Mar 14, 2009
Buyer beware
By Chan Akya
"There are two tragedies in life. One is to lose your heart's desire. The other is to gain it." - George Bernard Shaw
Central banks across the Group of Seven leading industrialized countries are opening their purse strings with the first wave of quantitative easing (QE) measures seen in the current generation. After the US Federal Reserve started buying eligible corporate debt directly from the end of last year, we now have the Bank of England completing its first wave of QE-related asset purchases this week.
As with the moves by the US Federal Reserve in the past, the Bank of England quickly found itself overwhelmed by sellers who were quite eager to get rid of their UK government bonds (termed "gilts" ), with requests for around 10 billion pounds sterling (US$1.4 billion) against the 2 billion pounds that had been initially expected.
What followed was interesting: the immediate decline in the yield of UK government bonds by around 50 basis points (five-year gilts fell to 2.12% from 2.61% at the end of February) made the Bank of England move an unqualified success. About the one thing we know for sure about the world's central banks is that they love to copy each other; therefore in short order it is highly likely that the US Federal Reserve, the Bank of Japan and perhaps even the European Central Bank (more on that later) will start buying up the bonds of their respective governments or member states.
In recent history, the Japanese government embarked on QE in the late 1990s after its policy of cutting interest rates to zero failed to produce any economic bounce: the failure was due to the significant losses on the balance sheets of Japanese banks and companies which rendered the actual interest rate moot as against the painful decline in asset value on the other side of their balance sheets. The QE policy of the Bank of Japan did not succeed in pulling Japan from the depths of its recession, and indeed may have only served to accentuate the deflationary forces that were unleashed by the country's demographic decline.
The UK on the other hand bears watching, for almost alone among the major economies it resembles the US in every respect - a house-price bubble, endemic leverage, bankrupt financial institutions and so on - with the main difference arising from the absence of a reserve currency status. In other words, Americans who wonder about what would happen to their country if the US dollar weren't the world's de facto currency would need to look no further than the UK.
Deliberately pushing down government yields in the UK would serve to push down the value of the currency against its major trading partners: the US and the European Union; which, given a service-oriented economy focusing on areas such as trade, insurance and financial services, would give the UK economy a significant competitive boost.
The move was repeated in Switzerland, which also this week acted deliberately to push down the value of its currency against the euro as it sought to maintain a competitive advantage in areas such as banking, tourism and manufacturing in the face of significant government intervention in neighboring European countries effectively supporting its competitors.
Meanwhile, in Asia, after revealing a current account deficit for the first time in recent memory, Japan has quietly seen its own version of devaluation as the yen now hovers around the 100 level from around 90 to the US dollar in late January - a level that presented tremendous difficulties for the country's exporters and even made the famously conservative Toyota Motor Corp at one stage request government assistance.
By now, readers will have recognized the game that is afoot: competitive devaluations across the G-7 - composed of Canada, France, Germany, Italy, Japan, the UK and the US - and the United States as every economy attempts to secure the future of its constituents, albeit at the cost of other major economies.
This phase will continue for a while longer, at least until the hapless European Central Bank (ECB) finally also caves into the demands of its member states and succumbs to the same logic - namely, of effecting a steady erosion of the purchasing power of their own currencies. The ECB is the central bank for Europe's single currency, the euro. According to its own web site, the ECB's "main task is to maintain the euro's purchasing power and thus price stability in the euro area". The euro area comprises the 16 European Union countries that have introduced the euro since 1999.
Who is the fish?
An oft-repeated saying from the game of poker holds that "around the table, you should always know who the fish is. If you don't, it's you." In this case, the "fish" refers to the worst player on the table, the one who is effectively paying for everyone else's winnings.
Non-Japan Asia is the unfortunate fish in the global game of devaluation being played by the major economies: the US, the EU, the UK, Switzerland, Japan and so forth. In particular, export powerhouses such as China, South Korea and Taiwan really have it bad, as do the Southeast Asian economies as we enter the next phase of the economic slowdown in the global economy.
It is not just in terms of currency values that the Asians are being made out to be the fish in this game. Adding insult to injury, it is the savings of Asians that actually help fund the government bonds of the major world economies. As interest rates are pushed down along with a parallel shift in the value of the currencies, savers in Asia are getting the worst possible deal, namely a decline in both current income and future purchasing power.
Central banks around the region are holding on to the bonds issued by the major economies because of fears that a large sell-off - by say, China - would damage the total value of their holdings and cause significant pain. However, this is to forget the longer-term, slow leakage that is currently on the cards anyway; leading as it will to the eventual destruction of values.
On the other side of the ring, we have countries such as South Korea, China and India all creating their own stimulus programs to push up domestic demand. Instead of participating in each other's government bond auctions though, the countries have been busy supporting the activities of the major economies and herein are the main problems for the region as a whole.
China certainly needs the experience of Korean construction companies in its initiative, much as India does too. The easiest way for both these countries to help Korea would be to award contracts to the latter; in return, the Korean government could easily buy infrastructure bonds denominated in US dollars issued by China or India. Similar instances of possible cooperation abound in areas ranging from energy to health.
A lot of this, though, will remain a pipe dream of this writer as Asian central banks continue their slavish purchases of whatever they have always been buying. For the citizens of the region though, the same question that should have been asked 24 months ago arises once again: who do these guys work for: their own citizens or those of the G-7?
http://forums.delphiforums.com/sunkopitiam/messages?msg=25378.1
Saturday, March 14, 2009
Wednesday, March 11, 2009
Email to Dr Lee Wei Ling
To : Dr Lee Wei Ling
c/o Sim Hwee Peng [ hwee_peng_sim@nni.com.sg ]
Dear Dr Lee
I had a hard time trying to find your email address. I gave up eventually and decided just to send my mail to you through your staff. Unfortunately, I have a feeling that Ms Sim will automatically block things that she feels are irrelevant to your work, and protect you from unnecessary disturbances.
I read your article titled “Why compare? Work together instead” featured in the Think-Tank column of The Straits Time today. You believe that people are gloomy because Singaporeans are comparing their wealth and income today to what they had in 2008. Also, the more unfortunate sub group is resentful that there is another group that is “luckier”.
Dr Lee, because I am not a monkey but in fact, someone who believes in a Supreme Being that will one day come and judge me for all the things that I have done on earth, please allow me to share with you my perspective.
We are born who we are and we should learn to live with it. Some people are born pretty and some ugly. Some are born rich and some poor. That is okay with me, because I know if I work hard, network with people, I might be able to improve my situation.
Therefore, if I am ugly, I don’t resent those who are pretty. If I am poor, I don’t resent those who are rich. You might be rich, and I might be poor. That does not matter to me, as long as it does not matter to you. I know of some rich people who are very nice. I also know of some poor people that I would want to stay far far away from.
To some of us, it is not about the poor being unhappy with the rich. Money is all relative and transient. One can be rich today and poor tomorrow. Or poor today and rich tomorrow.
Some of us are gloomy (in fact out right p***ed ) not because of income inequality. It is because we think our government has not exercised leadership, transparency and accountability. All our politicians try to do is to remain in power. There is nothing wrong with that. They should try their best to keep their jobs, and I would do the same thing if I were them too.
The issue here is, while trying to keep their jobs, the politicians and their friends become extremely rich because their pay are linked to “performance”. And now we are asking: Who should be accountable for the economy, loss of reserves, competition of low skill jobs by cheap foreigners, etc?
That is why some of us despair for Singapore.
http://forums.delphiforums.com/sunkopitiam/messages?msg=26051.2
Lee Wei Ling : Why compare? Work together instead
March 11, 2009
THINK-TANK
Why compare? Work together instead
| By Lee Wei Ling |
RECENTLY, when I looked out of the window of my room at the Singapore General Hospital onto the junction where Chin Swee Road and the Central Expressway cross Outram Road to join the Ayer Rajah Expressway, I saw bumper to bumper traffic between 7.30am and 8.30am.
Isn't Singapore supposed to be in a recession - indeed, the worst recession we have experienced since the Great Depression of the 1930s? Yes it is, and Singaporeans are groaning.
| RELATED LINKS |
Yet the wealth and income of most Singaporeans today are more rather than less than they were 10 years ago, even after accounting for inflation. So why the rather gloomy mood? The answer is that everything is relative. Singaporeans are comparing their wealth and income today to what they had in the boom years preceding 2008.
Consider a scientific experiment conducted on capuchin monkeys and reported in the journal Nature in 2003. The monkeys were trained to hand a token to a human experimenter in exchange for a cucumber. When two monkeys were able to see that each received one cucumber in exchange for one token, both felt satisfied and happily ate their cucumbers.
But when the experiment was changed so that one monkey received a grape and the other a cucumber, in full view of each other, the second monkey became upset, a grape being more desirable than a cucumber. When both were asked to hand over a token after that, the second monkey became uncooperative.
If one monkey was given a grape without giving the experimenter a token, the other monkey would become even more uncooperative and would toss either the token or the cucumber out of the test chamber. But if the first monkey was removed and a grape placed where it had been, after a while, the other monkey would gradually settle for the cucumber, seeing that no other monkey was getting a grape.
If capuchin monkeys can become dissatisfied comparing themselves to their peers, more so humans. We compare our present to our past, often forgetting the bad times and remembering only the good. We also compare ourselves with our peers.
If we see others suffer as we do, we resent our situation less. If a particular sub-group of the population suffers more than other sub-groups, the comparison is invariably noticed by the unfortunate sub-group. The perceived iniquity would rub salt into their wounds, aggravating the resentment they feel and causing jealousy towards those they perceive to be luckier than they.
A study last year reported in the journal Industrial Relations revealed that employee well-being is dependent upon how their wages compare with those of others in the comparison group, as opposed to the individual's absolute pay. Researchers Gordon Brown, Jonathan Gardner, Andrew Oswald and Jing Qian asked undergraduates to rate how satisfied they would be with the wages they might be offered for their first job after college. Subjects expressed feelings about each potential wage in the context of a set of other wages. The researchers also analysed data from 16,000 employees who reported on workplace satisfaction.
Employees did not care solely about their absolute level of pay. They were more concerned about how their incomes compared to those of the people around them in the workplace. And individuals were not influenced solely by their relative income but rather by the rank-ordered position of their wages within a comparison set.
'Our study shows how ordinal rank has a statistically significant effect upon well-being,' the authors concluded. 'Human well-being depends in a particular way upon comparisons with others.'
The lesson to be learnt by organisations like the one I lead, the National Neuroscience Institute (NNI), is that every employee must know how he has been appraised so he will know his salary, bonus, annual increments and promotions are fair. It is not enough for the system to be fair; the staff must be able to see clearly that the system is fair.
NNI has implemented peer appraisal to supplement the reporting officer's appraisal. When the two diverge, the countersigning officer must try to figure out the reason for the discrepancy and come to a fair decision about the person being appraised. I usually ask both the reporting officer and the peer the reasons for their appraisals.
But I hope everyone at NNI does not judge his or her worth by the remuneration he or she receives. We each contribute to NNI in different ways; yet we all succeed or fail as a team. In addition to the doctors, the administrators, nurses and medical technicians at NNI all play a role in enabling the institute to deliver the best neuro-medical care we can to our patients.
At the national level, it is important that sub-groups in the population that are suffering more than others in the current recession receive more help. At the same time, the entire population must feel that the Government has tried its best to look after everyone fairly. The richer members of our community should not flaunt their wealth. It would be even better if those who can afford it, donate their time and resources to help the less fortunate.
We are all in this economic downturn together, and we should strive as a nation to pull through together. That way, we will emerge from this crisis more resilient and more united than we are now. That is my hope for Singapore.
The writer is director of the National Neuroscience Institute. Think-Tank is a weekly column rotated among eight leading figures in Singapore's research and tertiary institutions.
http://forums.delphiforums.com/sunkopitiam/messages?msg=26051.1
Tuesday, March 10, 2009
Lee Wei Ling on global economic crisis
Lee Wei Ling on global economic crisis
In 2007, in an end-of-year message to the staff of the National Neuroscience
Institute, I wrote: 'Whilst boom time in the public sector is never as
booming as in the private sector, let us not forget that boom time is
eventually followed by slump time. Slump time in the public sector is always
less painful compared to the private sector.'
Slump time has arrived with a bang.
While I worry about the poorer Singaporeans who will be hit hard, perhaps
this recession has come at an opportune time for many of us. It will give us
an incentive to reconsider our priorities in life.
Decades of the good life have made us soft. The wealthy especially, but also
the middle class in Singapore, have had it so good for so long, what they
once considered luxuries, they now think of as necessities.
A mobile phone, for instance, is now a statement about who you are, not just
a piece of equipment for communication. Hence many people buy the latest
model though their existing mobile phones are still in perfect working
order.
A Mercedes-Benz is no longer adequate as a status symbol. For millionaires
who wish to show the world they have taste, a Ferrari or a Porsche is deemed
more appropriate. The same attitude influences the choice of attire and accessories. I still
find it hard to believe that there are people carrying handbags that cost
more than thrice the monthly income of a bus driver, and many more times
that of the foreign worker labouring in the hot sun, risking his life to
construct luxury condominiums he will never have a chance to live in.
The media encourages and amplifies this ostentatious consumption. Perhaps it
is good to encourage people to spend more because this will prevent the
recession from getting worse. I am not an economist, but wasn't that the
root cause of the current crisis - Americans spending more than they could
afford to?
I am not a particularly spiritual person. I don't believe in the
supernatural and I don't think I have a soul that will survive my death. But
as I view the crass materialism around me, I am reminded of what my mother
once told me: 'Suffering and deprivation is good for the soul.'
My family is not poor, but we have been brought up to be frugal. My parents
and I live in the same house that my paternal grandparents and their
children moved into after World War II in 1945. It is a big house by today's
standards, but it is simple - in fact, almost to the point of being shabby.
Those who see it for the first time are astonished that Minister Mentor Lee
Kuan Yew's home is so humble. But it is a comfortable house, a home we have
got used to. Though it does look shabby compared to the new mansions on our
street, we are not bothered by the comparison.
Most of the world and much of Singapore will lament the economic downturn.
We have been told to tighten our belts. There will undoubtedly be suffering,
which we must try our best to ameliorate.
But I personally think the hard times will hold a timely lesson for many
Singaporeans, especially those born after 1970 who have never lived through
difficult times.
No matter how poor you are in Singapore , the authorities and social groups
do try to ensure you have shelter and food. Nobody starves in Singapore .
Many of those who are currently living in mansions and enjoying a luxurious
lifestyle will probably still be able to do so, even if they might have to
downgrade from wines costing $20,000 a bottle to $10,000 a bottle. They
would hardly notice the difference.
Being wealthy is not a sin. It cannot be in a capitalist market economy.
Enjoying the fruits of one's own labour is one's prerogative and I have no
right to chastise those who choose to live luxuriously.
But if one is blinded by materialism, there would be no end to wanting and
hankering. After the Ferrari, what next? An Aston Martin? After the Hermes
Birkin handbag, what can one upgrade to?
Neither an Aston Martin nor an Hermes Birkin can make us truly happy or
contented. They are like dust, a fog obscuring the true meaning of life, and
can be blown away in the twinkling of an eye.
When the end approaches and we look back on our lives, will we regret the
latest mobile phone or luxury car that we did not acquire? Or would we
prefer to die at peace with ourselves, knowing that we have lived lives
filled with love, friendship and goodwill, that we have helped some of our
fellow voyagers along the way and that we have tried our best to leave this
world a slightly better place than how we found it?
We know which is the correct choice - and it is within our power to make
that choice.
In this new year, burdened as it is with the problems of the year that has
just ended, let us again try to choose wisely.
To a considerable degree, our happiness is within our own control, and we
should not follow the herd blindly.
Lee Wei Ling
http://forums.delphiforums.com/sunkopitiam/messages?msg=26028.1
Friday, March 6, 2009
Rumoured 8-month Bonus for CDC Staff is 'In Line with NWC Guidelines'
| Updated: 6th March 2009, 1800 hrs |
| Rumoured 8-month Bonus for CDC Staff is 'In Line with NWC Guidelines': People's Association |
http://938live.sg/portal/site/938Live/menuitem.43735da1634c4377d21b2910618000a0/?vgnextoid=bc14d2c8b1bdf110VgnVCM1000001f0aa8c0RCRD&mcParam=18d2638896593110VgnVCM100000e101000aRCRD |
Thursday, March 5, 2009
Online Civil Disobedience in Singapore
Online Civil Disobedience in Singapore
That there has been online civil disobedience is a fact. Vivid evidence of it has been present with the blog positing of articles and rally pictures in particular during GE 2006.
Yet during the Institute of Policy Studies forum “Getting Their Hands Dirty: Recent Developments in Singapore’s Political Blogosphere” on 4 March 2006, its researchers, in particular Ms Tan Simin, went out of the way to persuade the audience present that what we have now in Singapore is “online civic participation”. Weighing in, IPS director Ong Keng Yong intervened and spoke at length during the Q&A when discussion heated up surrounding the term online civil disobedience. He said “online civil disobedience” should be countered least it is picked up by bloggers and the media and its use by them becomes widespread.
However, choosing not to acknowledge that in the context of Singapore’s internet regulation that online civil disobedience has taken place and is perhaps even ongoing is to ignore that there is a problem with the current state of regulation governing the breath of online political expression.
The term online civil disobedience is important because to some extent because the regulation surrounding online political expression is still unclear, many sites and bloggers maybe still operating illegally.
For instance, during the initial period of Think Centre in 1999, several of its online activities were investigated and its members administered police warnings for their online political expression. The fact that there has been no wide spread current governmental persecution of new online actors does not make such acts legal or illegal.
Thus it was not surprising that among the registered attendees included representatives from the Strategic Planning and Development and Policy and Operations divisions of the Ministry of Home Affairs as well as from the Public Communications Division of the Ministry of Information, Communications and the Arts.
The crux of the review by IPS was to understand the political blogosphere landscape and to speculate its potential to make an impact on Singapore’s politics. Hence, the emphasis was equally on anonymous sites and bloggers in particular with high hit sites such as Wayang Party Club.
But the sub text that emerged from the presentation was that there is some ambiguity over the legality of these expressions in Singapore’s political blogosphere.
What is also important is that IPS researcher Mr. Tan Tarn How clearly acknowledged that anonymous bloggers are in reality only blogging in pseudonymous because governmental agencies in Singapore have the technical capacity to find out the identity of such bloggers or already know their identity.
There were several themes in the IPS seminar that came up that are worth highlighting here which give an indication on how the researchers view Singapore’s political blogosphere:
There was an attempt to suggest that anonymously run sites’ content may not be authentic or reliable.
Even sites that were not run anonymously were admonished for not being fully “professional”.
In the IPS sample, there is a clear attempt to avoid analysing or including political sites or sites of activists.
The term “online civic participation” is actively promoted while trying to simultaneously negate terms like “activism” and “online civil disobedience’.
The IPS forum apart from providing an insight into research on the political blogosphere in Singapore also provided an insight into the research culture and choice of analytical terms promoted within such institutions and among some of its researchers.
Online civil disobedience is an important concept to mull over because in Singapore’s short internet history, it possible to make the claim that online civil disobedience is a precursor to the current offline civil disobedience which is organised with the help of online mobilization tools.
Trying to water down such terms does not help sharpen our analysis of the emerging political blogosphere and its political impact in Singapore.
http://forums.delphiforums.com/sunkopitiam/messages?msg=25430.1
That there has been online civil disobedience is a fact. Vivid evidence of it has been present with the blog positing of articles and rally pictures in particular during GE 2006.
Yet during the Institute of Policy Studies forum “Getting Their Hands Dirty: Recent Developments in Singapore’s Political Blogosphere” on 4 March 2006, its researchers, in particular Ms Tan Simin, went out of the way to persuade the audience present that what we have now in Singapore is “online civic participation”. Weighing in, IPS director Ong Keng Yong intervened and spoke at length during the Q&A when discussion heated up surrounding the term online civil disobedience. He said “online civil disobedience” should be countered least it is picked up by bloggers and the media and its use by them becomes widespread.
However, choosing not to acknowledge that in the context of Singapore’s internet regulation that online civil disobedience has taken place and is perhaps even ongoing is to ignore that there is a problem with the current state of regulation governing the breath of online political expression.
The term online civil disobedience is important because to some extent because the regulation surrounding online political expression is still unclear, many sites and bloggers maybe still operating illegally.
For instance, during the initial period of Think Centre in 1999, several of its online activities were investigated and its members administered police warnings for their online political expression. The fact that there has been no wide spread current governmental persecution of new online actors does not make such acts legal or illegal.
Thus it was not surprising that among the registered attendees included representatives from the Strategic Planning and Development and Policy and Operations divisions of the Ministry of Home Affairs as well as from the Public Communications Division of the Ministry of Information, Communications and the Arts.
The crux of the review by IPS was to understand the political blogosphere landscape and to speculate its potential to make an impact on Singapore’s politics. Hence, the emphasis was equally on anonymous sites and bloggers in particular with high hit sites such as Wayang Party Club.
But the sub text that emerged from the presentation was that there is some ambiguity over the legality of these expressions in Singapore’s political blogosphere.
What is also important is that IPS researcher Mr. Tan Tarn How clearly acknowledged that anonymous bloggers are in reality only blogging in pseudonymous because governmental agencies in Singapore have the technical capacity to find out the identity of such bloggers or already know their identity.
There were several themes in the IPS seminar that came up that are worth highlighting here which give an indication on how the researchers view Singapore’s political blogosphere:
There was an attempt to suggest that anonymously run sites’ content may not be authentic or reliable.
Even sites that were not run anonymously were admonished for not being fully “professional”.
In the IPS sample, there is a clear attempt to avoid analysing or including political sites or sites of activists.
The term “online civic participation” is actively promoted while trying to simultaneously negate terms like “activism” and “online civil disobedience’.
The IPS forum apart from providing an insight into research on the political blogosphere in Singapore also provided an insight into the research culture and choice of analytical terms promoted within such institutions and among some of its researchers.
Online civil disobedience is an important concept to mull over because in Singapore’s short internet history, it possible to make the claim that online civil disobedience is a precursor to the current offline civil disobedience which is organised with the help of online mobilization tools.
Trying to water down such terms does not help sharpen our analysis of the emerging political blogosphere and its political impact in Singapore.
http://forums.delphiforums.com/sunkopitiam/messages?msg=25430.1
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