Stocks - Time for Caution

In the week after the Sendai earthquake in Japan, there was a report in ST on 19 March wherein some market analysts were saying that the correction in the stock market presented a good 'buy on weakness' type of opportunity.  While some of the arguments were interesting, they appear to me to have seriously underestimated the risks from the unfolding events in the Middle East/North Africa as well as the ongoing sovereign debt crisis in Europe.

Furthermore, looking at the Singapore market action itself, there appears to be a mood of caution amongst the speculators, while the markets in the US shows hints of distribution.  The US markets, still leaders in terms of being able to influence global investor sentiments, show more signs of nearing a top than rather than good entry points for long-term holdings.  The only thing, some would argue, that is keeping the market from dropping is the billions of dollars funneled into the market by the US Fed via its QE2 programme.

As such, I would hesitate to say that now is the time for long-term investors to accumulate stocks.  This is a trading market.

Inflation - We Must Protect Ourselves

 Based on the feedback that I see on both the REACH and CPF Facebook pages, many Singaporeans are still whining about inadequate government action with respect to dealing with the inflation problem.  For those who are still labouring under the delusion that the government will be able to help them with this bread-and-butter issue, I offer up the latest piece of evidence that such hopes are woefully misplaced:
 
Upgrading key to tackling inflation

In this CNA news report, MND Minister Mah Bow Tan was quoted as saying:

Oil prices are shooting up and food prices are going up, so how do we lower the price of food when we have to pay more to import food? The only way is to upgrade our skills and increase our pay.

A major reason for rising oil and food prices is simply the non-stop money printing engaged by all the major central banks around the world, including those of China and India besides those of the Western powers and Japan.  Skills upgrading doesn't solve the problem at all.  This is very simple monetary theory.

When I see such a lack of understanding of basic economics from a Cabinet minister, I tell myself that I need to deal with the problem on my own, and not expect the government to be able to help me.

And no, I'm not going to get started on how current policies make the 'upgrade your skills so that you can increase your pay' logic flawed and misleading.  That's for another day.

Tharman's IMF Appointment

The local mainstream media reported with some fanfare that finance minister Tharman Shanmugaratnam had been appointed to a post in the IMF, in an apparent attempt to whip up national pride.  Without prejudice to the very high regard that I have for the Finance Minister, it would appear to me, to put it most charitably, to have been silliness on the part of the mainstream media on a slow news day.

Objectively, looking at the fact that the previous appointment holder of that IMF office was an Egyptian, one can easily infer that the particular post in question is one that is of little practical importance.  And this is not a knock on Egypt as a country.  The fact is that the IMF is one of the key pillars of the Bretton Wood system set up after World War II to underpin American hegemonic power and the centrality of the US dollar.  As such, it is not likely that the Americans would cede any real power in an institution that is central to their system, especially at a time when they perceive that other rising powers such as China and Russia are trying to undermine it.

My hope is that the IMF appointment will not waste too much of the Finance Minister's precious time, given that I see many important challenges facing Singapore which requires all the brains we can get to anticipate and solve.

IMF: Rising Food Prices May Be Here to Stay

The IMF has warned again that rising food prices may not be a temporary phenomenon.  In an article in the Finance and Development magazine, it has noted that food prices are now close to the highs of 2008.  A summary of the article can be found here.

Unfortunately, the IMF has only attributed the problem to poor harvests, the use of biofuels and higher energy prices. It has ignored the fact that aggressive money printing by the advanced economies have also contributed a large part to the problem.

For Some Delusional Singaporeans

There are some Singaporeans, including those that belong to certain opposition parties, who hold the idea that Singapore can cut back on military spending because of our 'excellent' relationships with our neighbouring countries.  Here's something for such delusional Singaporeans to consider:

Consider that Singapore is disliked by it's immediate neighbors and that it depends on tenuous good will from those people who don't like them for their daily water (over a million tons/day) and nearly all their gas for electricity (supplied via three easily sabotaged pipelines).

This was found from an online forum and was posted by a foreigner from a neighbouring country.

Too many of us have little sense of how vulnerable our country is.  It's time to wake up and figure out whether, as individuals, we want to stay behind and deal with it or to leave.  In either case, we need to stop whining.

Japan Earthquake, Nuclear Energy and Reality

First off, my thoughts and prayers go out to all the Japanese people affected by Friday's massive earthquake.

Now, from the Twitter-sphere, I see that some Japanese people questioning the need for nuclear power.  We also see the Italians protesting against nuclear power in their own country.

Here's the reality: The current level of comfort that both the Japanese and Italians enjoy would not be possible without nuclear power.  Both countries have almost no indigenous sources of fossil fuel needed to generate the amount of energy consumed.  Renewable energy sources cannot scale up enough to meet those needs either.  Consider the fact that a generator powered by a wind-farm to provide base-load capacity would require either a coal or natgas-buring generator to work as a back-up due to the intermittent nature of winds.  Thus, without nuclear power, both countries would be dependent on the importation of fossil fuels to power their grid.  That, of course, is unacceptable to the Greenies with their claims of anthropogenic climate change due to CO2 emissions from the burning of fossil fuels.

I guess a lot of people who complain against nuclear power do not have enough knowledge of electrical engineering to realise that their advocacy of alternative energy means a return to 17th century living standards.  There's absolutely nothing wrong in desiring a simpler, lower-energy existence.  But it is the height of lunacy to think that one can maintain modern levels of energy consumption without nuclear power or fossil fuels.  But I guess they won't realise this until Facebook or Twitter stops working due to the lack of power to run those massive server farms.

Thoughts on Singapore's 'Chinese-ness'

It is a well-known fact that Malaysian politicians have used the fact that Singapore has ethnic Chinese majority population as a bogeyman to stoke fear and resentment against us.  Unfortunately, in recent days, I have been reminded of the reality that there are some non-Chinese Singaporeans who think like those Malaysian politicians, and thus the fragility of our racial harmony.

What started this train of thoughts for me was an article by an apparently well-known Malay Singaporean literary figure (I am obviously out-of-touch in this area) that was posted on an anti-government website, and some remarks about Singapore being part of China by some non-Chinese chaps.

The article had accused MM Lee Kuan Yew of promoting a sense of Chinese distinctiveness amongst the Chinese population in Singapore in his post-independence policies, which I thought was a very clear misreading of the reality.  Taking a somewhat sanguine view of the author's position would mean that one could attribute such xenophobia to a lack of understanding of what Chinese culture is and what 'Chinese-ness' mean.  As a Chinese Singaporean, I had thought that the exact opposite was true: That the PAP's policies have been assiduous in the suppression of Chinese distinctiveness.

Let's look at some simple facts:

• The teaching of Chinese language in the school system has been progressively dumbed-down, such that even as a person who had attended an SAP school (such as myself), may find it difficult to read a Chinese business newspaper, let alone more advanced materials. (The ability to read Lianhe Zaobao does not count - it too has been simplified considerably.)
• The teaching of Chinese history and literature has been restricted to only a very small minority of Chinese Singaporean students whose language facility allows them to understand the materials.  Most Chinese Singaporeans are clueless in these areas.  As proof of this, one can do a simple experiment: Walk down any busy Singapore street, randomly pick out 20 Chinese Singaporeans below the age of 40 and ask them to name all the '四书', the 4 great classics of Chinese philosophical thought.  I am willing to bet that 95% of the people can't do it.  Forget about them having actually read the books.

My basic contention is this: If Chinese Singaporeans have such a poor grasp of the Chinese language and almost no knowledge of Chinese culture and history beyond what had been orally handed down to them by their elders, what Chinese distinctiveness are we talking about?

On a less benign interpretation of things, it would appear to me that, since reading Dr. Hussin Mutalib's letters to the ST Forum more than 20 years ago, there have been rather persistent demands by some non-Chinese Singaporeans for Chinese Singaporeans to keep conceding in the areas of language and culture, out of an irrational fear of cultural dominance by the latter.  The irony in all these is that non-Chinese Singaporeans are themselves also concerned about the erosion of language and culture against the Western cultural juggernaut riding in on the back of the English language.  They seem to have forgotten 'the Golden Rule'.

While no amount of argument would disabuse these non-Chinese Singaporeans of their mistaken notions that we Chinese Singaporean seek to be culturally dominant or that we desire to be 'part of China', here's a little suggestion to those who are more willing to let the facts speak for themselves: Go live in China for 2 weeks, and observe how different the people of these places are from Chinese Singaporeans, despite the apparent similarity in language. And don't bother to queue up at a fast-food restaurant.  It's an alien concept there.

Worrying About Sustainability

Member of Parliament Dr. Teo Ho Pin commented in Parliament that the Budget had not adequately address the country's sustainability needs over the next few decades.  He was referring to the issue of Singapore's carbon emissions.  While what he said is true, I would suggest that he had nonetheless missed the whole point with regard to the issue of sustainability.

Being a peak oil advocate, I believe the key issue is how we can sustain our current high standard of living given the expected shortfall in energy production that is expected to hit the world within the next 10 years.  If we cannot find a solution to overcome the constraints of the expected decline in fossil fuel production, the persistent shortfall of supply relative to demand will automatically mean lower carbon emissions, and thus make the issue of carbon footprint totally irrelevant.

In a world of energy shortfalls, people will be worrying about their livelihoods, not carbon footprint.  That's the reality of the situation.  Singapore as a transport hub that also has a large tourism sector is very vulnerable to shortfalls in liquid fossil fuel supplies, as these cannot be replaced with other types of fuels for transportation in a meaningful way within the next 10 years or more.  That will be the real issue of sustainability for Singapore in the coming decade.

More Whining - Forced to give personal particulars at the door

Some Singaporeans seem to complain about the most trivial of things, such as this letter to Today's Voices page about how the writer was allegedly forced to provide his personal particulars before being granted entry to a warehouse sale.

The writer's claim that he was forced to provide his particulars is patently incorrect.  Common sense should have informed him that:

1. The warehouse is a private property.
2. The owner/leasee of the property has a right to impose conditions for granting entry into the premises.
3. The writer has no entitlement to enter the premises and to the sale of the marked-down goods.
4. Therefore, if he is not willing to provide his particulars, he can shop somewhere else.
5. There is no 'free lunch' in a commercial dealing.

Common sense is not easy to find these days.