I just bought 10 blades for $23.90. Wow, each blade costs $2.39? If I use each blade ten times, then each shave is 24 cents!
Sometimes it's possible to think too much.
(Ten is a reasonable estimate for good shaves. However, sometimes I use a blade much longer if I don't care about shave quality.)
I'm still using a 2-blade shaver. When I finish using this batch of blades, maybe I'll switch to a 3-blade shaver. The shavers are all incompatible with one another. It's about time someone introduced a universal holder. (And it must be done in a way to avoid lawsuits.)
A bit of history. The 3-blade shaver was only introduced in 1998. It replaced the 2-blade shaver introduced in 1971. Since then, there was an arms race and the state-of-the-art now is a 5-blade shaver! But what's the point?
I made two mistakes in my 2008 annual expenses. I overlooked a reimbursement of $9.18 and I double counted a phone bill of $61.35, so my expenses were slightly lower.
I discovered this when I decided to port the annual expenses to the new simplified format that I'm currently using.
I'm not going to update the old blog entries.
I originally posted this question on an online forum to gauge people's response. It was theoretical at that time.
Not surprisingly, my company is going to implement a paycut too. The surprising part is that you got to agree to it! If you don't agree, then your pay don't get cut, as simple as that. (This consent is on an individual basis; it's not a majority vote.)
Call me naive, but I thought most people would opt for it. But talking to more and more people, it seems that they are not convinced to accept it.
I don't mind accepting the paycut if 80% agrees. If only 20% agrees, you look like a fool. I wish there's this option: "agree if 80% does so".
I usually advise people not to be a guarantor. Most people don't understand the full implication of being a guarantor and sign away readily.
However, I could not avoid that fate when one of my relatives needed two guarantors to defer his study bond. He wanted to go overseas to further his studies for another three years.
My relative took the MOE tuition grant — who doesn't? It is not really a grant at all. Its purpose is to make foreign students work for companies based in Singapore for 3 years (immediately) after graduation. If you break the bond, you have to pay a compounded interest of 10%, starting from the commencement of the grant.
According to NTU's webpage, the MOE tuition grant for engineering foreign students is $15.7k (for the '06 intake). If you break the bond right after your course, you have to pay back $80.2k. If you break it three years later, you have to pay back $106.7k!
All these from a principal of $62.8k.
I just sold 16 kg of newspapers for $0.80.
I usually don't bother, but I was curious to know the going rate.
McDonalds used to offer a McMuffin burger with coffee set for $2 on weekdays (excluding public holidays, of course). This is an amazing deal, seeing that the McMuffin burger is sold separately for $2.70 and the coffee for $1.95. This just tells you what kind of markup is involved.
Recently, McDonalds changed the coffee to McCafe "premium" coffee. The set became $2.50.
I have three comments about the McCafe premium coffee.
One, it tastes much better than the normal coffee. There are three variants: long black (no milk), cappuccino (quarter milk) and latte (half milk). I've only tried the last two. My suggestion: always take the cappuccino. The latte is very weak.
Two, McCafe coffee is also much more expensive. The normal coffee costs $1.95. The small McCafe coffee costs $2.50, normal $3.45. It is $1.50 more expensive.
Three, if you buy a breakfast set, you can upgrade to the McCafe coffee for $1 more. This is quite worth it.
For the McMuffin burger set, with the change from $2 to $2.50, you're paying just $0.50 more for the McCafe coffee — not that you have a choice, though. This is an even better deal than the breakfast set upgrade.
However, note that McDonalds still find it worthwhile to earn your $0.50. Looks like the McCafe coffee isn't that premium after all. You're just being overcharged.
If you just want the premium coffee, let me show you an unethical way to get it for just, say, $1.
Find someone who doesn't mind the normal coffee. Pay him $1 for his McCafe coffee. After you finished it, fill the cup with regular coffee and return it to him. You may wash the cup first, of course.
It's a net gain for both of you: $1 for your McCafe coffee, and $1.50 for his McMuffin burger set. McDonalds eats the loss, of course.
Ethical? Of course not. But that doesn't stop some people.
THE success of The IT Show this year has left retailers with one burning question: Should trade fairs like this be the way to go for them?
By the time the four-day fair at Suntec Singapore ended at 9pm, it had chalked up $58.5 million in sales and attracted 768,000 visitors.
Last year, the fair raked in $54.5million over four days and drew a 735,000-strong crowd.
This year's numbers were all the more remarkable, given the weak economic climate.
One retailer, D-Link International, estimated its sales at this year's fair could rise up to 20 per cent from last year's. This was on the back of sales of network equipment like wireless Internet routers.
"What we sold during the fair could have made up for 11/2 months of normal business sales," said the company's sales director, Ms Estella Tan.
Exhibitor Audio House'smarketing consultant, Ms Joanne Wee, said that IT fairs are win-win situations because they are a "platform for many businesses to clear selected older models" and for consumers to find a "good deal".
However, many retailers felt that fairs may not be sustainable as the sole source of business.
Agreeing, a spokesman for retailer Challenger Technologies said: "It's not enough to cover our overheads."
Still, retailers are surprised at the strong demand during the downturn.
Queues snaked out of the exhibition halls and Internet forums were abuzz with activity, with forum posters suggesting what and where the good bargains were.
Travel fair is packed. IT fair is also packed.
"Recession, what recession?"
Are Singaporeans too shielded from the financial crisis, or do they just know a good bargain?
However, consumer spending is a lagging indicator. Just imagine a capacitor. It takes a while to discharge. If we take September 2008 as the start of meltdown in the US, then there's still no effect on consumers in Singapore six months later.
My current pair of shoes are wearing out, both of them. I remember I started wearing them on 1st May 2006, so that makes them just 1-1/2 months shy of their third birthday. I think I can wear them for another two weeks, but not any longer.
It's time to shop for another pair of shoes again.
I spent $180 for my current pair of shoes. $180 over 35 months works out to be $5.14/month, or $0.17/day. If I recall correctly, I spent $120 to $150 for my previous pair of shoes. That was 6 to 7 years ago.
If I were to buy back the same quality of shoes, I may need to spend $200 to $250. I may take a different approach: buy a $100 pair of shoes and change them twice as often.
A private tuition teacher revealed in his blog that he saved $50,000 a year! In an earlier entry, he mentioned that he saved 70% to 80%, so on average he should be earning around $66,000 per year.
He also revealed that he declared income tax. Frankly, I didn't expect this. He would be paying $900 for the first $40k and $2,210 for the next $26k (8.5%), for a total of $3,110. However, with the 20% tax rebate, he "only" need to pay $2,488.
It's not just what you earn, but also what you save.
Is he saving a lot?
If you want to compare to a regular salaried worker, you have to take into account the 14.5% employer CPF contribution, so his "regular" pay is $58.2k. His take-home pay is then $47.4k after the 20% CPF contribution. (Kind of a forced savings.)
(Note that CPF contributions are capped at $54k.)
His expenses still remain at $16k, so his savings is $31.4k.
In other words, if you earn $66k gross (including employer's CPF contribution) and save $31.4k from your net pay, you're on par with him.
It's tough to save $31.4k on a $66k salary ($47.4k take-home), though.
There's a How to avoid Tax Tangles article in today's Sunday Times. It mentioned under-declaration of income by the self- employed.
I've been to a few places that are cash-only. Once an establishment becomes big enough, you'll expect them to accept NETS or CC. But no, cash only. I'm always suspicious of such places. What are they trying to hide?
If I were a tax auditor, I'm sure to audit them first.
Figures may not add up to 100% due to rounding errors.
Bear ratio = ratio of net worth in a bear market to the current situation.
FFR (Financial Freedom Ratio): liquid net worth / annual expenses. I counted the entire net worth, so that means selling everything at the end.
FIR (Financial Independence Ratio): annual passive income / annual expenses. This is an estimate currently.
Is the housing grant per-person or per-household? I think it's per-person, meaning a couple is still entitled to half the housing grant if the other person is a second-timer.
The Additional CPF Housing Grant is per-household, though — it is clearly stated "first-timer household status".
The best is to get an answer from HDB:
I would like to check if a first-timer Singaporean and a second-timer Malaysian (Singapore PR) is entitled to the housing grant if they get a resale flat.
Another question is, suppose two siblings (both PRs) own a flat now. One of them, say A, is marrying a Singaporean. The other sibling, say B, then transfers his share to A's wife. Is A's wife entitled to the housing grant?
A's wife is a first-timer.
I am considering whether to account for the COE depreciation monthly.
YBR: $701 over 10 years means $70.10/year, or $5.85/month.
CB400F: $1,125 over 10 years means $112.50/year, or $9.38/month.
MX-5: $18,444 over 10 years means $1,844.40/year, or $153.70/month.
The 'unconventional tools' that the Bank of England will use to fight the financial crisis.
Interest rates are now as close as they can get to zero without causing malfunctions in the financial system.
In this new world, with the Bank of England shorn of its main tool for influencing the economy, the policymakers in Threadneedle Street have to turn to unconventional tools.
Some have been tried before with differing degrees of success. But whatever the tool, the objective is clear: to keep Britain from dipping any deeper into recession and becoming trapped in a debt-driven deflation and depression, as the US was in the 1930s.
With no room to cut rates, the Bank must instead turn to direct means of influencing the money supply. This is important. The nominal growth rate of an economy can be no greater than the speed at which money is growing, and flowing around the economy. This famous economic equation – the quantity theory of money – lies behind the Bank's decision to create £150bn of money.
Whether it will succeed is another question, but Thursday's announcement means it has thrown its weight behind this new policy of quantitative easing with more weight and vigour than any other central bank in history.
How does it work? The Bank lends out money in return for collateral – usually government or company debt – to instill confidence in the market and provide cash with which to trade. It has been doing this for over a year through its Special Liquidity Scheme and its successor.
Pros The system does not meddle directly with monetary policy – so does not interfere with interest rate decisions – and it directly ensures that banks' balance sheets are kept above water.
Cons Although it addresses liquidity problems – ie. when financial institutions don't have enough cash to hand – it does not solve the credit crunch, in which banks are unwilling to lend cash at all.
Does it work? To an extent. It has ensured strains on the financial markets have eased in comparison with the early days of the crisis, but the amount banks are willing to lend remains extremely low.
How does it work? The Bank buys, rather than lends against, the assets of private investors, be they pension funds, insurance groups or banks. The assets are most likely commercial paper (short-term company debt) and corporate bonds. It pays for the money from a pot of cash raised by the Government through issuing gilts – in other words without increasing the amount of cash in the system. This is what the Bank has attempted to do through the Asset Purchase Facility, and is what the Federal Reserve is doing in the US.
Pros If successful, it gets to the heart of the matter, reducing the cost of credit for companies and lubricating the capital markets for companies. Because the purchases are funded by the Government it is not particularly inflationary.
Cons It has proved very difficult for the Bank to get hold of the right type of commercial debt (in other words at a good price, and a type that won't default). Pay too little and you will leave the taxpayer facing a big bill in the coming years.
Does it work? To an extent. The Fed has bought billions of dollars worth of corporate debt, but with little impact on commercial bond spreads.
How does it work? The Bank buys government debt off investors and banks rather than corporate debt. This is something the Bank had authorised by the Treasury yesterday. The aim is to bring longer-term interest rates down, ensuring that companies and lenders cut their own rates.
Pros: Gilts are gilt-edged, and so have very little chance of defaulting (and if the UK Government has defaulted that is a whole other kettle of fish to worry about) and there are plenty of them around, so are easy to buy.
Cons: It does not make any direct difference to companies' cost of borrowing, instead pushing down government interest rates: nice, but not the heart of the matter.
Does it work? Yes, if by that you mean getting long-term interest rates down. The Japanese did it in the past, but it has not yet been tried by the Fed.
How does it work? The Bank buys assets off private investors but funds those purchases by creating money (literally, with the push of a button; metaphorically, with printing presses). This is what the Government has now approved. The aim is to increase the amount of money in the economy, which will in turn increase either economic growth, inflation, or a combination of the two.
Pros: The UK faces a possible spate of debt deflation, and there are few more powerful weapons for a central bank to use than its printing presses. It can also aim to kill two birds with one stone and cut the cost of borrowing for companies by making cash more plentiful. With interest rates at zero, there are few other more powerful tools the Bank can employ.
Cons: In normal times, such a policy is potentially highly inflationary. There is every chance the Bank is unconsciously laying the ground for an uncontrollable wave of inflation in the future. Deflation is the big enemy at present but the threat may be overblown, and printing money – quantitative easing – will create a mess of unparalleled proportions to clear up afterwards.
Does it work? Yes and no. The only other time it has been used is by the Bank of Japan. As Japan is still trapped in stagnation, many say it failed. However, there is evidence the Japanese experience would have been worse had it not taken these measures. Some also argue that the BoJ was too slow to start quantitative easing.
How does it work? The bank prints money, piles it inside a helicopter, takes to the skies and scatters the cash across the nation. Suddenly, every family is richer – provided they get to the cash in time and have sharp enough elbows. This technically amounts to a tax rebate for everyone funded by money creation, and was christened a "helicopter drop" of money by economist Milton Friedman. In his eyes it was the most dramatic way for the central bank to get money out into the streets.
Pros: This instantly gets money into people's hands and, with any luck, gets them spending it in the high street. Those who don't spend can use it to pay off debt, which isn't such a bad thing either.
Cons It is so radical a policy it might scare away international investors from the UK. It displays a disregard for controlling inflation that could also send sterling plunging. It will summon up even more vivid comparisons with Zimbabwe and Weimar Germany.
Does it work? It has never been properly tried before. The Japanese and Koreans have experimented with issuing vouchers to their citizens in the hope of encouraging them to spend but these were – importantly – not funded with created money. Fed Chairman Ben Bernanke is convinced, however, that in desperandum it would pump up a deflated economy.
Quantitative Easing is such a fancy term for "printing money". Now that US and UK are at this stage, I wonder what's next when it doesn't work.
When my stylus spoiled, I thought the replacement would cost at most $50. Nope, it's $138.03 after GST.
I still decided to buy it to give my tablet PC one last lease of life. If something else breaks, that's it.
It's spelled A I G, by another name.
Someone described the US Government as the "sucker of the last resort". Ha ha ha!
I wonder when the US Government will finally say, "enough is enough".
Is AIG really too big to fail?
We live in interesting times.
The Government of Singapore Investment Corp (GIC) has said it will convert its convertible preferred notes in the US lender Citigroup to common stock in a bid to help shore up the troubled US lender.
The exchange price is US$3.25 a share – a 32 per cent premium to Citigroup's closing price on Thursday. The price is way under the conversion price of US$26.35 a share under the original terms of the investment.
With the conversion, GIC's stake in Citigroup will rise to an estimated 11.1 per cent, without any injection of additional funds.
In January 2008, the Singapore sovereign wealth fund bought about US$6.88 billion worth of perpetual, convertible notes in Citigroup. These preferred stocks would pay a 7 per cent annual dividend.
Preferred shares are similar to bonds in that holders receive a fixed dividend. By getting preferred shareholders like GIC to convert their holdings into common stock, Citi will be able to reduce its quarterly dividend payment.
The US Treasury Department has said it will convert part of its holdings of preferred shares into Citigroup common stock. So too will some other large preferred stockholders, including Saudi Arabia's Prince Alwaleed Bin Talal Abdulaziz Alsaud.
In a statement, GIC said it supports the initiative by Citigroup and the US government to strengthen the quality of the bank's capital base in view of the challenging economic environment.
The US government will now take a US$25 billion stake in troubled Citigroup, with the conversion of its preferential stock into ordinary shares.
Separately, Citigroup has announced it will record another US$10 billion worth of writedowns as part of its already-released fourth quarter results. This brings its net loss for the year to US$27.7 billion.
GIC just said a few days that it would not convert. Who would? Obviously it was arm twisted into doing so.
Citigroup closed at US$1.50 on Friday, so GIC suffered yet another blow.
The US Government is trying all sorts of means to make Citigroup pass its stress test.
He who has the guns, calls the shots.
McDonalds is offering $4.50 value meals during weekday lunch hours (12pm to 2pm).
The meals are, McChicken, Double Cheeseburger, Filet-o-fish and McNuggets.
McChicken and Double Cheeseburger only cost $2 each. Medium fries cost $2.50. The $4.50 meal basically means getting the drink free.
The drink may sell for $1.90, but the cost is perhaps just 30 cents to McDonalds.
Filet-o-fish and McNuggets are way overpriced normally ($3.85 and $4.15), so $4.50 for the meal is a good value.
So, is the $4.50 meal a good deal? Yes, but not as good as I thought. If I'm willing to skip the drink, I can get the burger with the fries at $4.50 already.
I spent $800 on the 28/2 lens and $75 on the Talisman revised 4th edition. Otherwise, Others could have been zero.
Ladies and gentlemen, I present to you, the Minolta 28mm f/2 AF lens:
I used to have the RS (restyled) version of this lens, but it was stolen from me a few years ago. Since then, I used my 28/2.8 lens instead.
It wasn't the same in many ways. The 28/2 was much brighter through the viewfinder (easier to manual focus), its handling was better (RS had rubber focusing grip) and finally, you can get some blurred background at f/2! The slowest settings I could handhold reliably was f/2 1/15 — no Steady Shot! I used it regularly in low-light situations. The 28/2.8 wasn't up to the task.
I looked for a replacement for a while, but I didn't really put an effort to find it. Recently, I decided to look for it again and found a local seller! I was disappointed it was a non-RS lens. There are two main differences: the rubber focusing grip and the circular aperture.
In the end, I decided to buy it after all. My search for the RS lens continues.
I am hoping that Sony re-release this lens. The chance is low, but it's now more likely than ever. Let me explain.
Minolta used to have the 20/2.8, 24/2.8, 28/2, 28/2.8, 35/1.4, 35/2, 50/1.4, 50/1.7 in its lineup. After Sony bought over Minolta, it kept just the bolded ones. It is clear that Sony doesn't like lens duplication. (Although it still has some in its lineup; just not as bad as Minolta.)
The 28/2 was already a very niche lens, although those who tried it liked it — and they are not letting it go!
Previously, Sony's DSLRs all have the 1.5x crop factor. The wide-angle 28mm becomes a near-normal 42mm. Thus, the 28/2 lens was even less attractive — normal field-of-view is very boring, that's why the "standard" lenses are cheap.
However, Sony now has its first full-frame DSLR camera, the A900. 28mm becomes wide-angle again. 28mm is unlike 24mm or wider. 28mm is wide, but not that wide that you need to take special precautions or your subjects will look strange at the edges. Just take a look at newspaper photos. They don't care.
Thus, 28mm is a very popular entry-level wide-angle focal length. When 28mm becomes popular again, people will want a lens that's better and faster than the current 28/2.8 lens. And there's a ready solution: the 28/2 lens.
Still, I don't hold high hopes that the 28/2 lens will be released any time soon. f/2 is just not sexy enough. Recently, I read rumours that Sony may announce the Carl Zeiss 24/1.4 lens at the PMA. That's what I meant. f/1.4 is exotic, f/2 is not.
This is very sad, because when it comes to usability, 24/2 and 28/2 beats 24/1.4 and 28/1.4 hands down. The f/2 versions are smaller and lighter.
I need to pay a seller a few hundred dollars today and I wanted to make the transaction seamless, so I went to the bank to withdraw big notes. I was disappointed the bank didn't have them.
As this was the second time I encountered the same situation, I emailed the bank:
I went to a UOB branch to withdraw several hundred dollars today. I wanted denominations of $100 and $500, but they were not available.
I would like to suggest that the branches keep at least some $100 notes to make life easier for customers.
It's a hassle to handle 10 $50 notes. A $500 note would be very helpful.
LAST year's market meltdown has slashed over a third of the value off investments of retirement savings in stocks and unit trusts under the Central Provident Fund Investment Scheme (CPFIS).
Their plunging values were roughly in line with the slump on global bourses. Only the traditionally safe haven of bonds saw gains under CPFIS.
According to Lipper, a fund research and analysis firm, unit trusts available under CPFIS retreated 40.24 per cent on average while investment-linked insurance products (ILPs) fell 36.06 per cent.
But CPFIS investors who put their cash into bond funds gained 1.9 per cent over the previous year.
Among the CPFIS-included ILPs, bond global funds and bond Singapore funds were consistently the best performers over the last three years, said Lipper on Wednesday.
The DWS Lion Bond SGD, for example, is one of five top performing unit trusts named Lipper Leaders.
Lipper noted that during 2008, the MSCI World Index shed a total of 40 per cent, while the Straits Times Index (STI) lost 49 per cent.
The last quarter of 2008 alone saw CPFIS-included funds lose an average of 16.82 per cent, as global bourses slumped after the failure of Lehman Brothers.
Even before that, nearly half of all CPFIS investors - or 440,000 of them at the time - who sold their Ordinary Account (OA) investments in the year ended Sept 30 had lost money.
Still, figures from the CPF board show that CPF members remain invested in insurance policies and unit trusts.
As at Sept 30, CPF members had withdrawn $7.8 billion from the CPF-Special Account for investments, of which nearly 80 per cent, or $6.19 billion, went into insurance policies, and about $1.61 billion in unit trusts.
As at Dec 31, total investment was $7.7 billion - $6.1 billion into insurance policies and $1.5 billion into unit trusts.
The Government introduced measures so that people don't lose too much from their CPF. As a result, many people invested before the measures kicked in — at the peak. Now they aren't allowed to invest when the market has dropped over 50%. Ironic.
Maybank has a same-day funds transfer feature. It's not free. I only discovered it after I used it. I sent Maybank this feedback:
I used the same-day funds transfer and was shocked to find a $3 service charge!
I would like to suggest that this be highlighted. I didn't see it until I finished the transaction.
THE Monetary Authority of Singapore (MAS) has revised rules for unsecured credit that will be implemented on March 1.
Under the revised rules, the minimum annual income requirement for unsecured credit facilities will be lowered from $30,000 to $20,000.
An aggregrate maximum credit limit for all unsecured credit and credit cards across all affiliated entities will be set at four times the borrower's monthly income for individuals earning at least $30,000.
For individuals with an annual income below $30,000, who are therefore not eligible for credit cards, a maximum credit limit of two times the borrower's monthly income will apply.
The minimum annual income for credit cards remains unchanged at $30,000 for individuals at or below 55 years, and $15,000 for individuals above 55 years.
The central bank said that the revised rules aim to ensure a more consistent regime for granting of unsecured credit in Singapore.
'The revised rules will allow access to unsecured credit to more individuals who may have occasional genuine borrowing needs,' MAS said on Wednesdsay.
The changes attempt to maintain a balance between allowing responsible borrowing and the Government's social policy of discouraging individuals from spending beyond their means.
'Lenders and borrowers both have a role to play in ensuring that use of unsecured credit and credit cards is responsible, sustainable and within the means of the borrower.'
The changes follow extensive consultation jointly conducted by MAS and the Ministry of Law with the industry and public in 2006 and 2007.
Four times the borrower's monthly income for individuals earning at least $30,000? Hmm...
Interestingly, I checked the Credit Bureau of Singapore's website and they no longer put up the credit card statistics.
I patronize this food stall near my home that always has no change for bigger notes! I'm not talking about $50, but $10. It always has to send someone to get small change from the drinks stall.
I wonder why this is the case. Don't they keep change from earlier customers? I can't be the very first few, right?
Do they owe loansharks who are collecting the very last cent from them? Or do they lock away money every hour to prevent theft? I'm curious.
CapitaLand is giving out S$1mil in shopping vouchers as bonuses.
Frankly, I think it's a stupid idea, from the point of the staff.
From CapitaLand's point of view, this ensures at least S$1mil will be spent on its premises, helping its mall tenants.
If a staff is able to use up his vouchers fully, then it's still fine. If he can't, he'll need to sell it, usually at a discount. My guess is 10% to 20% discount, especially if he needs to raise cash quickly.
Many people think you don't need to pay tax for cash/gift/shopping vouchers (if you receive it as part of your enumerations). Sorry, IRAS says you need to.
So Citigroup (C) has proposed that the US taxpayer and other preferred shareholders convert up to $75 billion of preferred stock into common stock, thus bolstering the company's tangible equity and putting it in less desperate need of a complete takeover.
And what will the US taxpayer get for this preferred stock conversion? 40% of the company for some of its $45 billion of preferred, say reports. The reports add that Citigroup's goal here is to keep the US's ownership under 50%, so this won't be a de facto nationalization.
Well, that's nice for Citigroup...and another ream-job for taxpayers.
Citigroup's common equity is currently worth $10 billion. If the US were to convert all $45 billion of its preferred at the current stock price, it should end up with 80% of the company, not 40%.
For the US to convert $45 billion of preferred to common and only get 40% of the company, Citigroup's existing common equity would have to be valued at $65 billion, not $10 billion, and the conversion price would have to be about $10 a share. Or the US would only be able to convert $4 billion of its $45 billion, which wouldn't help Citigroup's tangible equity ratio much.
So is that what Citigroup is trying to do here? Persuade the US goverment to convert to common stock at a price miles above the current trading price, screwing the US taxpayer yet again?
Or does Citigroup have some other secret plan up its sleeve whereby it can take up to $75 billion of debt (preferred stock) off its books and not end up diluting its current shareholders 90%?
I wonder if there will be a public outcry. The Government is trying its best to avoid nationalization. But, Citigroup and AIG has all but been nationalized.
When these two fall, I wonder how many more structured products will be affected.
The difference is 0.25% pa. With $50k, the interest works out to be $125, or $10.42/month.
Interest rates are at an all time low. Maybank lowered its iSavvy interest rate from 1.38% pa to 0.75% pa last week. NTUC's FairPrice Plus is only going to offer 1% for S$50k and above from March (0.5% otherwise).
Then, I got an SMS from Standard Chartered that they are going to offer 1.5% pa for two months! I was very surprised, then I thought this must be for their highest $200k tier only, as per their past practice. I checked it out on their website. No, it was from the first $1! The offer is for fresh funds only. That's fine with me, I just keep $100 with them.
It looks like Standard Chartered is in dire need of money. 1.5% is better than most FD rates today.
There's no need to hesitate. I immediately logged into my UOB a/c to transfer money over. Unfortunately, I ended up transferring to my Maybank a/c because that's my usual target!
Some people say that you should not take on a task that pays less than your hourly wage, because you are not using your time effectively. The logic is sound, but these people usually calculate the hourly wage wrongly.
Take an 9-5 office worker earning $2,000 per month. His hourly wage is $11.11/hour. He should not wash his car himself, but leave it to the cleaners who only charge $6.
The flaw in the logic is that this assumes he can earn $11.11 during the time the cleaners wash his car for $6, so he still earns $5.11 net.
Unfortunately, most people can't do this. The same person who earns $2,000 has a real hourly wage of $2.73. It's cheaper for himself to clean the car, even if it takes two hours of his time.
A recession is when your neighbour loses his job. A depression is when you lose yours.
I'm not there yet, but I'm close. My company just announced a 5% pay cut for peons like me.
Developer cites poor market conditions for 11th-hour decision
A DEVELOPER has backed out of a planned $44 million purchase of an enbloc sale site in the prime Cairnhill area at the 11th hour - sparking anger from some of the home owners.
The firm, Jewel 1, blamed 'difficult, uncertain and deteriorating market conditions' for its decision to pull out of buying Cairnhill Heights.
The move came just 20 days before the deal to buy the 19-unit condo was due to have been completed on Feb 24, the condo's sales committee said yesterday. The developer, wholly owned by one shareholder, will have to forfeit its 5 per cent deposit of $2.2 million.
'This really feels like a stab in the back. Where is the good faith?' said one owner, also a sales committee member, who declined to be named.
The decision came despite a protracted legal battle in which Jewel fought for the right to buy the site.
The developer outlined its decision in a letter to the lawyer involved in the proposed sale.
Three sale committee members told The Straits Times they felt let down by the developer, as they regarded the firm as a partner in a deal that they had robustly defended against all challenges, believing it was a reputable property developer.
Jewel 1, which was registered in 2006, has only one shareholder and director - Mr Cheong Sim Lam. He was not available for comment.
Mr Cheong's family owns Hong Fok Realty, and he is the uncle of SC Global chief Simon Cheong.
He had agreed to buy Cairnhill Heights in May 2007, at the height of the property boom and amid a frenzy of collective sale deals.
The Strata Titles Board granted the sale in March last year. An objector at Cairnhill Heights then took the case to the High Court but lost the appeal in November.
A sale committee member who wished to remain anonymous said: "Having been on the same side for almost two years now, sometimes fighting shoulder-to-shoulder to secure the sale, the last thing you would have expected is for your contracting party to turn around and leave you in the lurch."
The sale committee said it has reserved all options in terms of possible legal recourse.
Owners of the 19 units will get their share of the forfeited deposit, after deducting for expenses, which are still being calculated.
If the sale had gone through, each owner would have received $1.97 million to $2.5 million, apart from the sole penthouse owner, who would have pocketed $5.5 million.
About half of the owners have rented out their units. One of the owners lives there but also own properties elsewhere in Singapore.
At least one owner is believed to have already bought a replacement property - assuming the full sale price would soon be paid - and is now stuck with two homes.
One owner, businessman Georg Mechtler, said: "We felt aggrieved, having committed for more than two years to sell this property while the market kept climbing. Now, we have missed all our selling opportunities of this cycle. And the buyer only forfeits a miserable 5 per cent."
Still, not all owners are upset. One said she is happy that an architectural icon has been preserved. Cairnhill Heights was designed by Singapore- based architect Geoff Malone.
"We should keep evidence of our architectural heritage," she said.
This is so ironic.
I do foresee trouble for the minority who held out. They should be careful of their belongings and perhaps even their life.
The Autobots were under a surprise attack by the Decepticons. Hot Rod and Kup barely made it back to the Autobot City.
Archie: I was afraid you'll be trapped outside the city!
Hot Rod: Hey, I wasn't afraid for a microsecond.
Archie: Then you probably didn't understand the situation.
I'm reminded of this dialogue from Transformers the movie (1986) from time to time these days.
Fresh finance graduates struggle to adjust expectations as dream jobs go up in smoke
EVEN as well-heeled chief executives of American banks are being called before Congress to defend their use of corporate jets, local finance graduates have also come crashing down to earth. Job offers that were once plentiful have evaporated and pay packages have shrunk. But some still refuse to accept the new realities and have turned their backs on jobs they see as less prestigious.
Khai, a finance graduate who had emerged last year among the top of his cohort, is still reeling from a fruitless job search, ongoing since last September. The 23-year-old who speaks four languages - Japanese and Malay in addition to English and Mandarin - has sent out 15 applications and sat through seven interviews to date.
'It has been whittled down to just one company with a potential interview,' he said. Despite this, he has held out on applying to smaller outfits like local analyst firms and brokerages - including one he interned with last year - though he would have stood a better chance with them. 'It just wasn't something that fitted my long-term career path,' he said.
It is now dawning on graduates like him that it is time to adjust expectations as they face increased competition from experienced employees who are not as picky as fresh graduates.
Moses Largado, 23, recalled getting through to the final round of interviews for a trading position with a foreign investment bank last year, in which none of the nine short-listed fresh graduates were hired. 'The bank ended up picking two experienced hires from Hong Kong for the position,' he said.
'Some professionals with two years of experience are more than willing to take a pay cut of 10-15 per cent for an entry level position with the sales and trading desk at that bank,' Mr Largado estimates. Having a specific department in mind has also not made the job search in a tightening market any easier for finance graduates like Mr Largado's coursemate, Wee Tze Yi.
The 24-year-old, who graduated last year, had approached close to 30 institutions, but only for trading or buy-side research positions because those had been his sole areas of interest - only to encounter resounding silence.
Alongside expectations that are lagging reality, some graduates have been somewhat passive about their job search. Frederic Lee, 26, had interned with a Big Four accounting firm and received a favourable appraisal but he received no response when he applied to it for a job. He did not follow up with a call. 'I'd lost the human resources person's number,' he said.
As recently as early last year, finance graduates were expecting an annual starting pay of $110,000 as the industry norm. Such expectations have been dealt a swift and brutal blow with one newly hired entry-level banker whom BT spoke to bemoaning his starting salary of 'only $55,000 a year'.
But such expectations of hefty pay cheques had primarily been fuelled by the global banks, which are themselves now cutting back on hiring and bracing themselves for austere times.
The hiring landscape this year is a bleak one compared to just two years ago. Of the 15 finance graduates BT spoke to, only four had managed to secure jobs.
In 2007, the National University of Singapore reported that close to 100 per cent of its business graduates gained employment within six months of graduation, with 80 per cent getting a job before graduation, according to its Graduate Employment Survey.
Today, in sombre contrast, the school is telling graduating students to brace themselves and moderate salary expectations.
'Although campus recruitment activities are continuing, the pace has slowed slightly. Given the volatility of the current environment, we can expect some recruiters to relook their recruitment plans,' said Joan Tay, the director of career services for the NUS Business School.
Hiring freezes have also adversely affected business students at Nanyang Technological University compared to their accounting faculty brethren.
'78 per cent of our cohort of 700 accountancy students graduating this May have already found jobs, which is quite similar to previous years.
'However, this year's cohort of 500 business students are facing challenges in finding jobs in view of the recession Singapore is experiencing,' said Professor Gillian Yeo, the executive associate dean at NTU'S Nanyang Business School.
Singapore Management University has taken to advising its students not to be choosy about jobs. 'These difficult times are unprecedented, and for this batch of graduating students, it will be a baptism of fire,' said Ruth Chiang, SMU's director of career services.
All three universities have reported that they are working closely with employers to secure jobs for their graduating students.
Some graduates such as Mr Largado and Mr Wee have decided to give the corporate sector a miss altogether.
Together, they have struck out as independent day traders, setting up office in a Tiong Bahru Soho unit. 'What's the point even if I get a job? The bank might retract the offer or fire me one month from now or even close down,' said Mr Wee, who has been trading currency, commodities and equities for the last three years. Starting out with $70,000 in capital, Mr Wee aims to double that sum by the end of the year.
But he admits: 'Even though we've been trading for three years, we are aware that the market has no favourites.'
Before graduates start looking at a Master's degree as a means of deferring their entry into the workforce, they should take heart from the fact that even though firms have cut down on hiring, they have not stopped altogether.
CIMB-GK Securities, a broking house, is in fact looking to increase its headcount of brokers and relationship managers, and will be scouring career seminars for fresh graduates this weekend.
'Fresh graduates will be considered alongside other experienced candidates as long as they possess the right qualifications and attributes for the positions,' said Carol Fong, the chief executive officer of CIMB-GK Securities.
It's difficult to accept it when your expectations are so high.
Temasek gets a lot of grief for losing 31% of its portfolio value. It was reported that GIC lost 41%, but it has not been confirmed — nor denied — since.
And then the Government said the country's reserves are not affected?! You believe them?
Then I thought about what LKY said in the past: that neither GIC nor Temasek use CPF, hence they are not unanswerable to the public.
Not using CPF? How come they have so much money then?
Then I realized how it could be the case. The CPF board lends money to them at a (low) fixed rate, hence it "becomes" GIC's money from then on. As long as GIC pays the interest, CPFB, and by extension CPF contributors, has no grounds to ask questions.
Some who had nailed cushy bank jobs even before graduation get regret letters
Heard this? You are fired even before you are hired. For final-year economics student J. Lim, this was not funny - she was 'retrenched' even before she started work.
The National University of Singapore (NUS) student was overjoyed when, in September last year, an American bank wrote to say she would be hired as an investment banking officer when she graduates in July this year.
Ms Lim, 23, even made plans to use her first pay cheque for a holiday in Europe. But in December, another letter arrived. 'The letter stated that the bank was freezing its headcount and thus had to withdraw its job offer,' she said.
The Sunday Times learnt that at least three other yet-to-graduate university students share her plight. The cushy bank jobs they thought they had nailed after their internships did not materialise.
The fallout from the global downturn is seeing new graduates - many with high expectations - chasing jobs also being eyed by retrenched experienced workers willing to take a pay cut.
A Sunday Times poll of 100 graduating students from the three local universities - NUS, Nanyang Technological University (NTU) and Singapore Management University (SMU) - found that one in two is 'afraid of graduating this year'. Between May and July, 12,000 of them are expected to be in the job market.
Ms Joan Tay, director of career services at the NUS Business School, said: 'In the light of the current economic downturn, coupled with significant job cuts and hiring freeze around the world, graduating students must brace themselves for a tight job market and moderate their salary expectations.'
Students are already doing so. The poll found one-third of them have changed their plans or expectations over the past year due to the economic gloom.
NTU electrical and electronics engineering student Yeoh Kuan Seong, 23, will not seek a career in engineering as the crisis has badly hit the manufacturing industry. He will start work as a technologist in Deutsche Bank when he graduates in July. Mr Yeoh, at least, has a job waiting for him.
NTU banking and finance student Neo Poh Lin, 25, has sent resumes to at least 10 banks since last September but has not got replies from most of them. 'None of my friends has got a job yet, not even those tipped to get first-class honours,' he said. For now, Mr Neo is looking to take on part-time sales jobs until the economy gets better.
NUS economics student Eric Chen, 25, who hopes to land a job in finance, has been making cold calls for job openings every other day since last November. He has also sent out more than 100 resumes, all to no avail.
'The finance industry now has an influx of professionals aged below 30 who were retrenched from the foreign banks. How can we new graduates compete with them?' he said.
Meanwhile, some of those who are not yet in their final year have 'backup' plans.
Ms Xu Jieyi, 22, a third-year SMU student doing a four-year double degree in accountancy and economics, will graduate in December next year. But she is taking a part-time diploma course in professional make-up artistry. Her parents paid $4,000 for the five-month-long course which started this month.
'Hopefully, this will be the additional source of income after I graduate,' she said.
It's tough to graduate in a recession.
Local men, listen up. According to a survey conducted by the Shin Min Daily News, women in Singapore require that their prospective partners earn a minimum of $4,000 to $5,000, before they will consider marrying them.
Local TV artiste and compere Quan Yifeng discussed this issue on a talkshow programme recently. The topic was about "How much should a Singaporean man earn" and how much is enough?
The three female guests invited to speak on the talkshow agreed that a good amount would be between $4,000 to $5,000. A shocked Quan Yifeng quipped: "No wonder Singaporean men can't get wives."
A local netizen posted this topic in an online forum in May. Till today, the topic has raged on, with many forummers posting their comments and opinions. The thread has accumulated more than 200 responses so far.
Regarding the minimum that a man should earn, a reporter from the Chinese daily posed this question to 20 men and women. Most of them said that having a salary that is good enough to sustain your lifestyle would be sufficient. However, most agreed that $4,000 to $5,000 is a "reasonable amount" if one is thinking of setting up a family.
Without that minimum amount, they reason, it would be difficult for a man to support his wife, let alone think about having children and allowing them to grow up in a comfortable environment.
>> Mr Su Jun Long, 27, an accountant, earns $2,400 per month. He says: "I am not worried about not finding a wife, especially not a materialistic one. Actually, it is not important how much I earn, but more of how much I spend. However, when I am thirty-plus, I would also hope I am able to earn a minimum of $3,000 and above."
>> Mr Zhang Yi Zheng, 26, an auditor, earns $2,100 per month. He says: "$4,000 to $5,000 is a reasonable amount to expect. But at my age, it is normal to earn only $2000 plus. My girlfriend earns about the same amount as I do."
>> Mr Huang, 30, an IT personnel who earns $2,500 per month, says: "Contentment is key. Money is a factor, but it should not be the main consideration. Having a low income would be a problem too, so a salary of $4,000 to $5,000 is not too much to ask."
>> Ms Shen Yu Tai, 27, a bank officer, says: "Actually, $2,000 is enough. But it is understandable that women would require their husbands to earn $4,000 to $5,000. After all, we all want to be able to live a comfortable life. That amount is required to start a family as well."
>> Ms Pan, 27, a writer, says: "It is not important how much he earns, but he must be good at saving. The salary ranges for industries differ, so there shouldn't be a specific requirement, as long as he earns above $2,500.
>> Ms Tan, 30, a customer service officer, says: "Realistically, an income of $4,000 to $5,000 should be expected. Generally, as long as you have a degree, and have worked for a few years, you should be able to draw that amount."
The headline is more dramatic than the article. The surveyed people didn't ask for $4,000 outright. They said it would be a good figure.
What is the household income that these people expect? If everyone expects the guy to bring $4,000 to the table, then how about the girl? $0? $2,000? $4,000? That means a household income of $4,000 to $8,000.
I posted this on an online forum:
Your personal outlook depends very much on your re-employability, savings and debt.
Able to get re-employed (with similar renumerations)? No worries.
A few months of savings/retrenchment benefits to tide you over? No immediate worries.
Not much debt? Another stone off your back.
I don't have to mention the two most common debts in Singapore.
Imagine having to fork out $900 from CPF every month for your flat and $700 for your car loan. How many months can you survive unemployed?
In the corporate and business world, it is called succession planning when staff with potential are trained and groomed to provide the next level of support and leadership.
They are given all the opportunities, resources and exposure to prepare them for the career path ahead. This is no different from similar preparation in the political arena.
At home, the same is also true. Many families, especially Chinese ones, want a son to carry on the family name.
The son is favoured not only for his role in maintaining the roots of the ancestral tree, but also his ability to provide, hopefully, an umbrella for his parents in their old age.
Parents these days are prepared to have smaller families so that they can give their children the best life can offer.
It is not uncommon for some parents to even buy their children a car or a marital home. Call these actions by whatever name you want, but it all boils down to two fundamental reasons: kiasuism and over-pampering.
The hope is that their children will take care of them or provide them with a roof over their heads when they are old or sick.
However, there are many cases where grown-up children regard looking after parents and parents- in-law as a cost and a liability.
The most popular option these days is to send the parents to an old-age home, where they remain for the rest of their days.
Usually, the more well-to-do the family is, the more commonly this option is taken. This is because it doesn't come cheap.
The reasons (or excuses) are various: Everyone is working, there's no one to take care of them, the house is too small, the children are growing up and there are not enough rooms. Or: Why me, when there are other sons?
No wonder nursing homes are doing so well. Families are passing the buck to others just because they can afford to pay.
Many residents in old folk's homes have not had a single visitor in weeks, months or even years after their admission.
Imagine the loneliness of aged parents as they face four walls, with no one to talk to. Being immobile, it's worse than serving a jail sentence.
The reality of life in a nursing homes is eat, sleep and wait for death.
Interestingly enough, sending parents away to nursing homes does not contravene the three-generation HDB concept (as the aged still keep the same registered address).
Dependants can still pocket an annual government grant given to those who share the same address as their aged parents.
Those who dump their parents in homes ought to realise that they will eventually meet the same fate. The day of reckoning will come when their own children follow their footsteps and let them have a taste of their own bitter medicine.
It's more important to earn money in your prime. That's how the society is today.
As to "it will happen to you", just accept it as the new reality.
MC is only claimable if you are sick. If you are healthy and don't fall sick throughout the year, your MC (usually 8 to 10 days) is "wasted".
It requires money to see a doctor, that's why people don't abuse it. Not so if your company offers the clinical medical plan. With this, you can see the doctor as many times as you like.
My company's clinical medical plan is $150. If you see the doctor 4 times a year, you would have "break-even".
There are 14 winners in the $10mil Hong Bao draw. I've never seen so many winners sharing the pot. Looks like more people are trying their luck in this recession.
How do you feel a recession? I came across some postings online questioning whether the recession was real!
I guess they are still shielded.
Do I feel it? My company has put in some cost-cutting measures, and closed some departments, so yes, I feel it.
The Singapore Employment Act is not applicable for workers earning more than $1,600 p.m., don't bother to look it up. It's up to the company to decide on the retrenchment package.
The worst is of course immediate termination. The company is supposed to pay one month salary in lieu of notice, but they'll offset the leave first. It's fine if you are able to get a job immediately, but if not, the cash would help.
The usual package is one month for every year of service. Some companies give just two weeks for every year, that's bad. Some companies also cap at ten years.
ONLY last year, jobs were theirs for the taking. And they sought flexi-hours, interesting careers and a fun workplace. But faced with one of the worst job markets in decades, Generation Y is proving more adaptable and resilient than previously thought.
Bosses and recruitment companies are pleasantly surprised by the change they have noted in their youngest workers. Many have lowered their pay expectations, are shouldering more responsibilities to help cut costs, and even putting their firm's needs before their own.
Mr Colin Ng, 26, an IT graduate from Glasgow University, has been working as an intern at a software firm for three months for just $1,200 a month, in the hopes of being offered a permanent job.
'When I went for the interview, the boss wasn't sure I could do the job. So I offered to be an intern for three months,' he said. 'So far, so good. I am hoping to land the job eventually.'
Besides programming software, he has also been putting in extra hours making pitches to potential clients in the hope of landing a big contract for the company.
He is typical of Gen Y workers - born between 1977 and 1999 - known for being technologically-savvy, self-assured and able to multi-task, and who have invaded the workplace in recent years.
Gen Y numbers close to 400,000 persons aged 16 to 32 in the workforce, holding positions from interns to middle managers.
Figures released for the third quarter of last year showed that Singapore had some 17,300 jobless young people under 30. According to the Manpower Ministry they made up the largest group - about 31 per cent - of an estimated 55,800 Singaporeans who were out of work. At 4.1 per cent, the unemployment rate of this group was higher than the national average of 2.8 per cent. Analysts predict these numbers will spike in the coming months, as more fresh university and polytechnic graduates enter the labour market.
Their salaries are also heading downwards. Human resources firm The GMP Group estimates that the starting pay for fresh graduates will dip by as much as 15 per cent this year.
A year ago, diploma holders in the information technology field commanded monthly salaries of $1,800 to $2,000, while degree holders earned between $2,500 and $2,700. This is expected to fall to between $1,600 and $1,800 for diploma holders, and from $2,000 to $2,300 for degree holders this year, said GMP.
Recruitment agency PeopleWorldwide Consulting's managing director David Leong said the companies he represents are offering lower salaries, about 10 to 15 per cent less. On average, fresh university graduates can expect to earn about $2,000.
According to Gen Y expert Ms Cheryl Liew-Chng, 41, who runs Lifeworkz management consultancy, the recession has been a sobering reality check for this 'entitled generation'.
'They are used to a world in which jobs were plentiful and firms fell over one another to recruit them. Now they are lucky to be invited for an interview,' said Ms Liew-Chng who runs courses on managing Gen Y workers.
Employers agree that they are shortlisting fewer applicants. But they have been pleasantly surprised by those they interviewed.
Mr Stephen Tjoa, executive director of human resources at KPMG said Gen Y applicants used to be 'very specific' about what they wanted to do at the auditing firm. 'Now they leave it to the firm to decide how best it can use them,' he said.
He added that KPMG carried out its annual mass recruitment exercise at the end of last year, but trimmed the number it took in to 200, about 10 to 20 per cent fewer than the previous year.
Computer gaming accessories company, Razer, a favourite employer with Gen Y because its 'fun' work culture allows them to de-stress on pinball machines and the pool table, says its 20-something employees have shown that they are not all about play. About 60 per cent of its 80 staff are under 30 years of age.
When it comes to crunch time, Razer's chief operating officer Soh Yeow Teh noted that his young employees buckle down to work. 'Don't be surprised when you see them stay long after hours just to get things done.'
Indeed, with their resourcefulness and energy, Gen Y workers are proving to be a boon to firms struggling to cut costs and stay afloat in these lean times.
Mr Augustine Sim, 44, who owns a company that sells handicrafts to the Middle East, said he has particularly benefited from Gen Y's technology skills.
'Business has been slow so I enquired about setting up a website. It would have cost me over $10,000 which I don't have.
'Fortunately, two of my young workers offered to do it for me for free. All I had to do was organise a night out for them at Clarke Quay, and pay for food and drinks.'
Gen Y hires are also good value, in that they can juggle multiple portfolios, travel at the drop of a hat and do not mind venturing to new markets to scour for new business.
Said Mr Aaron Lim, 48, who recently started an education business: 'One of my new hires, a business graduate, can set up websites and do marketing and sales. And he is willing to travel to the depths of China or inner Mongolia to look out for new student markets.
'Although times are bad, I am hanging on to him.'
As bosses like Mr Lim indicate, another plus for Gen Y hires is that once they get a job they are more able to hang on to it.
Their skills and the fact that they cost less than older workers means they are more value for money. MOM data shows they account for only 9.2 per cent of those retrenched in the third quarter of last year. Those in the 40s accounted for 37.1 per cent.
But for those out there still on the hunt for jobs, the going has been tough. Many like Ms Teo Wan Choo, 21, a Nanyang Technological University accountancy student, who will complete her course in April, have yet to land a job. Ms Teo is now considering teaching as a Plan B.
'I always thought of giving teaching a shot but later on after a few years in the private sector after I made some good money. But now it looks like I may have to go into teaching direct if nothing else comes along.'
But what happens if despite lowering their expectations they are unable to find a job? The irrepressible Gen Y has many ideas.
Two out of eight youngsters interviewed said they will set up online shops selling accessories such as second-hand handbags and hand-made jewellery.
Some like Ms Claudia Lim, 27, have already plunged into setting up their own businesses. Ms Lim set up a social media consultancy firm, 24seven, to help businesses market themselves through blogs and websites.
'I don't see a downturn, just more opportunities,' says the technology-savvy Ms Lim who holds a business diploma from the poly and a teaching diploma from the National Institute of Education.
Polytechnic business graduate Rosie De Cruz, 20, who has taken a shiatsu massage course at a beauty and spa academy here plans to offer elderly people home massages for $80 an hour.
Ms Liew-Chng is optimistic that such flexibility will help Gen Y ride out the recession better than their predecessors.
However, not all employers agree that their young hires have come to terms with today's harsh market conditions.
Mr Desmond De Costa, 50, who runs a food catering service, rants: 'I had a couple of 22-year-olds quitting on me, because I did not give them the Saturday and Sunday off for them to attend the rave party Zouk Out last month.
'They don't seem to care about holding on to their jobs in these hard times. They need this recession to grow up.'
I feel so old...
More seriously, the article says very clearly that younger people are not just cheaper, but are also more tech-savvy. Older folks are fine in their current positions. But if they are retrenched, good luck.
I was away for four days during CNY. I switched off all appliances except for the fridge and the aquarium. When I came back, the meter showed that they used an equivalent of 80 kWh per month. (Water and gas usage were zero, as expected.)
80 kWh costs about $18 today. My latest bill was $60, the gas accounted for $9. I also used 4.3 m^3 of water, double my usual amount.
I can achieve $30 easily: by switching off the fridge, not using the gas and using less water.
I posed this question to HDB. Let's see what the answer is.
Suppose two siblings, A and B, have fully paid for their HDB flat.
Now, A is going to get married and wants her husband to take over B's share. He does not have enough cash to buy over the share, so he wants to use his CPF and take a bank loan to do so. Is it possible?
Note that the HDB flat is fully paid for. A, A's husband and B are all Singapore PRs.
If this is not possible, then is it possible for A and B to sell the flat to A and A's husband? Isn't this very strange for A — to sell and buy back the same flat?
I suspect the flat must be sold, because you cannot re-mortgage a fully paid-up HDB flat. But, I'm not 100% certain.
My brother's GF's elder brother is getting married in the second half of the year. He and his wife plan to get a new flat before that. He is currently a co-owner with his sister for their current flat, so my brother has to take over his share.
Once he does that, I am on my own. My worry? The rent.
I believe HDB gives 6 months grace period, so the dust may only settle early next year.
What can I do about the rent?
Negotiate. Sure, but it won't go down much. Perhaps 10% to 15%?
Look for sub-tenants. Okay. But will it work out? The sub-tenant will definitely not accept a rental split of 50-50, since he gets just a room, so perhaps 33-66.
Move in with my brother. A few reasons why I don't want to do so: lack of privacy (for me!), lack of storage space (I have a lot of stuff) and parental visits (from both sides).
I have removed the CC category.
Since the 90s, or perhaps earlier, every generation has bought into the myth that land in Singapore is scarce, and hence property prices can only go up.
IMO, this is blown out of proportion. I used to believe it, because HDB prices do go up on a one-way track most of the time. It is imperative to buy now — even with 30-year mortgage — because prices will be out of reach tomorrow.
But as time goes by, I realized I have never actually seen land being scarce. New estates go up. Old flats are pulled down and new ones built in their place.
Even downtown, there are parcels of land that are left undeveloped. Old condos are ENBLOC'ed to make space for newer ones.
Shortage of land? I no longer think so.
With the Governments all over the world pumping so much into their banks and economies, is inflation a worry?
Two reasons why not:
I doubt there will be wage increase any time soon. Companies are cutting costs to survive. If people cannot afford the goods, there's very little headroom for prices to go up.
From HDB's website:
HDB flats can only be mortgaged to banks or financial institutions to finance the purchase. HDB owners are not allowed to use their HDB flat, which has been fully paid for, as collateral to raise credit facilities.
The only way to raise cash is to sell the flat.
From the HDB website, it seems when you buy a flat, you sign the Agreement for Lease? What? Aren't you buying a flat?
Many people are upset about paying the GST and want it to be lowered to 5%.
There are two main ways to collect tax from the populace: personal income tax and GST (Goods and Services Tax). Income tax is progessive, because it is (usually) tiered and the more you earn, the more you are taxed. GST is regressive because it is flat rate, so the poor pay more as a proportion of their income.
The Government likes the pay-as-you-use approach. Another example is ERP. While I dislike paying GST and ERP as much as the next guy, I like them better than paying high income tax and high COE.
Thus, I think GST is a good idea. I prefer to be taxed when I spend, rather than when I earn it. This is because earnings can be saved. Likewise, I can choose to avoid ERP zones.
Also, it is currently possible to escape GST if you buy overseas (limit to $400 per shipment, including shipping).
The Government does try to mitigate the regressive nature of GST by giving out GST tax rebates. Suppose you get a rebate of $200, that means your first $1,400 purchase (in a year) is GST-free. That may or may not be enough to cover your basic needs, but you can't say the Government doesn't try to help.
The Government also gives out GST credits to Singaporeans. This works even better! Everyone pays GST, but only Singaporeans get the GST credits.
There are suggestions to have lower GST on "essential" goods. I thought it was a good idea at first, but the Government's reply was, "what are essential goods?" Good question!
Thus, I think giving out GST credits and rebates and letting the individual decide what is "essential" is the best.
I foresee that the Government will try to increase the GST to 10%. It's a nice round number that makes it easy to calculate how much tax you are paying.
SINGAPORE'S Finance Minister has warned that the worst of the credit crunch is yet to come.
The world's biggest banks still have toxic assets on their balance sheets, which are clogging up their ability to lend, Mr Tharman Shanmugaratnam said in an interview with Bloomberg Television on Wednesday.
The finance ministry oversees Government of Singapore Investment Corp. and Temasek Holdings Pte, each managing more than $100 billion. The state-owned funds invested about US$24 billion (S$36 billion) in UBS AG, Citigroup Inc. and Merrill Lynch & Co in the past 14 months, said Bloomberg,
Banks are still focusing on replenishing capital 'and estimates of the extent of bad assets on their books are still on the upswing,' said Mr Tharman. 'We haven't seen the worst yet.'
Bank losses worldwide from US-originated bad assets may reach US$2.2 trillion, the International Monetary Fund said on Wednesday, more than the US$1.4 trillion it predicted in October. US President Barack Obama's administration and federal regulators are considering setting up a 'bad bank' that would absorb illiquid assets from otherwise healthy financial firms.
Governments across Europe have injected capital into banks to ensure that lending to companies and consumers doesn't freeze up. European Union regulators yesterday approved France's plan to increase its funding for recapitalisation of banks including
BNP Paribas SA and Societe Generale SA to 11 billion euros (S$21.6 billion), from an initial proposal for 10.5 billion euros.
Ireland's government last month said it would invest 2 billion euros in Allied Irish and Bank of Ireland, the country's biggest lenders.
'Foot the bill'
'It's right that governments are focusing on recapitalisation in the West and they're trying their best to incentivise new lending,' Mr Tharman said. 'It's too early to say how successful this will be. Governments have to take more risk, and that means taxpayers have to be willing to foot part of the bill.'
The IMF report released on Wednesday signalled that writedowns and losses at banks totaling US$1.1 trillion so far are only half of what's to come. Losses on that scale would leave banks needing at least US$500 billion in fresh capital to restore confidence in their balance sheets, the fund said.
Singapore's leaders have defended the performance of the city's state-owned investment companies after a plunge in the value of their stakes in Citigroup, Merrill Lynch and other global banks.
GIC, which manages the country's reserves, invested about $18 billion in UBS and Citigroup since December 2007. Temasek, which has a $130 billion portfolio, increased investments in Merrill Lynch and Barclays Plc as the credit market collapsed in 2007 and 2008.
Temasek was the biggest shareholder in Merrill Lynch before the securities firm was taken over by Bank of America Corp. It is also the largest shareholder of banks including London-based Standard Chartered Plc and Singapore's DBS Group Holdings Ltd, and has holdings in India's ICICI Bank and other lenders in Indonesia, South Korea and Pakistan.
Temasek and GIC remain 'well diversified' enough in their portfolios to offer the long-term returns the government seeks, Mr Tharman said.
'We would be very worried if global banks comprise a large proportion of the portfolios of GIC or Temasek, or for that matter, any of the highly vulnerable industries globally,' the minister said. 'But these are diversified portfolios.'
Temasek and GIC have performed 'credibly by international standards,' he said. Temasek had an average 18 per cent annual return on investment since its inception in 1974. GIC said in September that annual returns in the past 20 years averaged 7.8 per cent in US dollar terms, compared with about 6 per cent for the MSCI World Index.
GIC last year also said it's boosting investments in emerging markets, private equity and other asset classes to raise returns after cutting back stocks and holdings in developed nations.
'I'm comfortable with the actions both Temasek and GIC have taken early in this crisis to reduce risk, to move into more liquid asset allocation and to prepare for opportunities in this downturn,' Mr Shanmugaratnam said. 'We've got to make sure we maintain that record of prudent investments for the portfolio as a whole, diversifying risks, and being prepared for crises from time to time.'
Governments are always late to the party. Well, Obama is trying his best to save the US economy. Let's see what he can do.
I went to McDonalds for dinner with my father. Surprisingly, it was my father's suggestion. I was surprised because I thought my father dislike fast food.
I was shocked to find that a Big Mac meal cost RM9! They also have the Big N Tasty burger (RM10 for meal) — my favourite burger in normal times — but I ordered the Prosperity burger instead (RM14 for meal). The pepper sauce and onions get me every time.
Even I find it expensive, with S$1 to RM2.40. How do the locals afford it? The last time I went to McDonalds — a few years ago — prices were roughly RM2 cheaper. And I thought that was expensive.
My father was undecided, so I asked him to try the Big N Tasty burger. I like this burger very much. I always thought it was the equivalent of Burger King's Whopper burger, which I also like very much.
The Big N Tasty burger came in a rather big box (by McDonalds standards), but my father was unimpressed. He said it was very small! I told him it was the biggest burger already (with the exception of the Quarter Pounder)! The burger was rather flat, much to my disappointment.
As we were enjoying our meal (and the freezing air-con), a big group of almost 20 came in for dinner. Wow, that must be a cool RM200 dinner. Even the manager went to take their orders, rather than the other way round.
I found that Subway sells its tuna sandwich at $4.50. That's cheap! However, they give very little tuna, that's why.
Today, I tried their foot-long sandwich. It was a flat-rate $3.40 more, so it wasn't really worth it for the $4.50 sandwiches. It's more worth it for the $6.50 sandwiches.
The Singapore Government announced that it would pay 12% of the first $2,500 of an employee on the CPF payroll.
I think this is an innovative way to distinguish between Singaporeans and foreigners!
It is said that this is equivalent to 9% CPF cut, but I don't see why. (Why isn't it 12%?)
I foresee the new Workfare scheme will fail. Employees are supposed to get 50% more, but I think employers will just reduce the employees' pay so that they get the same amount with the additional Workfare payout.
Update: I read an interesting post how an employer can take advantage of the jobs credit scheme.
Fire a senior employee earning $5,000 and hire two at $2,500. The employer gains 12% x 2 and the unemployment statistic goes down by one. Wonderful!
The news said the budget will not be a normal budget. I wonder how so?
When it was time to buy a "retirement" house for the father to live in, the second son wanted to pay for it, perhaps as his long overdued obligation to his father. He was the favourite son, always given the best, including education, yet he sort of broke contact with his father after he grew up and moved away.
His wife objected. His siblings should contribute too, she said.
Of the siblings, the eldest son was the richest, the second son was the most successful (and also quite rich), the third daughter was unfortunately immoblized with a stroke, the fourth daughter was living an ordinary life, and there were three other siblings who were staying with the father; they eked on a very constrained budget.
Hence the eldest son chipped in half. The other siblings were in no position to help. He did not mind; it was a trivial sum to him. However, for personal reasons, he did not want his name to be on the deed, so the house was in the second son's name.
The three siblings took care of the father. The immoblized third daughter was in a nursing home.
The fourth daughter wired money back every month. Most of the expenses were covered by the fourth daughter's passive rental income. In addition, the eldest and second son gave money every year. It was customary for the fourth daughter to visit her eldest brother every new year to get an "ang pow".
Fast forward many years.
The father died. With it, the second son stopped his contribution. Perhaps it was very little, because the other siblings didn't make a big fuss of it.
Fast forward even more years.
A relative notified the other siblings that the second son was on his deathbed. He had gone for his last cancer therapy overseas and the doctor had told him to wait out his end.
I'm sure the reader is curious what happened to the house.
It was too late to bring it up. The second son died in just two weeks time. The house remained under his name. He did not transfer it to his siblings before his death, nor did he will it to his siblings.
All the siblings did not have good relations with the second son — especially with his wife — so none of them attended his funeral. This situation could have arisen because the second son was the favourite son. The eldest son, for example, did not want to talk to his brother directly. Everything went through their fourth sister.
Everything stays as-is for now. The three siblings continue to stay in the house. It is not known what the second son's wife would do with the house. Would she try to claim the house and drive the siblings out? Would she sell it off? And would she give half the proceeds back? Would the other siblings have a case if it went to court?
Recently, the second son's wife asked the fourth daughter to pay the property tax, so it was clear she did not want to pay for the house's upkeep.
I expect some drama to unfold in the future.
You know the old saying: there is a difficult-to-read bible in every family (translated from Chinese literally).
Singapore's population may shrink in the next two years as "sizeable" job losses amid the city-state's deepest recession force 200,000 foreigners to leave, Credit Suisse Group said.
About 300,000 jobs may be lost by 2010, two-thirds of which are held by foreigners and permanent residents, economists Cem Karacadag and Kun Lung Wu wrote in a report received today. The number of people on the island nation may fall by about 3.3 percent to 4.68 million by 2010, Credit Suisse said.
Companies in export-dependent Singapore are firing workers as demand for goods and services ebb. More than 10,000 people were retrenched last year and a worsening economy may result in job losses tripling in 2009, reaching numbers not seen since the Asian financial crisis a decade ago, the government said.
"The contraction in exports and output and consolidation in financial and business services could lead to sizeable job losses, which, in turn, may drive as many as 200,000 foreigners and permanent residents out of Singapore," the economists said. "These levels of job losses and population decline would be unprecedented."
Singapore's economy may shrink 2.8 percent this year, Credit Suisse predicts, making it the Southeast Asian nation's worst annual contraction in its 43-year history. The government says gross domestic product may decline as much as 2 percent.
Last week, the National Wages Council, which represents government, employers and union groups, advised companies affected by the deepening economic slump to freeze or cut pay rather than fire workers.
About 30,000 workers were retrenched in 1998 and some 26,000 lost their jobs in the 2001 downturn, acting Minister for Manpower Gan Kim Yong said yesterday.
Immigration is a key component of Singapore's population strategy, as incentives offered since 1987 to arrest a declining birth rate by offering tax breaks, subsidies and cash bonuses failed. Singapore, a quarter the size of Rhode Island, has no natural resources and the government relies on the skills of its populace to generate economic growth.
The nation's population jumped 17.6 percent in the five years to June 2008, and foreigners made up three-quarters of the increase, the Credit Suisse report said. Foreigners and permanent residents filled 61 percent, or 484,700, of the 796,000 jobs created between 2004 and the third quarter of 2008, the analysts estimated.
Singapore's employers added more than 435,000 workers to their payrolls in the seven quarters to September 2008, according to the Ministry of Manpower.
"As harsh as our assumptions may seem, they only imply that the economy gives up all of the jobs it created in 2008 and a portion of the new jobs in 2007," the economists wrote.
About 160,000 positions in the services industry may be lost, while manufacturers may fire 100,000 workers, Credit Suisse predicts. The construction industry may cut 40,000 workers, it said.
"The potential drop in employment and population would have far-reaching implications for the economy," wrote Credit Suisse analysts Sean Quek and Kwee Hong Ching. "Private consumption could contract in both 2009 and 2010."
The unemployment rate, at 2.2 percent as of September 2008, may rise to 5.6 percent by 2010, the highest in more than two decades, they said.
Job cuts rose "significantly" last quarter, and both unemployment and layoffs are expected to be "substantially higher" in 2009, the National Wages Council said last week.
200,000 over two years? I can't imagine what that does to the property market.
I'm scared, very scared. Will I be one of them?
ONE of the country's sacred cows could be slaughtered during the Budget this Thursday, as the Government mulls over a move to dip into Singapore's rainy-day savings: the national reserves.
The leaders are now considering the unprecedented step of drawing from the reserves to fund the aggressive pain-relief measures needed in this downturn, Senior Minister Goh Chok Tong disclosed on Sunday.
'The issue which the Prime Minister and the Minister of Finance are now thinking over, is whether we should go to the President and ask him for approval to use the reserves for extraordinary measures,' he told reporters after giving out $100 hongbaos and goodies to the low income in his Marine Parade constituency.
But he also cautioned: 'It's a difficult decision because once you do that, you may open the reserves for future demands, which may not justify the use of reserves.''
On Friday, Prime Minister Lee Hsien Loong had said the Budget will run into a deficit this year and, if necessary, the Government will dig into the reserves.
He told reporters after a lunch with unionists: 'The Government's job is not to do everything which is asked for but to look to see which are the items which will be most effective and then how do I raise the money which I need to fund all the things which I need to do, either from the Budget revenues this year or from the reserves which we have accumulated."
A move to tap the sacrosanct reserves would be one more sign of how seriously the Government views the downturn.
Last year, it had already modified the rules to allow it to spend a larger chunk of the investment returns from the reserves.
But in 1999, in the aftermath of the Asian financial crisis, the Government had shied away from going to the reserves for funds, even in the face of a $5 billion Budget deficit. Mr Goh was the PM then.
Yesterday, however, he pointed out that a 'muscular response' in the upcoming Budget is needed as these are exceptional times - and the key issue is to save jobs.
'There must be exceptional measures for exceptional times,' he said.
He gave a sampling of the dire economic news coming in, noting the sharp dive in export figures last month. Singapore's exports plunged 21 per cent in December, the biggest fall in almost seven years.
'The weather is so bad, and we've always said the reserves are for a rainy day. If this is not a rainy day, I don't know what is a rainy day,' he said.
I wonder why the Government would not consider cutting the CPF this time round.
Perhaps if the CPF is cut, even more people will default on their housing.
It's actually quite funny when you really think about it, the US's printing of money to bail out a sinking ship that was inflated by the printing of money that led to a massive debt and property bubble in the first place.
Of course, with millions of jobs on the line few people would see the humour in the US's present plight, but neutrals who have observed the goings-on of the past 15 months would surely appreciate the irony of the present, constant plugging of holes in the US with ever-larger cash injections that so far, have had no effect.
Optimists - and these ranks would be heavily populated by brokers and investment bankers - might believe that with so much money being flung at the problem (latest estimates is that the US rescue bill is closing in on US$1 trillion and climbing) things must improve, maybe even as early as the second half of 2009. If so, then now is the time to buy.
Pessimists would counter that when a bubble economy collapses, it usually enters a long period of stagnation and possibly depression. (We are reminded here of Ronald Reagen's famous declaration that 'a recession is when your neighbour loses his job; a depression is when you lose your job').
A case in point is Japan, whose property bubble burst in 1990, leading to a stock market crash. Its government immediately cut interest rates to zero (as has the US Federal Reserve now) and expanded its budget deficit sharply (as the US government already has). These actions did manage to avoid an economic collapse but there has been no recovery - Japan has had five recessions in 18 years and the latest looks like being the worst. After repeated failed bear rallies, its stock market is still more than 70 per cent down from its all-time high.
A neutral in the meantime, might say the jury is still out on whether simple money printing and expanding the budget deficit will work because a heavily indebted consumer who has no job cannot help spend the economy out of its mess. As such, scepticism should be the order of the day - until clear signs to the contrary emerge.
Optimists might argue that with so much volatility, it's best that investors shorten their horizons and if so, the impending inauguration of President Obama in the US on Tuesday, the Singapore government's impending Budget announcement on Thursday and Chinese New Year soon after might mean now is a good time to buy because there could be a 'Chinese New Year rally'.
Pessimists would say that any such rally would be largely through short-covering and would be temporary at best, and that if one does occur, investors should continue to sell into strength since by the government's own admission, conditions have actually worsened since the start of the year.
A neutral would reply that cash is king and nobody knows where the bottom is but they would note that all urgings to buy have come from brokers and investment bankers who were painfully wrong last year and should therefore be afforded minimal credibility in the investment advice stakes.
Optimists would reply that 15 months into the bear market may be sufficiently long for the market to fully discount all the bad news, so present prices probably already reflect the worst.
Pessimists would point out that prices are only being kept afloat by the US government's bailout money and that if these efforts fail, the downside can be massive. US stocks are only at their lowest in 10 years, which does not gel with an economy mired in the worst depression in 70 years.
A neutral would observe that the market has demonstrated huge inefficiencies over the past few years, failing to recognise risks when they were staring everyone in the face and instead believing the now-discredited mantra that 'this time is different'.
As a result, the smart thing to do is stay away from stocks until the ranks of optimists thin significantly, the ranks of pessimists swell appreciably and above all, much clearer signs of capitulation appear - especially in the US, because it can only be a matter of time before this occurs.
It's quite clear which side of the bread this columnist is betting on.
I had tea with a group of colleagues recently and the topic of our company's share ownership came up.
Our company allows us to set aside up to 10% of our salary to purchase its stock. The money is withheld and is used to purchase the stock twice a year at 15% discount.
It was, in one of my colleague's words, a "no-brainer risk-free" investment. Even if you don't believe the stock will do well, just sell it off immediately to realize the 15% profit.
I was rather surprised that a high number of them (four out of six) maxed out their contribution. They were equally surprised that I didn't.
My current approach is value-investing and going for capital gain. However, it's not incompatible with taking quick profit. A possible setup is contributing 10%, but only keeping 2%.
Investors in a Sarasota-based hedge fund could be out $350 million, and the man behind it has vanished.
Managers of the fund are telling clients that their money is gone, and they do not know if any will be recovered.
Fund principal Arthur G. Nadel, a prominent player in Sarasota social and philanthropic circles, disappeared this week. His wife, Peg, filed a missing person report with law enforcement after finding a suicide note.
Investors — from individuals to the Sarasota YMCA Foundation — in the funds branded Viking, Valhalla and Scoop were stunned this week to learn they may be victims in what could become the largest investment swindle in Southwest Florida history.
Despite the carnage on Wall Street last year, investors had been told their investments earned more than 8 percent as of November.
Some are already calling it a "mini-Madoff," after accused investment scammer Bernard Madoff of New York, who has been accused of creating an alleged $50 billion Ponzi scheme that yielded similarly large percentage returns.
"I feel abused. I feel beaten. I don't know who to believe," said Dr. Brad Lerner, who expects to lose nearly $730,000 in an IRA fund with Nadel and Moody.
Neil V. Moody, the president of Viking Management, declined to respond to interview requests.
In a statement issued Thursday to investors, Moody confirmed the funds appear depleted.
"Unfortunately, just yesterday afternoon we became aware of an extremely serious situation suggesting that the funds may have virtually no remaining value," Moody wrote.
Moody, who lives part time in Evergreen, Colo., has told several investors interviewed by the Herald-Tribune the funds value totaled $350 million. He said he has contacted the U.S. Securities and Exchange Commission and "all appropriate authorities" to report the situation.
Moody is telling clients that Nadel did all the fund trading, and that Moody had no idea anything was wrong until this week.
Nadel, 75, and Moody, 70, operated under the name Scoop Management Inc. in a double storefront at 1816 Main St., across from the Bank of America building.
Management appeared in a state of turmoil. Peg Nadel and son Geoff Quisenberry said they could not comment on the size of the company's assets under management, the number of clients, how much has been lost, or even whether it is accurate to call them a hedge fund operator.
"The way I want to be represented is we are totally open and cooperative with all our clients and the authorities, and that includes the SEC," Peg Nadel said. "We have nothing to hide. But until our counsel has a statement prepared for us to make public, we cannot comment on what is happening here."
She and Quisenberry both denied reports that employees were emptying out the office.
The Nadels were known for their civic activities, serving on boards and donating money.
Habitat For Humanity, Jewish Family & Children's Services and Girls Inc. all received cash gifts and pledges from the couple in recent years. None had any money invested in the hedge funds.
"We're very fortunate in that way," said Rose Chapman, president of Jewish Family & Children's Services. Moody was co-chair of the organization's capital campaign.
"We've received gifts from them over the years, but they were all cash," said Stephanie Faltz, Girls Inc.'s executive director. "We had no funds with them. The Nadels have been very generous. This makes me very, very sad."
At Habitat For Humanity, the Nadels were the home building charity's largest donors. Last year, at the group's "Hammers & Hope" fundraiser, Peg Nadel pledged an equal amount if Habitat raised $250,000.
The Nadels also own the Venice Jet Center, which has been at the center of controversy in Venice over its efforts to expand.
Investors interviewed by the Herald-Tribune said they realized something was wrong when they failed to receive their December statements, or when they did not receive requested distributions.
Scoop could not meet a year-end demand for $50 million in withdrawals from investors, Lerner said.
He said he invested $500,000 in the Viking IRA Fund three years ago, and through November it had grown to $729,844. The fund managers claimed the fund had earned 8.56 percent in 2008, down only in October, during a year when Wall Street suffered catastrophic losses.
"I had no reason to believe it wasn't real," he said.
Moody contacted him Thursday to say that his money was gone and that Nadel had disappeared.
Lerner, a physician specializing in internal medicine, was one of several investors who filed reports Friday with the Sarasota Police Department.
Another local investor, who requested anonymity, said she had asked for a year-end distribution but was stalled for a few days. Moody on Thursday admitted to her that "Art Nadel was missing with all the money." She had invested with the firm for 10 years.
And it is not just individual investors. Local foundations also appear damaged.
Until Thursday, the YMCA Foundation of Sarasota believed that $1.1 million, or 13 percent of its total assets, was generating returns of at least 10 percent per year in the Valhalla Management L.L.C. fund.
Moody, a director of the YMCA and first vice chair, informed YMCA president Karin Gustafson on Thursday that the money is gone. He resigned from the board at the same time, she said.
Moody, also well known in social and civic swirls, made an initial donation in January 2005 and bumped the total up by $1 million starting in 2007 and into 2008, Gustafson said.
"Neil made a significant gift but asked that it be invested at Valhalla," she said.
"With Neil's fund, because it was outside our investment guidelines, he did a personal guarantee of 10 percent," she said. In other words, if the fund did not generate at least 10 percent per year, Moody promised to make up the difference.
The YMCA received regular reports from Scoop Management, with the last showing a November balance of $1,188,000.
Gustafson could not describe how the money was invested.
Hedge funds are basically private investment pools for wealthy, sophisticated investors. Many are organized as partnerships with a general partner managing the fund's portfolio and making investment decisions.
Minimum investments can be high — $100,000 is not unusual — and the funds can be risky. Hedge funds typically target a specific range of performance and attempt to produce targeted returns regardless of the underlying trends of the stock market.
In a 2003 report, Sarasota-based The Wall Street Digest lauded Nadel's and Moody's experience, especially Nadel's "black box" computer trading program.
Some clients have contacted the Williams Parker law firm about their investments.
Lerner says he hopes there will be some concerted effort to recoup investors' money.
"I'm not optimistic at all," he said.
John Hielscher can be reached at 361-4875.
Repeat after me: never put all your eggs in one basket.
If I had any money in hedge funds, I would take them out right now. It seems they can't be trusted.
THE National Wages Council (NWC) wants companies hit by the worsening economic slump to introduce a wage freeze or pay cut to minimise layoffs, which are expected to surge after Chinese New Year.
It has also called on companies to reduce non-wage costs, adding that the Government could help them stay afloat by reducing business costs.
Those companies doing well are, however, urged to reward their workers with 'moderate' wage increases which should not be built into fixed wages but given as variable payments. Similarly, wage cuts should start with variable components bonuses, and management should lead by example, said the council yesterday.
However, it is not in favour of any cut in the CPF contribution rates.
The recommendations of the 13-member council are a revision of the guidelines it had announced last May when economic conditions were brighter.
The Government has accepted the new guidelines, saying they were 'timely' to cope with the financial crisis.
Though not mandatory, the recommendations are followed by most companies in Singapore.
In announcing the changes, NWC's chairman, Professor Lim Pin, said they were enough for now. The council, with representatives from the Government, employer groups and unions, will meet again in April or May, when it holds its usual annual meeting.
'Let's hope nothing too drastic happens between now and then,' said Prof Lim, indicating that more drastic measures will be taken if necessary.
The latest meeting, the second in eight months, reflects the bleak state of the economy.
It is only the third time in NWC's 37-year history that guidelines were revised way before the annual deadline. It did so in 1998 during the Asian financial crisis and again in 2001, after the Sept 11 attacks on the United States.
The council said yesterday that retrenchments had started to rise 'significantly' in the fourth quarter of last year.
The extent of the increase will be known by this month's end when the Manpower Ministry gives the numbers.
Asked if the new guidelines will stave off retrenchments after Chinese New Year, council member Stephen Lee from the Singapore National Employers' Federation (SNEF) said: 'It can't prevent, but it can moderate retrenchments.'
The guidelines also included a call for companies to tap on the new Government-sponsored training programme, which gives employers more money to retrain, rather than retrench, workers.
So far, 170 companies have committed about 8,000 workers for the Skills Programme for Upgrading and Resilience or Spur. Another 2,000 jobless Singaporeans have also signed up.
The NWC also reminded employers to follow the tripartite guidelines on managing excess workers, which means considering other cost-cutting options like a shorter work week before cutting staff.
Council member Heng Chee How from NTUC said more than 18,000 workers from unionised companies have been put on a shorter work week since November.
Standard Chartered Bank economist Alvin Liew describes the guidelines as 'logical'. He expects the Budget next Thursday to further flesh out the suggestions by cutting business costs .
Other analysts, like Mr Leong Wai Ho from Barclays Capital, foresee more salary reductions, even a cut in employers' CPF contribution rate later should the recession persists.
Industry groups such as the Singapore Chinese Chamber of Commerce and Industry and the Singapore Business Federation welcomed the recommendations, in particular, the call for Government to reduce non-wage costs, such as rent and utilities.
Also backing the guidelines, SNEF noted that business costs rose 8.9 per cent in the first nine months of last year, compared to 2 per cent for the whole of 2007.
NTUC on its part called on companies not to let up on efforts to retain older workers, and improve employment terms for low-wage and contract workers.
Acting Manpower Minister Gan Kim Yong, at a separate event, said: 'I hope companies will take NWC's advice seriously and work with us to manage this downturn. If we can, we will be able to cut cost and save more jobs.'
This is just trying to paper over fire. In six months time, it'll be time for the real pain: layoffs.
Outlook is gloomier than it was a couple of weeks ago, PM indicates
SINGAPORE will revise its growth figures again ahead of Thursday's Budget announcement, Prime Minister Lee Hsien Loong said yesterday.
This second revision within a month is prompted by unexpected developments, he said, citing the steep fall in Singapore's December trade figures which show the economy of its major trading partners has taken a turn for the worse.
The gloomier state of the economy was also affirmed at his meetings with businessmen and unionists since last week, as he met 30 of them on four separate days.
Mr Lee told reporters that one company had built up six months' worth of goods with no buyers. At the PSA container terminals, cranes are lying idle. 'It's a situation which is already gloomier now than it was on New Year,' he said after a lunch meeting with unionists.
The day after New Year, the Government revised downwards this year's growth forecast to between -2 and 1 per cent, from November's projection of between -1 and 2 per cent.
In the past couple of weeks, growth and trade numbers in Asia and elsewhere have fallen very drastically, Mr Lee said.
Yesterday, Singapore reported that its non-oil exports fell by 21 per cent last month compared to the same month a year earlier.
Most economists interviewed expect Singapore's economy to contract by 3 per cent. Said CIMB-GK economist Song Seng Wun, who predicts a worst case scenario of between -2 and -5 per cent: 'We should be more aggressive in providing support for the local economy.'
The business and union leaders who met Mr Lee suggested reducing business costs such as property tax, and the rental of space from HDB and JTC Corporation.
Others want the Government's $600 million Skills Programme for Upgrading and Resilience to take in more professionals and middle managers. Unionists also urged Mr Lee to help middle-income workers, who are hit by the turmoil too.
The Prime Minister said the Government would need to balance the various suggestions, adding that the Budget will run into a deficit this year and if necessary, the Government will dig into the reserves.
'The Government's job is not to do everything which is asked for but to look to see which are the items which will be most effective and then how do I raise the money which I need to fund all the things which I need to do, either from the Budget revenues this year or from the reserves which we have accumulated.'
He also said that Singapore can make the necessary adjustments, 'but what happens after that depends on what happens around the world'.
Mr Lee declined to give specifics of the Budget but indicated it would not follow that of other countries in spending money to boost demand because of Singapore's open economy.
'People will spend it once and then most of the money will leak overseas and that's the end of the warm feeling.'
The Budget focus will be to help companies stay afloat and save jobs, so that workers can look after their families throughout the downturn, he said.
It will also deal with the longer-term concerns of competitiveness and creating new capabilities, he added.
This is important because employers, particularly multinational companies that have weathered previous crises, see long-term opportunities in Asia, said the Prime Minister.
They also think Singapore is a good springboard for exploiting these opportunities when conditions improve, he added.
One lunch participant, Mr Daniel McHugh, chief executive officer of express cargo carrier DHL Express (Asia Pacific), cited the government efforts to train and re-train workers as one reason for his confidence in Singapore. 'I've been in Asia for 25 years and I've not seen this level of government commitment to working with MNCs on people development.'
Mr Lee also gave his reason for holding his lunch meetings, as other ministers and government agencies have also sought views from businesses, unionists, grassroots leaders and members of the public on the Budget.
He said he wanted to have his own feel of the ground. 'I usually have a sounding of a range of views during the year and particularly before Budget. But this time I'm doing more because it's a very critical moment...it's not an ordinary Budget.'
Despite the gloomy picture, Mr Lee is heartened that unionists and bosses share similar views on the need to work together to keep jobs and companies viable.
'It's a tremendous strength for us, in a situation like this, which not many other countries would be able to do,' he said.
The situation is very bad, just that they don't want to let you know yet.
Until a few months ago, Amit Singh dreamed of buying a car. Now, with S$75,000 ($50,100) in the bank, the lawyer is holding back, saying he'll continue to make the one-hour commute to work on the Singapore subway.
"In these bad times, the buzzword is save, not spend," says Singh, 34. "It's not the right economic climate to be lavish or to have a luxurious lifestyle."
Singapore is asking its citizens, the world's third- wealthiest adjusted for purchasing power, to be prudent as analysts predict the worst economic slump in the nation's 43- year history. In speeches, pamphlets and ads, the government is advising people to switch to cheaper frozen meats, take shorter showers and skip the top-of-the-line mobile phone.
The island's strategy contrasts with that of other countries such as Japan and Taiwan, which are trying to boost consumer spending to spur economic growth as exports falter. Singapore, whose 4.8 million population is one of Asia's smallest, doesn't have a big enough home market to make up for falling sales overseas, so officials "are not even going to try" to tell people to spend more, says Vishnu Varathan, an economist at Forecast Singapore Pte.
"There's no way the domestic economy can make up for the slack in the external sector," he says. The message "is to bear with pay cuts and live frugally."
The government is preparing people for dwindling incomes as the nation's fourth recession in a decade forces companies including lender DBS Group Holdings Ltd., manufacturer Stats Chippac Ltd. and state-owned investment company Temasek Holdings Pte. to fire workers or trim salaries. Singapore last year unveiled more than S$5.4 billion in cash payouts, utility rebates and special funds, or S$1,700 for each of the nation's 3.2 million citizens, to help the poor cope with rising food and energy prices.
Officials say people also need to help themselves during the economic crisis. If everyone depends on the government, "we'll weaken ourselves as a society," Prime Minister Lee Hsien Loong said on Jan. 11, according to the island's main English newspaper, the Straits Times. "We'll cultivate a sense of reliance."
The World Bank predicts Singapore's $161 billion economy will be East Asia's worst performer this year. The government forecasts it may shrink as much as 2 percent, after expanding 1.5 percent in 2008 and 7.7 percent in 2007. Kit Wei Zheng, an economist at Citigroup Inc. in Singapore, says the contraction might be as much as 2.8 percent -- the most severe since Singapore gained independence in 1965.
The unemployment rate may more than double to 5 percent from 2.2 percent in September 2008, says Leong Wai Ho, a regional economist at Barclays Capital in Singapore. More than 30,000 jobs may be lost, he says, after about 400,000 new positions were created in the past two years.
That could boost the default rate on mortgages for government-built apartments, which house 84 percent of Singaporeans. The rate has risen to 8 percent from 5 percent in 2003.
Governments elsewhere in Asia are encouraging their more- sizeable populations to spend to counter the deepening global recession. Taiwan extended the New Year's holiday an extra day and is scheduled to distribute NT$3,600 ($108) shopping vouchers to citizens on Jan. 18. Japanese Prime Minister Taro Aso has pledged to give households 2 trillion yen ($23 billion) in handouts.
That may not work for Singapore, where private consumption accounted for 38 percent of gross domestic product in 2006, compared with more than half in Australia, Hong Kong, South Korea and Japan, according to the World Bank.
Singapore's leaders have traditionally preached restraint amid economic difficulties. In 2001, when the economy contracted 2.2 percent, the government refused to cap electricity prices and instead gave utility rebates to help the poor and encourage people to "save and not over-consume," then-Prime Minister Goh Chok Tong said in an August 2001 speech.
The government's latest campaign began last year when prices of food essentials including rice and cooking oil surged. As inflation soared to a 26-year high of 7.5 percent, Prime Minister Lee urged people to switch to frozen meats and in-house brands of supermarket products, which are typically cheaper.
The national power company ran television ads telling consumers to set air conditioners several degrees higher and use energy-efficient bulbs to combat rate increases of about 42 percent. A government-run community-development council distributed a brochure to homes in Singapore's most-populous district, suggesting people use less water and substitute meat with "cheaper and healthier" vegetables.
MoneySense, a national financial-education program run by the central bank, sponsored an advertisement in the Straits Times last month featuring a cartoon of a man showing off his new cell phone, then skipping lunch and subsisting on water because he had no money left.
Not everyone is getting the message. Alicia Leong, 29, received a 32-page booklet in her mailbox in December with tips on saving money. The next day, she spent S$1,200 on new clothes and a handbag, charging them to two of her seven credit cards.
"I still have a job, so I don't see the need to tighten my belt," says Leong, a teacher at a local high school. "I'll probably stop when my credit cards are maxed out."
Singaporeans rolled over a record S$3.5 billion in credit- card debt last November, about 18 percent higher than the year before.
Other people are taking the advice to heart. Jack Oh lost his job as an electrician when his employer went out of business in October. The father of three school-age children now drives a taxi and says he's cutting back on the Lunar New Year celebration, which begins Jan. 25.
"Last year, we went to a restaurant for the reunion dinner with my family, parents and siblings and spent over S$1,500," says Oh, 44. "This year, we're doing it at home, and I told my wife to get the cheaper abalone."
Now that the article mentioned it, I agree with the idea that Singapore can't spend its way out of the recession. The domestic market is too small.
Also, I wasn't aware that the Government wants us to cut down on our spendings. It is prudent to do so, of course.
SINGAPOREANS are preparing for the worst, with one in three expecting to lose his job during this downturn.
A poll by TNS and Gallup International found that workers' confidence has been dented by the global financial crisis.
Almost eight in 10 Singaporeans believe unemployment will rise this year as the country's economy declines, with gross domestic product expected to be between minus 2 per cent and 1 per cent.
The global poll was conducted between October and December last year, with 45,700 people in 46 countries interviewed.
In Singapore, where 1,000 people were polled, expectations seem bleaker.
Almost two in three Singaporeans say this year will be worse for them than last year, compared with a global average of 35 per cent who feel the same way.
Commenting on the results, Mr Wage Garland, managing director of TNS in Singapore and Hong Kong, said such pessimism follows the bad news and views expressed by leaders and business organisations which are carried in the media.
'Media reports of these types of forecasts, the financial difficulties of several major local retailers, falling property prices and the layoffs already taking place in some companies have made people realise that the global economic turmoil is having an impact on Singapore,' he said.
But what is surprising, he added, is that it has yet to undermine confidence in their own future. Despite the gloomy forecast, seven in 10 working Singaporeans are confident of keeping their jobs, even though most believe more people will be jobless.
But should they lose their jobs, almost eight in 10 Singaporeans fear it would take a long time to find a new one. Compared with people elsewhere, Singaporeans are more pessimistic, with the global figure standing at 54 per cent.
Gloomy or not, up to you.
She used to lunch at the exclusive Four Seasons. Now, the best-selling author jokes that she's inviting friends to Taco Bell. Call it gallows humor, but Alexandra Penney has just lost her life's savings.
She invested every penny with accused Ponzi-schemer Bernard Madoff. Penney thought she had weathered the bear market just fine, since Madoff put her money in super-safe Treasuries. Then, on December 11, she received a call from her best friend.
"She said, 'I hope this is a rumor, but I've just heard Bernie Madoff's been arrested,' " Penney recalls. "My other phone rang; it was my son. And he said, 'Mom, sit down.' He said, 'Bernie Madoff's been arrested.' And I said, 'For what?' And he said, 'He's a crook.' "
Madoff's alleged $50 billion Ponzi scheme disrupted a fragile financial system, affecting hedge funds and well-heeled investors on Wall Street, Florida and Europe. In a Ponzi scheme, money from new investors is used to pay off early investors to create the appearance of legitimate returns.
Conservative with her money, Penney says she has been working and saving since she was a teenager. She admits that her biggest fear was losing everything and "becoming a bag lady." About a decade ago, when Penney was in her late 40s, she shared her fears with a good friend, who steered her to Madoff, where she thought her money would always be safe.
Best known for the 1982 best-seller "How to Make Love to a Man" and as a former editor of Self magazine, Penney and her friend Evelyn Lauder were the first to use pink ribbons as a symbol for breast cancer awareness. Every success along the way meant more money, which was eventually invested with Madoff. She earned so much money that she was no longer writing and editing but living her dream as an artist.
Sitting in her artist's studio in the SoHo area of New York, she recently said she will start writing again to pay the bills. And she has a few choice words about Madoff, who remains under house arrest in his Manhattan penthouse apartment, where he lives with his wife while the case proceeds.
"Repulsive is mild. Loathsome. It's a visceral feeling. This is not humanity; this is not a human being. This is, again, it's a sociopath," Penney says. "I'm sincerely, and this is the understatement of the year, appalled that this man is not in prison."
But that could change soon if a judge decides to revoke Madoff's bail. In a court filing Thursday, the U.S. Justice Department accused Madoff of having signed about 100 checks -- worth a total of $173 million -- that were "ready to be sent out" before his arrest by the FBI on December 11 on a charge of securities fraud. Madoff investors might have to cough up withdrawals »
Prosecutors said the checks violate his $10 million bail agreement and said it was an attempt to prevent his alleged victims from recovering their losses. If convicted of the charges against him, Madoff, 70, could spend up to 20 years in prison and face a $5 million fine.
On the advice of her lawyers, Penney is not saying how much money she lost. She's not penniless, she says. She has a checking account that will last a few months, a West Palm Beach cottage, a Manhattan apartment and a "beach shack" in Wainscott, Long Island. Over the past 40 years, she earned and paid for all of it herself.
Penney is not asking anyone to feel sorry for her, especially after the acid-response to her first-hand account of her financial woes in a blog called "The Bag Lady Papers" on TheDailyBeast.com. In the blog, she talks about selling the cottage and possibly more real estate and taking her first subway ride in 30 years. She's even considered selling some of her expensive jewelry to pay the bills.
Some readers blasted her as a privileged New York princess. They told her to get a job. Others said they didn't feel sorry for her. Penney says she was surprised by the "vitriol."
"I've never been given a dollar. I never took alimony. I never inherited any money. So, sure, well, who else earned it? Me," Penney says.
Today, she says she has been "Madoffed."
When the phone rang last month with the news about Madoff's arrest, Penney was making a cheese soufflé. Ever the writer, she uses the soufflé as a metaphor. "Everything was rising. We were all rising. The housing market was rising. Bernie Madoff's money, people like me, my money was making 9, 10 percent," Penney says. "There was this incredible lift of the economic picture. And I think that the crash of the stock market and the crash of Bernie Madoff together are really emblematic that the system is the culprit. Madoff is emblematic of the system, but there's something very wrong with the system."
And just like the investments, Penney says, the soufflé fell, too.
Never put all your eggs in one basket.
Common leave, shorter work weeks among steps to avoid layoffs
MEDIA giant MediaCorp is instituting a range of cost-cutting measures, including mandatory days off without pay, to combat the slowdown and avert job losses.
But the company's TV and radio programmes, publications and online properties will not be affected, Channel NewsAsia (CNA) reported yesterday.
Chief executive Lucas Chow told staff in a circular yesterday that common leave days will be introduced, shorter work weeks implemented, new curbs placed on holiday entitlements and some benefits reduced.
The belt-tightening steps are being made to avoid layoffs, said the company which employs around 2,500 people.
They also come on top of earlier steps that cut some performance bonuses and capped travel and administration expenses.
Mr Chow underlined yesterday just how serious the situation was: 'Going into the new fiscal year, we have to go even further in order to keep the company afloat. These are unusual times calling for unusual measures.'
One of the most dramatic of these was that all staff, except those in round-the-clock services like news or radio, must take seven common leave days - with pay - over the next 12 months. This will allow some operations to be halted, although Mr Chow did not specify which ones.
The first leave break starts with the three days right after the Chinese New Year holiday.
The broadcaster, which runs CNA and the free newspaper Today, will also implement a four-day work week every other week. This will apply to all employees.
These so-called 'MediaCorp days off' will start in April and will mean a total of 26 unpaid days off in a 12-month period. It will amount to a 10 per cent cut in MediaCorp's annual wage bill, a report on the CNA website said. The report added the alternate short week and common leave will be scheduled around public holidays and school vacations.
This will mean breaks for some staff lasting up to a week. The days have already been selected and staff have been informed.
Employees were surprised by the announcement. One said: 'Are things really that bad that they have to resort to this?'
Another added: 'I'm thankful to still have a job, but this means that effectively I will get only 11 months' pay.'
From April onwards, employees will also be required to clear all their annual leave and will no longer be allowed to carry holiday entitlements forward to the next year.
A new benefit scheme started last year that gave staff $100 each has been suspended indefinitely.
Mr Chow, who will host an open forum at MediaCorp next Monday afternoon, said in his circular that the financial year ending March 31, while 'largely on track in the first half, will be hit by the weakening economy'.
The firm had revenue of $530 million for the year ended March 31, 2008 with profit of $52 million.
'MediaCorp relies heavily on advertising revenue, which is extremely sensitive to the overall economic climate,' stated Mr Chow. 'As a result, our financial performance in the third quarter has been affected and prospects look weak in the months ahead.
'Manpower salaries form a big part of our operating expense, and we have no choice but to manage this cost element.' He said he remains committed to saving jobs, and has consulted union leaders, management and the chairman.
Mr Ang Wah Lai, president of the Singapore Union of Broadcasting Employees, told CNA: 'Our employees understand it's a necessary step to save jobs.'
Labour chief Lim Swee Say said the consultation between the union and the company will 'strengthen trust and build confidence which is especially critical during this downturn'.
The sensitivity to advertising revenue reminds me of two companies: SPH and Google. I wonder how they are doing.
One thing worth noting in this recession is that big Singapore companies with links to the Singapore Government are taking the approach of pay cuts and shorter working hours as the first measure to cut cost, as opposed to outright job cuts.
This time, there isn't anywhere else to absorb retrenched workers!
I suppose we'll see more of this in this year.
BUSINESS graduate Noor Lilana, 23, is no longer looking for a management trainee position and a quick rise to the top rungs of the hospitality sector.
Instead, she is now prepared to accept a $1,000-a-month job working at the reception desk of a small hotel.
She had been looking for a job in the hotel industry since graduating from the National University of Singapore (NUS) in June last year.
In December, after being turned down repeatedly by hotels, she enrolled in a course for a certificate in hotel services. She did so in the hope that when she finishes the course next month, she will be able to get a job in the hotel industry.
'Right now, it is okay for me to start at the bottom and earn $1,500, $1,000 even. Some grads may disagree but in the long run, I am sure this move will pay off as I move up the ladder,' she says.
Really so desperate to work for $1,000/month? I suspect she is asking for $1,500, but just mentioned $1,000 as a possibility because she has been looking for six months.
It is extremely difficult to survive on $1,000/month.
The McGriddles meal is sold at S$5.70 without the egg and $5.90 with it. Just a 20 cents difference. An egg costs you S$1 if you ask for it.
I actually prefer the McGriddles burger without the egg (the taste is more apparent), but because of this 20 cents difference, I ordered the egg version.
The two other meals that are the most "bo-hua" are the McChicken and the Double Cheese burger meals. The burgers cost only $2 each.
Another burger that's not worth it is the Cheese burger, at $1.75. I had not met anyone who did not upgrade to the Double Cheese burger — once they were told it was just 25 cents more.
Another look at my transport expenses:
|Total cost ($)||761.76||648.27||5,338.90|
The fixed cost is made up entirely of road tax, insurance and season parking!
Note that I've included the inspection fees for road tax. You can't renew your road tax otherwise (for vehicles over 3 years old).
What is a good ratio to have? It's hard to say. A rule-of-thumb could be that a vehicle is only justifiable if the running cost is at least 25% of the total costs. Otherwise, it is cheaper to rent.
Looking at the numbers, it seems to me a person must drive some 10,000 km to 15,000 km a year to justify a vehicle on costs alone. My total for all three vehicles is around 10,000 km.
(Note that it's easier to justify paying for convenience.)
SINGAPOREANS are at the bottom of a ranking of retirement income from pensions in the Asia-Pacific region, says the Organisation for Economic Cooperation and Development (OECD).
And this is true at all income levels, according to the study, which covered 19 locations including Hong Kong, Taipei and Japan, The Business Times reported on Friday.
The Pensions at a Glance study, which also involved the World Bank, found that Singapore's average gross replacement rate - the value of the pension as a percentage of earnings when working - is just 13.1 per cent.
Taipei has the highest gross replacement rate of 70 per cent, the report said.
'This means that the gross pension income for average earners in Taipei is over two-thirds of their previous earnings level, whereas pensioners in Singapore receive less than one-seventh the amount of their earnings,' says the study.
Singapore's pension is provided by the Central Provident Fund (CPF).
'The relatively low replacement rate for Singapore is because the calculations only consider the earmarked retirement account,' says the study. 'If an individual were to put the general account towards retirement-income provision as well, then the replacement rate would be 82 per cent.'
It points out that it would be foolish to say that one Singaporean who withdrew from the CPF to buy a house is worse off than another who built up a retirement income and then had to use some of it to pay for housing.
'Nonetheless, there is a risk that older people find themselves asset-rich and income-poor in retirement and facing difficulty in unlocking the value of their housing assets to pay for essentials,' the study says.
Replacement rates - the most familiar indicator for pension analysts - are not the only factor governments are concerned with. They also need to measure the value of the overall pension promise.
'This is measured by the indicator of pension wealth which takes life expectancy into account,' the study says.
Again, Singapore has the lowest measurement - a retiree's pension here is worth just an average 2.2 times their earnings at retirement. The figure for China is 21.2 times - the highest in the region.
13.1% replacement rate for earmarked retirement a/c, 82% if the general a/c is considered too. Is the article is talking about the Special Account (SA) and Ordinary Account (OA)?
It also implies the general a/c is used for housing, because it talked about asset-rich and income-poor.
I agree with the article that using the CPF to pay for housing isn't necessarily bad. However, people overdo it — 30 years loan — that's bad. A 15-year loan is more prudent, but just take a look what kind of flats you can buy: almost none.
How will you be ahead in a 30-year loan? Only two ways: inflation and an ever-appreciating housing market.
IN A signal that a wave of retrenchments may be on the way, the number of unionised workers who have been asked to go on a shorter work week or to clear their leave has drastically spiked in the past month.
On Nov 25, when the labour movement began tracking the situation, there were 6,876 such workers. This has since more than doubled in one month - to 15,000.
The past seven days alone saw a 25 per cent jump in the number - up from 12,000 at the end of the previous week, said the National Trades Unions Congress (NTUC).
This means that about 5 per cent of its 294,000 unionised workers have been affected so far.
The significant uptick in numbers is 'a precursor to retrenchments', said Mrs Josephine Teo, NTUC's assistant secretary-general, at a media briefing on Thursday.
'It's quite realistic to expect that after Chinese New Year, in the first quarter leading to the second, we will see an increase in retrenchments,' she warned.
A total of 3,773 unionised workers were retrenched last year, compared to 2,943 in 2007.
She attributes the recent spike to what she calls 'the Chinese New Year effect' - manufacturing companies deciding to close its factories for a longer period of time during this holiday period.
Some have also given feedback that they have 'no orders to fulfil this year.'
At the same time, the numbers could be an effect of recent guidelines urging companies to manage excess manpower by such ways as shorter work weeks and flexible wages, rather than retrenching.
Mrs Teo revealed that the workers hit so far are typically in export-dependent manufacturing sectors such as electronics or chemical processing. Relatively fewer numbers are seen in the service industry.
For these workers, shorter work weeks and temporary lay-offs - where employers can ask workers to take up to half of their annual leave and pay them half their wages - have translated into pay cuts ranging from 10 to to 50 per cent.
With more workers facing such a predicament, one danger is that family ties will come under strain.
NTUC, together with the National Family Council (NFC), is planning a series of activities to help combat this, Mrs Teo said.
It includes a series of talks beginning this Saturday to help workers and their spouses. For instance, they will be advised on matters ranging from budgeting to handling spousal conflict.
Initially, the series will be held at NTUC Centre in the business district, moving later to the heartlands. There are also plans to organise joint programmes with family service centres, and to use new media such as a Facebook account and online forums to offer advice for families hit by the downturn.
Looks like the Government is telling the blue-collar workers to brace for retrenchments.
Personally, I prefer to be notified before the CNY, than after. I think it's "cruel" to be let go after a major celebration. If you're told beforehand, at least you can scale down your spending.
China's office workers are tightening their belts, cutting spending on everything from clothes to fast food, despite government efforts to boost consumption to stave off the worst effects of a global recession.
Websites popular among young Chinese professionals are extolling the virtues of frugality as the global financial crisis bites China's economy.
Wang Hao, a 24-year-old Beijing office worker, launched his campaign in June to curb weekly living expenses to 100 yuan. So far, he says, he has 55,000 participants.
"The financial crisis has apparently given a lesson on spending to young people in China, including me," said Wang, who posted his campaign on a popular forum and on his blog blog.soufun.com/whblog. It has had 178,000 hits.
China has enjoyed phenomenal economic growth for years, giving a huge boost to its domestic consumption. Young consumers, mostly in their late twenties and early thirties, would spend as much as they earned, if not more, on designer clothes, electronics, entertainment and a wide variety of consumer goods.
Now, at least, some are becoming thrifty.
Besides Wang's cost-cutting crusade, another website is running a similar "100 yuan for a week" campaign, and still other websites offer budget tips, including recipes for meals that cost under 10 yuan.
One site offers Ten Mottos for Financial Winter, with advice that includes avoiding quitting your job, starting a business, buying a car and having a baby.
These cost-cutting campaigns are in sharp contrast to a government drive to encourage spending amid rising unemployment and slowing retail sales.
The government has allocated 4 trillion yuan in spending to help achieve the goal.While still mostly a grass-roots campaign, cost-cutting drives are indicative of slumping consumer confidence in China and could take a toll on the economy if they become even more widespread, said Lin Songli, a senior analyst with Guosen Securities in Beijing.
"Though not quantifiable, confidence is crucial for the economy," he said.
About 46 percent of Chinese said their country's economic situation was good in November 2008, compared with 90 percent in 2007, according to an Ipsos survey published in December.
Jun Ma, chief China economist at Deutsche Bank in Hong Kong, said he expected retail sales to grow just 13 percent this year, partly due to fast-falling prices. Retail sales are projected to have grown about 21 percent in 2008.
Like their counterparts in western countries, young Chinese white-collar workers in big cities such as Beijing, Shanghai and Guangzhou tend to overspend.
A Shanghai government survey in November 2008 said office workers in the Chinese financial hub spend an average of 2,500 yuan a month. According to government statistics in September, average monthly income in Chinese cities is 2,192 yuan.
Expensive products such as electronic gadgets and luxury goods have sold like hotcakes in China, especially among young professionals who were all too willing to shell out their entire salary to buy such items as an Apple iPhone.
"I've changed my cell phones every six months since graduating from college," Wang said.
"But when the global financial crisis comes, I'm feeling pressure from my company which has foreign stakes," he said, explaining that he was worried about losing his job.
Wang is still grappling with the challenge of getting by on 100 yuan a week for all meals, transportation and entertainment.
In Beijing, 100 yuan buys nine McDonald's Big Mac burgers, roughly half a tank of gasoline, a monthly home Internet connection, or two movie tickets.
To cut costs, Wang now eats steamed buns for lunch instead of pizza, and he cycles for 20 minutes to work every day, instead of taking buses.
$100 a week means $14.30 per day. 100 yuan is around S$20, but in terms of spending power, it's more like 1:1 — 1 yuan in a Chinese city spends like S$1 in Singapore.
Or is it? A Big Mac burger is 11.11 yuan. Assuming the article is correct and it's for a single burger, it is equivalent to S$4.25. If so, then 100 yuan is equal to $38.25 ($5.46 per day).
It can be almost effortless to spend just S$8.34 per day (2 meals and bi-directional transport). If you can walk or cycle to your workplace, then it drops even further to $5. This is rare, though.
Singapore keeps its residential and commerical zones apart, so it's very rare to be able to walk to your workplace. Also, the road system is not suited for cycling — unfortunately.
It looks like this is only doable if you have zero committments. From the looks of it, fixed monthly expenses don't seem to be counted.
My transport costs for 2008, by petrol and total expenses:
Note that I only include 10% of COE for the CB400F. (The COE is amortized over 10 years.)
Let's take a look at the cost-per-km costs:
Assuming the YBR gives 38 km/l, the CB400F 22.5 km/l (its true FC) and the MX-5 9.6 km/l.
My daily trip to work and back is around 30 km. It costs me $4.62 on the YBR, $9.39 on the CB400F and a whopping $47.32 on the MX-5!
This data clearly shows that even the extremely cheap-to-run YBR is more expensive than public transport. (I can take a single bus to reach office. The to-and-fro trips cost $3.34.)
The MX-5 has very high cost-per-km because I seldom drive it — it has very high fixed costs (road tax, insurance and season parking). I intend to drive it more often this year. The cost-per-km will go down, but the total cost will go up.
I won't be able to reach the holy grail of spending just $1,200/month. In fact, I don't think I will ever achieve it. A quick calculation shows that the bare minimum I need to spend is $1,420/month (basic expenses + cash expenses + YBR expenses * 150%). It would be a torture, though.
Realistically, the minimum would be $1,800/month. If I sell my car, my expenses drop to $1,826.75/month right away. (It will be very slightly higher as the other vehicles take up the slack.)
What if I want to keep my car? Well, the minimum is then $2,000/month. It would be extremely difficult to achieve it as I'm running a pretty lean budget already and there's nothing much to cut. Any more cuts means a real sacrifice.
I estimate that my monthly expenses for 2009 will be much higher at $2,700/month due to the increase in rental and the maintenance required for my vehicles.
|Avg per month||63.48||138.40||444.91|
Note that the total expenses here ($7,761.43) does not tally with the vehicle expenses in the 2008 Expenses Report ($7,741.36). The expenses here do not take into account some additional petrol discounts. I will make sure the expenses tally from this year onwards.
There are no unexpected expenses this year. The expenses for CB400F are exceptionally high due to the renewal of COE.
I expect the vehicle expenses to be even higher this year. Known expenses:
I spent an average of $2,271.66/month. This is lower than the estimated $2,500/month I spent in 2007. I tried very hard to bring down my expenses, but I could only save an additional $200+/month! :-(
According to Christopher Ng's Growing Your Tree of Prosperity, a frugal person should be able to live on $1,200/month! (Based on 2003 data. I estimate that the figure should be $1,400 now.)
The bulk of basic expenses are rental and parents' allowance. They already account for over 70% of the basic expenses! The bulk of the vehicle expenses is contributed by my car. It accounts for nearly 70% of the expenses!
The top contributors for discretionary expenses (under CC and Others):
These items account for 78.6% of the discretionary expenses.
I pre-ordered some expensive figures in 2007, before I decided to stop buying figures, that's why the expenses still show up.
I spent quite a lot on others, as evidenced by the amount I spent on ang pows, treats and gifts. Collectively, they account for 43.7% of the top contributors (34.3% of discretionary expenses).
I have cut down substantially on board games, books, comics and DVDs.
Despite trying to be frugal, I failed to be so due to the high fixed expenses. I failed to achieve my goal of spending $2,000/month (as the first step towards $1,200/month). However, with one full year's worth of data now, I can see how much I can realistically achieve.
I believe my expenses will be even higher this year. Perhaps I should set my target at $2,200/month.
Basic expenses are slightly higher than normal because the phone bills are deducted twice.
Credit card expenses are extremely high due to several meal treats. Some are only payable next month, but I included them as this year's expenses. (They will not be counted next month.)
Vehicle expenses are also high due to the MX-5's road tax and the YBR125's insurance/road tax.
Other expenses are extremely high. Half of it goes to an ang pow for a colleague's wedding and some gifts. Hey, it's the Christmas season. That means I still spent over $300 on myself. The bulk of it goes to comics ($85.39), computer parts ($87) and toys ($68.80).