election rallies or public speeches will no longer be considered ‘party political films’, provided the events are held in accordance with the law.

Here are some of the other questions which MPs have tabled to be answered in Parliament. For the full list, please click here.

Ms Sylvia Lim: To ask the Prime Minister whether he has appointed the Electoral Boundaries Review Committee and, if not, whether he intends to do so within the next 3 months.

Ms Sylvia Lim: To ask the Minister for Finance (a) how the 25% fall in overall portfolio value from its peak is distributed over the different asset classes held by the Government of Singapore Investment Corporation; and (b) whether there is any form of accountability for fund managers who invested “too early” in failing banks.

Ms Ellen Lee Geck Hoon: To ask the Minister for Health in view of the economic recession where more people especially the matured/older Singaporeans are affected by unemployment or retrenchment (a) whether the Government will consider relaxing the rules for application to MediFund; and (b) whether successful applicants will be able to receive financial assistance to pay their hospital bills fully.

Mr Inderjit Singh: To ask the Minister for Trade and Industry (a) what are the terms of the $300 million loan provided by the Government to Micron Technologies; (b) what are the risks of this loan and are there terms and conditions which benefit Singapore; (c) whether this loan was disbursed through any of the banks in Singapore or was it a direct loan from the Government; and (d) whether the Government is now prepared to give direct loans to companies instead of sharing risks with banks.

Dr Ong Seh Hong: To ask the Minister for Education (a) whether the Ministry tracks the educational performance and psychological well-being of undergraduates on scholarship; (b) what are the numbers of undergraduates who have lost their scholarships over the last 10 years; and (c) whether counselling was provided to these undergraduates who had lost their scholarships, to help them cope financially and psychologically.

Mr Lim Biow Chuan: To ask the Minister for Finance (a) whether he will explain the steps taken by Temasek Holdings to find a replacement CEO; and (b) whether any Singaporeans were considered for the position.

Ms Sylvia Lim: To ask the Minister for Finance why the Civil Service’s hiring practice of restricting access to state secrets to Singaporeans is not applied to Temasek Holdings.

Mdm Cynthia Phua: To ask the Minister for Health why a Government hospital has no flexibility to waive the medical fee of a Dutch national who sustained injuries arising from his exemplary deed to save a drowning woman.

http://forums.delphiforums.com/sunkopitiam/messages?msg=24714.1

Lee Kuan Yew Pictures Singapore's Outlook in 25 Years

Lee Kuan Yew Pictures Singapore's Outlook in 25 Years
2009-03-21 02:06:36 Xinhua Web Editor: Zhu Jin

Singapore in 25 years will reflect the state of the major economic, technological and military powers, Singapore's Minister Mentor Lee Kuan Yew said on Friday evening.

During a dialogue, "Singapore and Singaporeans, a Quarter century from now", which was held at the newly opened Alumni Complex at the National University of Singapore, Lee said that Singapore exists within the world and regional context.

Lee pictured the future of the world to be somewhere in between of "optimistic and pessimistic scenarios."

He said that the optimistic scenario of the world might be big powers at peace with each other and prosperity throughout the world, while the pessimistic scenarios could be increased tensions and insecurity among big powers and the emerging of regional economic areas.

He said Singapore in 25 years will be "more cosmopolitan" because the country has got many people from China, India, Malaysia and from the region.

Lee added that Singapore will need more talents in the future to remain competitive, adding that Singapore will need to offer more opportunities and reward talents equally.

Talking about the current economic crisis, Lee said that Singapore is an export dependent country, the optimistic scenario for Singapore is in two or three years to be out of the crisis, and the worst could be four, five or six years.

http://forums.delphiforums.com/sunkopitiam/messages?msg=24712.1

Singapore needs foreigners for economic survival

Singapore needs foreigners for economic survival

SINGAPORE (AFP) — Singapore, which is facing its worst recession in history, needs foreigners to survive in the long-term, founding father Lee Kuan Yew said.

The city-state is not reproducing itself fast enough and the government has in recent years opened its doors to attract more talented migrants to avert a serious population shortage.

"Without new citizens and permanent residents, we are going to be 'The Last of the Mohicans'. We will disappear," Lee, 85, told an audience at a local university late Friday.

Lee is the country's first prime minister and remains an influential figure. He is an adviser in his son Prime Minister Lee Hsien Loong's cabinet with the title minister mentor.

Singapore needs a fertility rate of 2.1 babies per woman to maintain its population naturally but a string of incentives including monetary ones to encourage Singaporeans to have babies has failed to make an impact.

A report released this month by the Department of Statistics showed 39,935 babies were born in 2008, well short of the 60,000 births the country needs each year.

Singapore has a population of 4.84 million, including about one million foreigners who work in the country and their families.

The local economy is projected to shrink by up to 5.0 percent in 2009 and the elder Lee told the audience at the university it may take up to six years to recover in a worse-case scenario.

In a sign of how tough times are, Singaporeans trained as engineers are looking for jobs such as bus drivers once shunned by locals, The Straits Times reported Saturday.

http://forums.delphiforums.com/sunkopitiam/messages?msg=24713.1

Singapore newspapers censor PM's BBC interview

Singapore newspapers censor PM's BBC interview

It’s amusing to see the Singapore newspapers have not run the complete BBC interview with Prime Minister Lee Hsien Loong. The broadsheet Straits Times and the freesheet Today have not published the last question asked in the interview, which can be heard in a five-and-a-half-minute audio clip on the BBC World Service website.

The interviewer said: “Finally, Prime Minister, I read that you are apparently the highest paid head of government in the world. Your salary is about four or five times what President Obama gets. Are you worth all that money?”

PM Lee laughed and said: “I am not comparing myself and I don’t look at these rankings.We go on a system which is open, honest, transparent – what is the job worth, what is the quality of the person whom you want. We need the best people for the job and these are jobs where you make decisions which are worth billions of dollars. And you cannot do that if you are pretending and you just say, ‘Well, we are all in it for the love of King and Country’. We want it to be honest, we want people not to come in for the money. But at the same time the sacrifice cannot be too great. And at times like these, you want the best possible government you can have.”

Why on earth did the Straits Times and Today censor the Prime Minister’s interview?

The Prime Minister did not hesitate to answer the question.

So why did the Singapore newspapers not run the question and the answer?

It looks silly because people visiting the BBC World Service website are likely to come across the interview and discover that the Singapore media are still censoring the news.

http://forums.delphiforums.com/sunkopitiam/messages?msg=24777.1

The hole just gets deeper

The hole just gets deeper

SINGAPORE - GST hike, raised utility bills, HDB flats at unaffordable prices, hefty healthcare bills and raised transport fees - all of which are common gripes regarding the relentless cost of living in Singapore. It doesn’t take a rocket scientist to figure out that Singapore is an expensive place to retire in.

And our government is waking up to the reality, and have proposed measures. One proposed solution is to exhort Singaporeans to retire in overseas destinations where costs of living are lower. Our government has actually sent teams to survey potential sites slated to host retirement villages in Batam and Johor Baru (JB). And Mr Khaw Boon Wan has recently jumped on the bandwagon with his suggestion that aging Singaporeans can retire in JB. However, what the government may not realize is that this is a short-term solution that can snowball into a glut of unwanted scenarios.

The fact is that in reality, Singaporeans do want to retire overseas. The Tsao foundation conducted a survey in which 300 Singaporeans aged between 21 to 55 were queried on their retirement plans. The results? A staggering two-thirds of the respondents cited that they want to retire overseas, with Australia and Malaysia being popular destinations. The reasons? A slower pace of life and lower costs of living.

What the government does not realize is that in encouraging Singaporeans to retire overseas, it is also an indirect, albeit unconsious endorsement of migration to retiree-friendly pastures. And when Singaporeans migrate, this is not a good thing as far as our government is concerned. Why is this so?

For one, the healthcare system may see an oversupply of doctors. Aging Singaporeans form a substantial customer base for our healthcare providers. And a while ago, the list of recognized medical degrees qualifying medical graduates for practising licenses has expanded in a move to expand the supply of doctors. The demand-supply dynamics will obviously be affected should a significant customer base be eroded.

If that is not enough, it may not be a rosy scenario for the government body charged with handling our Central Provident Funds (CPF). The current policies dictate that Singaporeans can withdraw part of their CPF savings save for a certain amount set aside in what is known as the CPF Minimum Sum when they are 55 years old. If the latter stays in Singapore or West Malaysia, a monthly payment will be given from their Minimum Sum to meet their retirement needs. By 2013, the Minimum Sum will be set at $120,000. Unsurprisingly, this leads to the perception that the government is implementing measures that make the withdrawal of CPF even harder.

However, the equation changes when Singaporeans migrate to destinations other than West Malaysia, giving up their citizenship in the process. And why not? After all, citizens in some of these countries benefit from retiree-friendly policies such as pension schemes, access to basic services and others. Combined with the withdrawal of their entire CPF savings, they are enjoying the best of both worlds. However, the government body charged with handling our CPF wouldn’t dare contemplate the scenario of a massive CPF payout to a huge influx of migrated “Singaporeans”.

And this might be a concern to the ones who run Temasek Holdings and Singapore Government Investment Corporation since our CPF was said to be a source of funds for their investments.

If that is not enough, our friends at the Housing Development Board (HDB) will have to deal another headache - the oversupply of HDB flats. It is not unusual for Singaporeans who are retiring overseas to sell their HDB flats. This would simply jack up the supply side of our housing equation, and could pose a potential problem for HDB.

Undoubtedly, the costs of living brought about by inflation has burned a hole in our pockets. However, the hole in our pockets cannot be compared with the deeper hole our government may have dug with its suggested measure in the form of doctor and public housing oversupply, and massive CPF payouts.

http://forums.delphiforums.com/sunkopitiam/messages?msg=24926.1

In God we trust but apparently you cannot trust the USA

In God we trust but apparently you cannot trust the USA

Never forget that the US President was elected by the Americans to protect, develop, and act on behalf of the American people and the US economy, for the benefit of the American people. The Americans did not elect a President of the World.

When the US dollar crashes, the whole world suffers together with the USA.

When crude oil prices escalate, the whole world suffers together with the USA but the USA benefits from an increase in the value of the US Dollars.

Crude oil is priced in US dollars. The latest figure for crude oil reserves is 1,342.207 billion barrels (excluding Natural gas) (from http://www.eia.doe.gov/emeu/international/reserves.html)

With every $1 increase in the price of crude oil, the store of US dollars goes up an additional 1,342.207 billion.

As long as Crude Oil is priced in US dollars, the value of the said currency cannot fall by too much, if the price of crude oil increases, when the USA prints more money like there is no tomorrow. They call it quantitative easing.

For if the other countries do likewise, print money like the USA, they will suffer with the fall of their currencies because crude oil is not priced in their currency but in US dollars.

If China and Russia gangs up against the US, we will be looking at WWIII and the US dollar will rocket because of flight to quality, safe-haven plays.

Really, there is “no answer” to the USA printing money to benefit their economy at the expense of the whole world, if you consider hyper-inflation as “no-answer”. Hyper-inflation would be the only thing that will stop the US from the recklessness.

I truly wonder if a country that brought the world to its knees with their reckless banks lending to sub-prime people and then securitizing the sub-prime debts; a country with banks like that, can be depended upon to behave prudently in fear of causing hyper-inflation.

The markets are not going to be caught with their pants down. The markets will not judge. The markets do not care if hyper-inflation will destroy mankind as we know it. The markets are only looking at how to profit from this scenario.

I suggest you do the same and plan for it so that your pants are not down when the curtains open.

http://forums.delphiforums.com/sunkopitiam/messages?msg=25104.1

President Barack Obama on 'The Tonight Show with Jay Leno'

March 20, 2009
Transcript
President Barack Obama on ‘The Tonight Show with Jay Leno’

The following is a transcript of President Obama's interview on NBC's "The Tonight Show With Jay Leno," as provided by the White House.

JAY LENO The 44th President of the United States, please welcome President Barack Obama. (Applause.)

PRESIDENT OBAMA: Thank you. (Applause.)

MR. LENO. Good to see you.

MR. OBAMA: It is good to see you and –- (applause.) Thank you. Let me just say, I think Kevin looks good in a suit. (Laughter.)

MR. LENO. Thank you, sir.

MR. OBAMA: He looks a little like Secret Service. (Laughter.)

MR. LENO: He does, doesn't he? Yes. And you're the only guy who can get him to wear it. (Laughter.)

Now, you know, it's funny, because the last time you were here, you walked in, you had your jacket on your finger and you had the two guys with you.

MR. OBAMA: Right.

MR. LENO: And that was it. Big change?

MR. OBAMA: You know, I was mentioning earlier, we landed yesterday and then –- this is an example of life in the bubble. We landed at the fairground down in Costa Mesa. And I see the fairground where I think we're having this town hall and I said, well, why don't we walk over there? Secret Service says, no, sir, it's 750 yards. (Laughter.)

So I was trying to calculate –- well, that's like a five-minute walk? "Yes, sir. Sorry." (Laughter.)

Now, they let me walk on the way back. But, you know, the doctor is behind me with the defibrillator. (Laughter.)

MR. LENO: Wow.

MR. OBAMA: Michelle jokes about how our motorcade –- you know, we've got the ambulance and then the caboose and then the dog sled. (Laughter.) The submarine. (Laughter.) There's a whole bunch of stuff going on.

MR. LENO: Now it's only, what, 59 days now, right?

MR. OBAMA: Yes, 59 days.

MR. LENO: And so much scrutiny. Is it fair to judge so quickly? I mean –-

MR. OBAMA: Well, look, we are going through a difficult time. I welcome the challenge. You know, I ran for President because I thought we needed big changes. I do think in Washington it's a little bit like "American Idol," except everybody is Simon Cowell. (Laughter.)

MR. LENO: Wow. Wow. That's rough. (Applause.)

MR. OBAMA: Everybody's got an opinion. But that's part of what makes for a democracy. You know, it's contentious and people are hitting back.

I do think, though, that the American people are all in a place where they understand it took us a while to get into this mess, it's going to take a while for us to get out of it. And if they have confidence that I'm making steps to deal with issues like health care and energy and education, that matter deeply to their daily lives, then I think they're going to give us some time. (Applause.)

MR. LENO: Let me ask you about this. I know you are angry –- because, you know, doing what I do, you kind of study body language a little bit. And you looked very angry about these bonuses. Actually, stunned.

MR. OBAMA: Stunned. "Stunned" is the word.

MR. LENO: Tell people what happened. I know people have been over it, just –-

MR. OBAMA: Well, look, here's what happened. You've got a company, AIG, which used to be just a regular, old insurance company. Then they insured a whole bunch of stuff and they were very profitable and it was a good, solid company.

Then they decided –- some smart person decided, let's put a hedge fund on top of the insurance company and let's sell these derivative products to banks all around the world –- which are basically guarantees or insurance policies on all these sub-prime mortgages.

And this smart person said, you know, none of these things are going to go bust; this sub-prime thing, it's a great deal, you can make a lot of profit. So they sold a whole bunch of them –- billions and billions of dollars. And what happened is, is that when people started going bust on sub-prime mortgages you had $30 worth of debt on every dollar worth of mortgage –- and the whole house of cards just started falling down.

So the problem with AIG was that it owed so much and was tangled up with so many banks and institutions that if you had allowed it to just liquidate, to go into bankruptcy, it could have brought the whole financial system down. So it was the right thing to do to intervene in AIG.

Now, the question is, who in their right mind, when your company is going bust, decides we're going to be paying a whole bunch of bonuses to people? And that, I think, speaks to a broader culture that existed on Wall Street, where I think people just had this general attitude of entitlement, where, we must be the best and the brightest, we deserve $10 million or $50 million or $100 million dollar payouts

MR. LENO: Right.

MR. OBAMA: And, you know, the immediate bonuses that went to AIG are a problem. But the larger problem is we've got to get back to an attitude where people know enough is enough, and people have a sense of responsibility and they understand that their actions are going to have an impact on everybody. And if we can get back to those values that built America, then I think we're going to be okay.

(Applause.) MR. LENO: Well, you know, it’s interesting, when you said -– it's, like, I had to laugh the other day when the CEO of AIG said, okay, I've asked them to give half the bonuses back. Now, if you rob a bank and you go into court –- (laughter) –- and you go, Your Honor, I'm going to give you half the money back. (Laughter.) And they seem stunned that we’re not jumping at this wonderful offer.

MR. OBAMA: Well, you know, the only place I think that might work is in Hollywood. (Laughter.)

MR. LENO: Let me ask you this. Now, I heard them say, well, one of the problems is it's contractual and if we don't pay these bonuses, well, they can sue us. All the time people say, so sue me.

MR. OBAMA: So sue me, right.

MR. LENO: I mean, the federal government is in debt a trillion dollars. We're broke -- sue us. Sue me. (Laughter and applause.)

MR. OBAMA: In fairness, I think that part of the calculation they were making was the way the contracts were written said, if you don't pay us immediately, then we can claim three times as much as we were owed under the bonuses. And so they were making a legal calculation, and their legal judgment was not necessarily wrong.

But there's a moral and an ethical aspect to this, as well. And I think that's what has gotten everybody so fired up. The main thing –- we’re going to do everything we can to see if we can get these bonuses back. But I think the most important thing that we can do is make sure that we put in a bunch of financial regulatory mechanisms to prevent companies like an AIG holding the rest of us hostage. Because that's –- that's the real problem.

The problem is not just what's happened over the last six months. The problem is what was happening for years, where people were able to take huge, excessive risks with other people's money, putting the entire financial system at risk –- and there were no checks, there were no balances, there was nobody overseeing the process.

And so what we're going to be moving very aggressively on –- even as we try to fix the current mess –- is make sure that before somebody makes a bad bet you say, hold on, you can't do that.

MR. LENO: Well, here's something that kind of scared me. Today they passed this thing that says we're going to tax 90 percent of these bonuses. And the part that scares me is, I mean, you're a good guy –- if the government decides they don't like a guy, all of a sudden, hey, we’re going to tax you and then, boom, and it passes. I mean, that seems a little scary as a taxpayer, they can just decide –- you want to take a break and answer that when we come back? Okay, hold that answer.

MR. OBAMA: I will. I've got a good answer, too. (Applause.)

MR. LENO: Welcome back. We are talking with President Barack Obama.

Before the break I mentioned that they had just passed this new bill which will tax them 90 percent -- and I said it was frightening to me as an American that Congress, whoever, could decide, I don't like that group, let's pass a law and tax them at 90 percent.

MR. OBAMA: Well, look, I understand Congress' frustrations, and they're responding to, I think, everybody's anger. But I think that the best way to handle this is to make sure that you've closed the door before the horse gets out of the barn. And what happened here was the money has already gone out and people are scrambling to try to find ways to get back at them.

The change I'd like to see in terms of tax policy is that we have a system, going back to where we were back in the 1990s, where you and I who are doing pretty well pay a little bit more to pay for health care, to pay for energy, to make sure that kids can go to college who aren't as fortunate as our -- as my kids might be. Those are the kinds of measured steps that we can take. But the important thing over the next several months is making sure that we don't lurch from thing to thing, but we try to make steady progress, build a foundation for long-term economic growth. That's what I think the American people expect. (Applause.)

MR. LENO: I just read today about Merrill Lynch. They handed out $3.6 billion -- it's not even million anymore, it's billions in bonuses. I know it would make me feel good -- shouldn't somebody go to jail?

(Laughter and applause.) I say that because I watch those people in New York, even people who had lost everything -- when Bernard Madoff went to jail, at least they felt they got something.

MR. OBAMA: Right. They got some satisfaction. Here's the dirty little secret, though. Most of the stuff that got us into trouble was perfectly legal. And that is a sign of how much we've got to change our laws -- right? We were talking earlier about credit cards, and it's legal to charge somebody 30 percent on their credit card, and charge fees and so forth that people don't always know what they're getting into. So the answer is to deal with those laws in a way that gives the average consumer a break.

When you buy a toaster, if it explodes in your face there's a law that says your toasters need to be safe. But when you get a credit card, or you get a mortgage, there's no law on the books that says if that explodes in your face financially, somehow you're going to be protected.

So this is -- the need for getting back to some common sense regulations -- there's nothing wrong with innovation in the financial markets. We want people to be successful; we want people to be able to make a profit. Banks are critical to our economy and we want credit to flow again. But we just want to make sure that there's enough regulatory common sense in place that ordinary Americans aren't taken advantage of, and taxpayers, after the fact, aren't taken advantage of. (Applause.)

MR. LENO: Yes -- because when I was a kid, we would -- banks or credit cards would lend you money so you would pay it back. Now they lend you money so you can't pay it back. (Laughter.) It's like we were talking before, I mentioned we all saw A Wonderful Life -- Mr. Potter, the meanest man -- remember he owned the whole town? You know what he charged on a mortgage? Two percent. (Laughter.)

MR. OBAMA: He's like Mother Teresa now. (Laughter.)

MR. LENO: Like Mother Teresa now. (Laughter.) He makes VISA look like ohhhh --

MR. OBAMA: Well, and part of what happened over the last 15, 20 years is that so much money was made in finance that about 40 percent, I think, of our overall growth, our overall economic growth was in the financial sector. Well, now what we're finding out is a lot of that growth wasn't real. It was paper money, paper profits on the books, but it could be easily wiped out.

And what we need is steady growth; we need young people, instead of -- a smart kid coming out of school, instead of wanting to be an investment banker, we need them to decide they want to be an engineer, they want to be a scientist, they want to be a doctor or a teacher.

And if we're rewarding those kinds of things that actually contribute to making things and making people's lives better, that's going to put our economy on solid footing. We won't have this kind of bubble-and-bust economy that we've gotten so caught up in for the last several years.

MR. LENO: Now, Treasury Secretary Geithner, he seems to be taking a little bit of heat here. How is he holding up with this? He seems like a smart guy --

MR. OBAMA: He is a smart guy and he's a calm and steady guy. I don't think people fully appreciate the plate that was handed him. This guy has not just a banking crisis; he's got the worst recession since the Great Depression, he's got an auto industry on -- that has been on the verge of collapse. We've got to figure out how to coordinate with other countries internationally. He's got to deal with me; he's got to deal with Congress. And he's doing it with grace and good humor. And he understands that he's on the hot seat, but I actually think that he is taking the right steps, and we're going to have our economy back on the move.

MR. LENO: Now, see, I love that it's all his problem. (Laughter.)

MR. OBAMA: No, no, no --

MR. LENO: -- I mean, when he came in you probably said, hey, this is not a problem. Now, it's, hey, you got this, you got that, hey, good luck. (Laughter.)

MR. OBAMA: No, no, but this is the point that I made, I think two days ago, when somebody asked, well, do you have confidence in Tim Geithner. I said, look, I'm the president, so ultimately all this stuff is my responsibility. If I'm not giving him the tools that he needs to make sure that we're moving things forward, then people need to look at me.

On the AIG thing, all these contracts were written well before I took office, but ultimately I'm now the guy who's responsible to fix it. And one of the things that I'm trying to break is a pattern in Washington where everybody is always looking for somebody else to blame. And I think Geithner is doing an outstanding job. I think that we have a big mess on our hands. It's not going to be solved immediately, but it is going to get solved. And the key thing is for everybody just to stay focused on doing the job instead of trying to figure out who you can pass blame on to.

MR. LENO: Well, when will the money -- this money was given out to the banks. I would have thought by this time it would have sort of trickled down to Main Street, to people wanting to get loans -- I mean, it all went out there months and months ago. Where is it?

MR. OBAMA: Well, what's happening is a lot of these banks are keeping it in the bank because their balance sheets had gotten so bad that they decided, you know what, for us to stay solvent we need to maintain certain capital ratios; we've got to have a certain amount of capital in the bank -- and they haven't started lending it yet. And that's why what we've got to do -- right now what we're doing is essentially doing a diagnostic test -- trying to use some auto language here so you -- (laughter) -- we're doing a diagnostic on each of the banks, figuring out what are their capital levels? Can they sustain lending? And then I think we're going to separate out -- those banks that are in good shape, we're going to say to them, all right, you're on your own; go start lending again. Those banks that still have problems, we'll do a little more intervention to try to clean some of those toxic assets off their books.

But I actually have confidence that we'll get that done. In the meantime, we're taking a lot of steps to, for example, opening up -- open up separate credit lines outside of banks for small businesses so that they can get credit -- because there are a lot of small businesses out here who are just barely hanging on. Their credit lines are starting to be cut. We're trying to set up a securitized market for student loans and auto loans outside of the banking system. So there are other ways of getting credit flowing again.

But that's why we've got to solve the banking problem and we've got to solve issues like health care, energy, and education that will put us on a pathway for long-term economic growth.

MR. LENO: We're going to take a break. When we come back I want to ask you what we can do -- (applause) -- all right, we'll take a break. We'll be right back.

MR. LENO: Welcome back. Talking with President Barack Obama. So I was going to ask you before we went to the break. So you have –- obviously we have a lot of people with a few dollars -- couple of hundred, couple of thousand -- but there's millions of them. Okay, obviously that's a tremendous financial forest. What should they do? Put their money in the bank? Should they be spending money? Should they hide it under their mattress?

MR. OBAMA: Look, first of all, everybody should have complete confidence in the banks. They're deposits are protected.

They shouldn't be putting it in their mattresses. I will leave it up to others to provide individual, personal financial advice.

But I will say this, that if you're working right now, obviously you've got to be prudent and you've got to recognize that the economy has been in a tough way. But, you know, we’ve still got kids who are going to need a coat for winter or a computer for school. You know, that young family is still going to at some point need to buy a house. And right now cars, for example, we know that typically you need about 14 million cars for this population –- and right now only 9 million are being sold every year. So at some point those inventories are going to run down and people are going to start buying cars again.

So, you know, what people should not do is forget that what has built America has always been a faith and a confidence in the future.

And our future is bright if we take some smart steps right now. And that's what we're working on in Washington. And I think if everybody stays focused on getting through these tough times, the future is going to be very bright for all of us.

MR. LENO: Now, you mentioned cars a minute ago. You went to the electric car, you went to look at some batteries today.

MR. OBAMA: I did. It's spectacular what is being down now with plug-in hybrids, where not only are you getting the hybrid technology, but now you can plug it in at home in your garage. And potentially we could see cars getting 150 miles to a gallon of gas.

And when you get home you could potentially sell the energy in your car back into the grid, back to your utility and get money.

So we’re going to be investing billions of dollars in research and development around these technologies. I know that you were mentioning you've got a hydrogen car –-

MR. LENO: I've got the GM hydrogen car. That's a whole new --

MR. OBAMA: That's a whole new level of technology. That's what's going to create the auto industry of the future. That's where we're going to win back manufacturing. But right now we’re behind.

These batteries are being made in Japan –- just like wind power is being made in Europe. We need to bring that here, and that's part of what my budget and part of what our Recovery Act is all about.

MR. LENO: Let me ask you some personal things. Now, how cool is it to fly in Air Force One? (Laughter.)

MR. OBAMA: Now, let me tell you, I personally think it's pretty cool. Especially because they give you, you know, the jacket with the seal on it. (Laughter.)

MR. LENO: Oh, yeah. See, I still get the little wings when I fly.

MR. OBAMA: So you have the jacket. I will tell you, though, Malia and Sasha, my daughters, they're just not as impressed. The first time we went on Marine One -– right, you've got the Marines in front and they're saluting you. And we go up and we're passing the Washington Monument, circling around on the way to Camp David –- and Sasha looks over and she says, "Are those Starbursts?" (Laughter.) There's, like, the candy in the little canister. (Laughter.) That's –- "Can we have some?" (Laughter.)

So they're splitting up the Starbursts and we're flying over the Lincoln Memorial. So they got a whole 'nother level of cool. (Laughter.)

MR. LENO: Now, are they going to put a basketball –- I imagine the bowling alley has been just burned and closed down.

MR. OBAMA: No, no. I have been practicing all –- (laughter.)

MR. LENO: Really? Really?

MR. OBAMA: I bowled a 129. (Laughter and applause.)

MR. LENO: No, that's very good. Yes. That's very good, Mr. President.

MR. OBAMA: It's like -- it was like Special Olympics, or something. (Laughter.)

MR. LENO: No, that's very good.

MR. OBAMA: No, listen, I'm making progress on the bowling, yes.

MR. LENO: And how about, are you going to put in a basketball court?

MR. OBAMA: Oh, yes. Yes. Well, we have a basketball court already at Camp David. We just had a little rim that was inadequate

–- (laughter) –- at the White House. But there are tennis courts, so we’re going to just get those –- you know, those rims that you can roll in and out. And then we’ll just put them on either –-

MR. LENO: Let me ask you, when people –- Mr. President, would you like to play? Yes, I would. Do they throw the game? Come on. (Laughter and applause.)

MR. OBAMA: I don’t see why they would throw the game -- except for all those Secret Service guys with guns around. (Laughter.)

MR. LENO: Yes, exactly.

MR. OBAMA: I will say that I don't think I get the hard fouls that I used to. Usually I don't –-

MR. LENO: Yes, Reggie goes, ohhh, I missed, ohhh. (Laughter.)

MR. OBAMA: Reggie doesn't do that. This is Reggie Love, my assistant. He played for Duke, very competitive guy. He doesn't let me win because, as he pointed out, if you lose to Obama you never hear the end of it. (Laughter.)

MR. LENO: See, there you go. Now, have you picked a final four?

MR. OBAMA: I did.

MR. LENO: Okay. How about your final one, who do you got?

MR. OBAMA: I got North Carolina Tar Heels. (Applause.)

MR. LENO: North Carolina.

MR. OBAMA: I think I got –- I got a hard time from Reggie, because he played at Duke, and you know, Coach K, being competitive, I think was a little –- you know, pushed back a little bit today. And I understand that. That's what you want. You want everybody to be competitive. I think these are all great teams.

MR. LENO: Like, do you look at the whole picture when you do that? For example, isn’t that a swing state? (Laughter and applause.) I'm just saying, are you looking at the whole picture when you pick?

MR. OBAMA: I mean, the fact that teams from North Carolina, Indiana, Iowa, all seem to do well in my bracket –- (laughter) –- I think is a complete coincidence. Absolutely.

MR. LENO: All right, one last question. Now, when is the dog coming? I keep hearing about the dog. It seems to me –- when was the dog supposed to be there by? I thought it was, like, as soon as --

MR. OBAMA: Listen, this is Washington –- (laughter) –- that was a campaign promise. (Laughter.)

MR. LENO: Oh, wow. Wow. Man. (Laughter and applause.)

MR. OBAMA: I'm teasing. The dog will be there shortly. (Laughter.)

MR. LENO: How soon?

MR. OBAMA: We have actually sort of been laying the groundwork here. We’ve got a trip, I've got to go to the NATO summit. When we get back, dog will be in place.

MR. LENO: Wow. And it's, what, a Portuguese water head? (Laughter.) What is it, what kind of dog is it?

MR. OBAMA: It's not that. (Laughter.)

MR. LENO: It's not that.

MR. OBAMA: It's not a "water head." (Laughter.)

MR. LENO: Whatever they are, I don't know what they are.

MR. OBAMA: That sounds like a scary dog. (Laughter.) Sort of dripping around the house. (Laughter.)

MR. LENO: I don't know what it is.

MR. OBAMA: No, no. We're going to get a dog that is –- that I think the girls will have a great time –- I think I'm going to have a lot of fun with it. You know, they say if you want a friend in Washington, get a dog. (Laughter.)

MR. LENO: Exactly. Mr. President, I must say, this has been one of the best nights of my life. Thank you very much, sir.

President of the United States. (Applause.)

http://forums.delphiforums.com/sunkopitiam/messages?msg=24775.2

China not following Singapore model

China not following Singapore model: Bill Emmott

Singapore’s Minister Mentor Lee Kuan Yew says China is learning from Singapore. “When you see Shanghai greening up like Singapore, you know they have studied us,” he told the National University of Singapore Society yesterday.

But former Economist editor Bill Emmott takes a different view. Little Singapore cannot be a model for a vast country like China, he says in his book, Rivals: How The Power Struggle Between China, India and Japan Will Shape Our Next Decade, published last year.

Discussing how the Chinese Communist Party could introduce “some form of democracy” and still retain power, he turns to Singapore.

Singapore’s ruling "People’s Action Party has won all the elections held since 1959 by a landslide", he says, just as the Communists have ruled China since 1949 – but there are differences, he adds:

But a city state of just 4.4 million people can hardly be a model for a China of 1.3 billion people, and Lee Kuan Yew, the founding father both of Singapore and the PAP, also does not fit the Communist Party’s current pattern: he has founded a political dynasty, with his son now as prime minister, which the Chinese party has shown no signs of doing.

The better model is probably to China’s northeast, in the land of its traditional enemy, Japan...

After a few hiccups in the early 1950s, Japan was a one-party state from 1953 until 1993, when the Liberal Democratic Party briefly lost power.

A decade and a half later, despite wrenching economic times, the LDP is still in power. It is quite impressive, really.

http://forums.delphiforums.com/sunkopitiam/messages?msg=24774.1

MM Lee: 2-3 years to recover

March 21, 2009

2-3 years to recover

Or it could take up to six years; export model is still the best, says MM

By Clarissa Oon, Senior Political Correspondent
		'Four million people to sustain industries supplying top-end goods to the world? That's rubbish.' Singapore has no choice but to export, MM Lee stressed. -- PHOTO: ASSOCIATED PRESS

SINGAPORE will take two to three years to bounce back from the recession - and this is the optimistic scenario that assumes the United States recovers next year.

The pessimistic forecast? Five to six years, according to Minister Mentor Lee Kuan Yew, who spoke last night at the launch of an alumni complex at the National University of Singapore (NUS).

Women, babies and foreigners These are edited extracts from Minister Mentor Lee Kuan Yew's dialogue with the National University of Singapore Society ON SINGAPORE'S BABY DEARTH AND IMPORT OF FOREIGNERS ... more

MM Lee, who has been saying that Singapore's recovery hinges on that of the US, believes that the American economy is 'fundamentally sound'. Its big companies such as General Motors and Chrysler are 'sound' despite their requests for further government aid.

He said he was reassured by US Federal Reserve chairman Ben Bernanke's remarks last month that the economy would pick up by 2010, once the government's stimulus package frees up lending to households and businesses.

Also, the same reliance on exports that has put Singapore's economy in the doldrums means that once the world's major economies rebound, 'we are going to bounce back'.

MM Lee took issue with criticisms of Singapore's economic model, such as that from a recent Wall Street Journal editorial which said the Republic needed to refocus on the domestic consumption of goods that are now produced for export.

'Four million people to sustain industries supplying top-end goods to the world? That's rubbish.' Singapore has no choice but to export, he stressed.

What will further stand Singapore in good stead is its free trade agreements with countries such as the US, Japan, China, Australia and New Zealand, he added.

With such conditions in place, 'if we don't prosper, we're stupid'.

Mr Lee made these points as he shared his thoughts on what Singapore would become in 25 years time, with some 300 alumni, students and staff of NUS.

http://forums.delphiforums.com/sunkopitiam/messages?msg=24687.1

Full transcript of Prime Minister Lee Hsien Loong’s interview with BBC

Full transcript of Prime Minister Lee Hsien Loong’s interview with BBC

BBC:

Has the region been too complacent about its dependence on Western markets?

PM Lee:

We’ve had no choice. The whole world is plugged in as one globalised world. The consumption, the markets are in America. India and China have been growing rapidly … but on a world scale, they’re still very small.

BBC:

Has there been a failure to focus on developing domestic markets in the Asia-Pacific region?

PM Lee:

The big domestic markets … will be China and India. The way to develop the markets will be to raise their standards of living. Then, they have the money to consume.

BBC:

How concerned are you about the huge paper losses that have been made in the two sovereign wealth funds here?

PM Lee:

The value of the portfolios have gone down — 20, 25 per cent. Everybody has taken a hit, whether you are Harvard, Yale, Stanford or the Norwegians. If you’re in the markets, you have to ride the ups and downs.

BBC:

Your wife until recently ranTemasek Holdings. Your father is deeply involved in the Government of Singapore Investment Corporation.

Is there a risk when the news is bad … that people will tend to blame your family rather than look at the institutions?

PM Lee:

The way you put it is not the way things work in Singapore.

The Minister Mentor is chairman of GIC not because he’s my father; it’s because he’s the best man for the job, and he’s been chairman since he’s been PM.

And Ho Ching was CEO ofTemasek not because she’s my wife but because the chairman of Temasek … and the board decided they wanted to appoint her as CEO.

They’re there as long as they’re effective, performing, and if they don’t perform, they have to take the consequences.

BBC:

Perception is so important in politics. In difficult times like this, do you think in retrospect, it might have been better for your family to have a lower profile?

PM Lee:

(Laughs) Life would be much easier for me if MM were not my father and Ho Ching were not my wife. But they’re there.

This is the way Singapore has worked. Singaporeans have understood this is how the system works.

And they’ll render judgment when elections come.

BBC:

Finally, Prime Minister, I read that you are apparently the highest paid head of government in the world. Your salary is about four or five times what President Obama gets. Are you worth all that money?

PM Lee:

(Laughs) I am not comparing myself and I don’t look at these rankings.We go on a system which is open, honest, transparent – what is the job worth, what is the quality of the person whom you want.

We need the best people for the job and these are jobs where you make decisions which are worth billions of dollars. And you cannot do that if you are pretending and you just say, ‘Well, we are all in it for the love of King and Country’.

We want it to be honest, we want people not to come in for the money. But at the same time the sacrifice cannot be too great. And at times like these, you want the best possible government you can have.”

http://forums.delphiforums.com/sunkopitiam/messages?msg=24679.2

BBC Interviews PM Lee

BBC Interviews PM Lee

"Life would be much easier for me if the Minister Mentor were not my father and Ho Ching were not my wife. But they are there. This is the way Singapore has worked. I think Singaporeans have understood that this is how the system works and they will render judgment when elections come." - PM Lee, BBC Interview.
.
I completely agree with with what PM Lee said. I feel so sorry for PM Lee for his predicament of having the best 2 of the fund managers in the country/world being part of his family. This has made his life so difficult. But still he is so modest because the same family also had the best telco executive in the country/world in the form of his brother who was SingTel CEO and himself, the best person to lead Singapore. I really wonder where we will be without his family. The British must be so impressed when they heard his interview.
.
" I am not comparing myself and I don’t look at these rankings.We go on a system which is open, honest, transparent – what is the job worth, what is the quality of the person whom you want. We need the best people for the job and these are jobs where you make decisions which are worth billions of dollars. And you cannot do that if you are pretending and you just say, ‘Well, we are all in it for the love of King and Country’. We want it to be honest, we want people not to come in for the money. But at the same time the sacrifice cannot be too great. And at times like these, you want the best possible government you can have.” - PM Lee on his high salary.
.
Yes, the leaders of other countries are all pretenders accepting lower pay and professing their love for their country. The PAP govt pays the highest salaries in the world so that they don't attract people who come for money - now I know why my leaders are extraordinary ....they operate on logic that few can understand. I guess AIG was also paying out high bonus because they don't want people who come for the money but cannot allow their employees to make sacrifices that are too great. Please those people who want to sacrifice a lot don't have to join the PAP anyway - they are not suitable because as PAP members, their sacrifice cannot be too great. You see the PAP govt already generated enough sacrifice in this country from those opposition members who are arrested, jailed, bankrupted and thrown out of their jobs. While the PAP members cannot be allowed to sacrifice too much, there is no amount of sacrifice that is too much for the opposition and their supporters. So we are led by PAP leaders who cannot sacrifice too much, don't profess the love for the country and have to be paid the highest salaries in the world but they are not in it for the money. Our PM concludes that these are the best leaders in times of crisis. I'm sure your respect for the PAP leaders will increase several fold after reading the full interview here. Singaporeans are so lucky to have such good leaders ....I'm sure all of you know what to do when the elections come.

http://forums.delphiforums.com/sunkopitiam/messages?msg=24679.1

Fired before the first day on the job

Saturday March 21, 2009
Fired before the first day on the job

INSIGHT DOWN SOUTH
By SEAH CHIANG NEE

The rapid disappearance of jobs has become the biggest single problem for Singapore, next to the economic crisis itself.

YOU’RE hired ... sorry, I mean fired – headlined a recent story concerning Singapore’s worst job slump for graduates.

It described the plight of a final-year economics student who lost her job in an American bank that was offered to her last November before she graduated.

She was one of at least three others from the National University of Singapore who were similarly “retrenched” by troubled firms – even before they had done a single day of work.

She had planned to spend her first pay cheque on a holiday to Europe. Instead a letter arrived revoking her job.

For this island state, the rapid disappearance of jobs has become the biggest single problem, next to the economic crisis itself. It affects all, from the highly educated to the uneducated.

But the biggest impact is felt by graduates, who make up more than half the number of the new jobless – and concerns are increasing.

In a survey of 100 graduating students who completed degree courses this year, more than half said they were afraid of heading into the real world, a newspaper reproved.

Their concern has been proven to be sound.

The government has just announced that the number of unemployed graduates more than doubled last year to 14,800 in December from 6,200 a year earlier.

(For comparison, the local universities are graduating some 17,000 youths this year, with an estimated 8,000-10,000 more from foreign institutions.)

Degree and diploma holders form the biggest number of dismissed workers in Singapore. In the last quarter of 2008, half the retrenched were professionals, managers, executives and technicians.

New graduates are the worst affected. “They are all fighting for the same jobs and fresh grads are at a disadvantage compared with those with experience,” said bank economist Irvin Seah.

Adding to the tight market is the return of thousands who have finished studies abroad.

One of the 4,000 who came back from America said he might seek a job here because many US firms are shying away from hiring foreign nationals.

Singapore is in this straits because for more than a decade, it had joined others like China, Taiwan and Hong Kong, to significantly increase the number of graduates to meet a higher-skill economy.

Today, about 20% of the annual school cohort ends up with a degree, 40% a diploma and much of the rest with some form of technical certificate.

This higher education has helped to create the current middle-class Singapore, the richest country in Southeast Asia, with 90% of the citizens owning homes.

In better times, a married couple with general degrees and three

years working experience could

earn a combined S$7,000-S$8,000 (RM17,000-RM20,000) a month.

But as recession set in last year, thousands have become unemployed and many others are working with reduced wages – working shorter weeks or taking pay or bonus cuts.

It is a national dilemma.

Unless graduate unemployment is reversed, the middle class here faces erosion and social problems and poverty could set in.

Out-of-work graduates are unable to service their home payments or maintain their family. More couples may decide not to have children.

When he was Prime Minister during the early days of university-building, Lee Kuan Yew had said that Singapore would avoid countries like India, in producing too many jobless graduates.

With an able mind and higher expectations, too many of them would sit idly around coffee shops hatching revolutions, he explained.

For the first time, the government has announced a scheme to offer subsidies to recession-hit banks and financial firms which take on new graduates – probably as an intern programme.

Those firms would be given subsidies for the recruits’ allowances for up to a year, if they take in a minimum – possibly 10 – of new graduates. If the recession worsens, the scheme could be extended to other major corporations, one executive said.

“It will help companies to build up their talent pool and better position themselves when the economy picks up in the long run,” said a bank official.

Job risks remain very high as the economy heads for a forecast 5% fall in 2009, particularly in hardest-hit finance, manufacturing, airlines, shipping and retailing.

In the face of all these, Singapo-reans have become more pessimistic than resource-rich Southeast Asian countries about how long they can survive without a job.

A survey by insurance group, AIA says only 19% think they could go more than two years without their main source of income, compared with 27% last year.

Trade and Industry Minister Lim Hng Kiang has assured Parliament that more than 30,000 jobs would be created this year, enough to absorb the pool of fresh graduates and new job seekers.

Most retrenched are resilient, fitting into a lower job – but not without problems. A graduate who applied to be a bus conductor was rejected because he was over-qualified. Another trouble is competition from foreigners who have a higher qualification and a lower pay expectation.

A Singapore engineer (diploma) was recently retrenched from a S$2,600 (RM6,300)-a-month technical sales job, which was taken over by a Myanmar post-graduate who accepted a pay of S$1,500 (RM3,600).

The graduates crisis is not only reducing Singapore’s middle class, but also the population itself.

The next two years may force the exit of 200,000 unemployed foreign workers (and 100,000 locals), says Credit Suisse. This could mean the total population will fall by 3.3% to 4.68 million by 2010.

Given the deepening economic crisis “maybe a smaller Singapore will be better,” commented a letter to the press.

http://forums.delphiforums.com/sunkopitiam/messages?msg=24676.1

Recipe for Disaster: The Formula That Killed Wall Street

By Felix Salmon 02.23.09

In the mid-'80s, Wall Street turned to the quants—brainy financial engineers—to invent new ways to boost profits. Their methods for minting money worked brilliantly... until one of them devastated the global economy.
Photo: Jim Krantz/Gallery Stock

A year ago, it was hardly unthinkable that a math wizard like David X. Li might someday earn a Nobel Prize. After all, financial economists—even Wall Street quants—have received the Nobel in economics before, and Li's work on measuring risk has had more impact, more quickly, than previous Nobel Prize-winning contributions to the field. Today, though, as dazed bankers, politicians, regulators, and investors survey the wreckage of the biggest financial meltdown since the Great Depression, Li is probably thankful he still has a job in finance at all. Not that his achievement should be dismissed. He took a notoriously tough nut—determining correlation, or how seemingly disparate events are related—and cracked it wide open with a simple and elegant mathematical formula, one that would become ubiquitous in finance worldwide.

For five years, Li's formula, known as a Gaussian copula function, looked like an unambiguously positive breakthrough, a piece of financial technology that allowed hugely complex risks to be modeled with more ease and accuracy than ever before. With his brilliant spark of mathematical legerdemain, Li made it possible for traders to sell vast quantities of new securities, expanding financial markets to unimaginable levels.

His method was adopted by everybody from bond investors and Wall Street banks to ratings agencies and regulators. And it became so deeply entrenched—and was making people so much money—that warnings about its limitations were largely ignored.

Then the model fell apart. Cracks started appearing early on, when financial markets began behaving in ways that users of Li's formula hadn't expected. The cracks became full-fledged canyons in 2008—when ruptures in the financial system's foundation swallowed up trillions of dollars and put the survival of the global banking system in serious peril.

David X. Li, it's safe to say, won't be getting that Nobel anytime soon. One result of the collapse has been the end of financial economics as something to be celebrated rather than feared. And Li's Gaussian copula formula will go down in history as instrumental in causing the unfathomable losses that brought the world financial system to its knees.

How could one formula pack such a devastating punch? The answer lies in the bond market, the multitrillion-dollar system that allows pension funds, insurance companies, and hedge funds to lend trillions of dollars to companies, countries, and home buyers.

A bond, of course, is just an IOU, a promise to pay back money with interest by certain dates. If a company—say, IBM—borrows money by issuing a bond, investors will look very closely over its accounts to make sure it has the wherewithal to repay them. The higher the perceived risk—and there's always some risk—the higher the interest rate the bond must carry.

Bond investors are very comfortable with the concept of probability. If there's a 1 percent chance of default but they get an extra two percentage points in interest, they're ahead of the game overall—like a casino, which is happy to lose big sums every so often in return for profits most of the time.

Bond investors also invest in pools of hundreds or even thousands of mortgages. The potential sums involved are staggering: Americans now owe more than $11 trillion on their homes. But mortgage pools are messier than most bonds. There's no guaranteed interest rate, since the amount of money homeowners collectively pay back every month is a function of how many have refinanced and how many have defaulted. There's certainly no fixed maturity date: Money shows up in irregular chunks as people pay down their mortgages at unpredictable times—for instance, when they decide to sell their house. And most problematic, there's no easy way to assign a single probability to the chance of default.

Wall Street solved many of these problems through a process called tranching, which divides a pool and allows for the creation of safe bonds with a risk-free triple-A credit rating. Investors in the first tranche, or slice, are first in line to be paid off. Those next in line might get only a double-A credit rating on their tranche of bonds but will be able to charge a higher interest rate for bearing the slightly higher chance of default. And so on.

"...correlation is charlatanism"
Photo: AP photo/Richard Drew

The reason that ratings agencies and investors felt so safe with the triple-A tranches was that they believed there was no way hundreds of homeowners would all default on their loans at the same time. One person might lose his job, another might fall ill. But those are individual calamities that don't affect the mortgage pool much as a whole: Everybody else is still making their payments on time.

But not all calamities are individual, and tranching still hadn't solved all the problems of mortgage-pool risk. Some things, like falling house prices, affect a large number of people at once. If home values in your neighborhood decline and you lose some of your equity, there's a good chance your neighbors will lose theirs as well. If, as a result, you default on your mortgage, there's a higher probability they will default, too. That's called correlation—the degree to which one variable moves in line with another—and measuring it is an important part of determining how risky mortgage bonds are.

Investors like risk, as long as they can price it. What they hate is uncertainty—not knowing how big the risk is. As a result, bond investors and mortgage lenders desperately want to be able to measure, model, and price correlation. Before quantitative models came along, the only time investors were comfortable putting their money in mortgage pools was when there was no risk whatsoever—in other words, when the bonds were guaranteed implicitly by the federal government through Fannie Mae or Freddie Mac.

Yet during the '90s, as global markets expanded, there were trillions of new dollars waiting to be put to use lending to borrowers around the world—not just mortgage seekers but also corporations and car buyers and anybody running a balance on their credit card—if only investors could put a number on the correlations between them. The problem is excruciatingly hard, especially when you're talking about thousands of moving parts. Whoever solved it would earn the eternal gratitude of Wall Street and quite possibly the attention of the Nobel committee as well.

To understand the mathematics of correlation better, consider something simple, like a kid in an elementary school: Let's call her Alice. The probability that her parents will get divorced this year is about 5 percent, the risk of her getting head lice is about 5 percent, the chance of her seeing a teacher slip on a banana peel is about 5 percent, and the likelihood of her winning the class spelling bee is about 5 percent. If investors were trading securities based on the chances of those things happening only to Alice, they would all trade at more or less the same price.

But something important happens when we start looking at two kids rather than one—not just Alice but also the girl she sits next to, Britney. If Britney's parents get divorced, what are the chances that Alice's parents will get divorced, too? Still about 5 percent: The correlation there is close to zero. But if Britney gets head lice, the chance that Alice will get head lice is much higher, about 50 percent—which means the correlation is probably up in the 0.5 range. If Britney sees a teacher slip on a banana peel, what is the chance that Alice will see it, too? Very high indeed, since they sit next to each other: It could be as much as 95 percent, which means the correlation is close to 1. And if Britney wins the class spelling bee, the chance of Alice winning it is zero, which means the correlation is negative: -1.

If investors were trading securities based on the chances of these things happening to both Alice and Britney, the prices would be all over the place, because the correlations vary so much.

But it's a very inexact science. Just measuring those initial 5 percent probabilities involves collecting lots of disparate data points and subjecting them to all manner of statistical and error analysis. Trying to assess the conditional probabilities—the chance that Alice will get head lice if Britney gets head lice—is an order of magnitude harder, since those data points are much rarer. As a result of the scarcity of historical data, the errors there are likely to be much greater.

In the world of mortgages, it's harder still. What is the chance that any given home will decline in value? You can look at the past history of housing prices to give you an idea, but surely the nation's macroeconomic situation also plays an important role. And what is the chance that if a home in one state falls in value, a similar home in another state will fall in value as well?

Here's what killed your 401(k) David X. Li's Gaussian copula function as first published in 2000. Investors exploited it as a quick—and fatally flawed—way to assess risk. A shorter version appears on this month's cover of Wired.

Probability Specifically, this is a joint default probability—the likelihood that any two members of the pool (A and B) will both default. It's what investors are looking for, and the rest of the formula provides the answer.	Survival times The amount of time between now and when A and B can be expected to default. Li took the idea from a concept in actuarial science that charts what happens to someone's life expectancy when their spouse dies.	Equality A dangerously precise concept, since it leaves no room for error. Clean equations help both quants and their managers forget that the real world contains a surprising amount of uncertainty, fuzziness, and precariousness.
Copula This couples (hence the Latinate term copula) the individual probabilities associated with A and B to come up with a single number. Errors here massively increase the risk of the whole equation blowing up.	Distribution functions The probabilities of how long A and B are likely to survive. Since these are not certainties, they can be dangerous: Small miscalculations may leave you facing much more risk than the formula indicates.	Gamma The all-powerful correlation parameter, which reduces correlation to a single constant—something that should be highly improbable, if not impossible. This is the magic number that made Li's copula function irresistible.

Enter Li, a star mathematician who grew up in rural China in the 1960s. He excelled in school and eventually got a master's degree in economics from Nankai University before leaving the country to get an MBA from Laval University in Quebec. That was followed by two more degrees: a master's in actuarial science and a PhD in statistics, both from Ontario's University of Waterloo. In 1997 he landed at Canadian Imperial Bank of Commerce, where his financial career began in earnest; he later moved to Barclays Capital and by 2004 was charged with rebuilding its quantitative analytics team.

Li's trajectory is typical of the quant era, which began in the mid-1980s. Academia could never compete with the enormous salaries that banks and hedge funds were offering. At the same time, legions of math and physics PhDs were required to create, price, and arbitrage Wall Street's ever more complex investment structures.

In 2000, while working at JPMorgan Chase, Li published a paper in The Journal of Fixed Income titled "On Default Correlation: A Copula Function Approach." (In statistics, a copula is used to couple the behavior of two or more variables.) Using some relatively simple math—by Wall Street standards, anyway—Li came up with an ingenious way to model default correlation without even looking at historical default data. Instead, he used market data about the prices of instruments known as credit default swaps.

If you're an investor, you have a choice these days: You can either lend directly to borrowers or sell investors credit default swaps, insurance against those same borrowers defaulting. Either way, you get a regular income stream—interest payments or insurance payments—and either way, if the borrower defaults, you lose a lot of money. The returns on both strategies are nearly identical, but because an unlimited number of credit default swaps can be sold against each borrower, the supply of swaps isn't constrained the way the supply of bonds is, so the CDS market managed to grow extremely rapidly. Though credit default swaps were relatively new when Li's paper came out, they soon became a bigger and more liquid market than the bonds on which they were based.

When the price of a credit default swap goes up, that indicates that default risk has risen. Li's breakthrough was that instead of waiting to assemble enough historical data about actual defaults, which are rare in the real world, he used historical prices from the CDS market. It's hard to build a historical model to predict Alice's or Britney's behavior, but anybody could see whether the price of credit default swaps on Britney tended to move in the same direction as that on Alice. If it did, then there was a strong correlation between Alice's and Britney's default risks, as priced by the market. Li wrote a model that used price rather than real-world default data as a shortcut (making an implicit assumption that financial markets in general, and CDS markets in particular, can price default risk correctly).

It was a brilliant simplification of an intractable problem. And Li didn't just radically dumb down the difficulty of working out correlations; he decided not to even bother trying to map and calculate all the nearly infinite relationships between the various loans that made up a pool. What happens when the number of pool members increases or when you mix negative correlations with positive ones? Never mind all that, he said. The only thing that matters is the final correlation number—one clean, simple, all-sufficient figure that sums up everything.

The effect on the securitization market was electric. Armed with Li's formula, Wall Street's quants saw a new world of possibilities. And the first thing they did was start creating a huge number of brand-new triple-A securities. Using Li's copula approach meant that ratings agencies like Moody's—or anybody wanting to model the risk of a tranche—no longer needed to puzzle over the underlying securities. All they needed was that correlation number, and out would come a rating telling them how safe or risky the tranche was.

As a result, just about anything could be bundled and turned into a triple-A bond—corporate bonds, bank loans, mortgage-backed securities, whatever you liked. The consequent pools were often known as collateralized debt obligations, or CDOs. You could tranche that pool and create a triple-A security even if none of the components were themselves triple-A. You could even take lower-rated tranches of other CDOs, put them in a pool, and tranche them—an instrument known as a CDO-squared, which at that point was so far removed from any actual underlying bond or loan or mortgage that no one really had a clue what it included. But it didn't matter. All you needed was Li's copula function.

The CDS and CDO markets grew together, feeding on each other. At the end of 2001, there was $920 billion in credit default swaps outstanding. By the end of 2007, that number had skyrocketed to more than $62 trillion. The CDO market, which stood at $275 billion in 2000, grew to $4.7 trillion by 2006.

At the heart of it all was Li's formula. When you talk to market participants, they use words like beautiful, simple, and, most commonly, tractable. It could be applied anywhere, for anything, and was quickly adopted not only by banks packaging new bonds but also by traders and hedge funds dreaming up complex trades between those bonds.

"The corporate CDO world relied almost exclusively on this copula-based correlation model," says Darrell Duffie, a Stanford University finance professor who served on Moody's Academic Advisory Research Committee. The Gaussian copula soon became such a universally accepted part of the world's financial vocabulary that brokers started quoting prices for bond tranches based on their correlations. "Correlation trading has spread through the psyche of the financial markets like a highly infectious thought virus," wrote derivatives guru Janet Tavakoli in 2006.

The damage was foreseeable and, in fact, foreseen. In 1998, before Li had even invented his copula function, Paul Wilmott wrote that "the correlations between financial quantities are notoriously unstable." Wilmott, a quantitative-finance consultant and lecturer, argued that no theory should be built on such unpredictable parameters. And he wasn't alone. During the boom years, everybody could reel off reasons why the Gaussian copula function wasn't perfect. Li's approach made no allowance for unpredictability: It assumed that correlation was a constant rather than something mercurial. Investment banks would regularly phone Stanford's Duffie and ask him to come in and talk to them about exactly what Li's copula was. Every time, he would warn them that it was not suitable for use in risk management or valuation.

David X. Li
Illustration: David A. Johnson

In hindsight, ignoring those warnings looks foolhardy. But at the time, it was easy. Banks dismissed them, partly because the managers empowered to apply the brakes didn't understand the arguments between various arms of the quant universe. Besides, they were making too much money to stop.

In finance, you can never reduce risk outright; you can only try to set up a market in which people who don't want risk sell it to those who do. But in the CDO market, people used the Gaussian copula model to convince themselves they didn't have any risk at all, when in fact they just didn't have any risk 99 percent of the time. The other 1 percent of the time they blew up. Those explosions may have been rare, but they could destroy all previous gains, and then some.

Li's copula function was used to price hundreds of billions of dollars' worth of CDOs filled with mortgages. And because the copula function used CDS prices to calculate correlation, it was forced to confine itself to looking at the period of time when those credit default swaps had been in existence: less than a decade, a period when house prices soared. Naturally, default correlations were very low in those years. But when the mortgage boom ended abruptly and home values started falling across the country, correlations soared.

Bankers securitizing mortgages knew that their models were highly sensitive to house-price appreciation. If it ever turned negative on a national scale, a lot of bonds that had been rated triple-A, or risk-free, by copula-powered computer models would blow up. But no one was willing to stop the creation of CDOs, and the big investment banks happily kept on building more, drawing their correlation data from a period when real estate only went up.

"Everyone was pinning their hopes on house prices continuing to rise," says Kai Gilkes of the credit research firm CreditSights, who spent 10 years working at ratings agencies. "When they stopped rising, pretty much everyone was caught on the wrong side, because the sensitivity to house prices was huge. And there was just no getting around it. Why didn't rating agencies build in some cushion for this sensitivity to a house-price-depreciation scenario? Because if they had, they would have never rated a single mortgage-backed CDO."

Bankers should have noted that very small changes in their underlying assumptions could result in very large changes in the correlation number. They also should have noticed that the results they were seeing were much less volatile than they should have been—which implied that the risk was being moved elsewhere. Where had the risk gone?

They didn't know, or didn't ask. One reason was that the outputs came from "black box" computer models and were hard to subject to a commonsense smell test. Another was that the quants, who should have been more aware of the copula's weaknesses, weren't the ones making the big asset-allocation decisions. Their managers, who made the actual calls, lacked the math skills to understand what the models were doing or how they worked. They could, however, understand something as simple as a single correlation number. That was the problem.

"The relationship between two assets can never be captured by a single scalar quantity," Wilmott says. For instance, consider the share prices of two sneaker manufacturers: When the market for sneakers is growing, both companies do well and the correlation between them is high. But when one company gets a lot of celebrity endorsements and starts stealing market share from the other, the stock prices diverge and the correlation between them turns negative. And when the nation morphs into a land of flip-flop-wearing couch potatoes, both companies decline and the correlation becomes positive again. It's impossible to sum up such a history in one correlation number, but CDOs were invariably sold on the premise that correlation was more of a constant than a variable.

No one knew all of this better than David X. Li: "Very few people understand the essence of the model," he told The Wall Street Journal way back in fall 2005.

"Li can't be blamed," says Gilkes of CreditSights. After all, he just invented the model. Instead, we should blame the bankers who misinterpreted it. And even then, the real danger was created not because any given trader adopted it but because every trader did. In financial markets, everybody doing the same thing is the classic recipe for a bubble and inevitable bust.

Nassim Nicholas Taleb, hedge fund manager and author of The Black Swan, is particularly harsh when it comes to the copula. "People got very excited about the Gaussian copula because of its mathematical elegance, but the thing never worked," he says. "Co-association between securities is not measurable using correlation," because past history can never prepare you for that one day when everything goes south. "Anything that relies on correlation is charlatanism."

Li has been notably absent from the current debate over the causes of the crash. In fact, he is no longer even in the US. Last year, he moved to Beijing to head up the risk-management department of China International Capital Corporation. In a recent conversation, he seemed reluctant to discuss his paper and said he couldn't talk without permission from the PR department. In response to a subsequent request, CICC's press office sent an email saying that Li was no longer doing the kind of work he did in his previous job and, therefore, would not be speaking to the media.

In the world of finance, too many quants see only the numbers before them and forget about the concrete reality the figures are supposed to represent. They think they can model just a few years' worth of data and come up with probabilities for things that may happen only once every 10,000 years. Then people invest on the basis of those probabilities, without stopping to wonder whether the numbers make any sense at all.

As Li himself said of his own model: "The most dangerous part is when people believe everything coming out of it."

— Felix Salmon (felix@felixsalmon.com) writes the Market Movers financial blog at Portfolio.com.

http://forums.delphiforums.com/sunkopitiam/messages?msg=24658.2