Monday, November 24, 2008

Long Term Becomes WRONG TERM! WHERE ARE YOUR EYES?

Long Term becomes WRONG TERM! I must first qualify this: this is a quote I get out of Sammyboy forum recently.

When Singapore government Sovereign Wealth funds like Temasek Holdings and GIC started to throw money in Citibank, Merryl Lynch and UBS last year, there were so much coverage about what a "good bargain" they have gotten. I was very skeptical about such deals for the simple reason that nobody, professional investors, will walk into such deals at the first sight of trouble. This is simply because one would not be able to assess the seriousness of the whole issue at first instance when there were almost simultaneously three BIG international banks putting up the red cards together.

Any investors or fund managers worth his salt would have become very wary and cautious when he is put into such situation. At most, he would put a small bet into one, not ALL THREE together. But this is NOT the case for Singapore Government's investment arms. They WALK RIGHT INTO the center of financial tornado WITH THEIR EYES WIDE OPEN, or do they have eyes in the first place? Even if the chances of these banks making a come back are more than 60%, I guess any prudent investors would have waited slightly longer, just for the stock price to fall further.

The irony is that after the ill-fated investments were made, our PAP ministers backed these ill-fated investments up WITH THEIR EYES WIDE OPEN again. They claimed these are GOOD BARGAINS. And when the stock prices start free falling, they still claim that these are for LONG TERM INVESTMENT.

Mind you, our ministers are EXTRAORDINARY politicians (or technocrats, if you may want to call them) that demands the WORLD'S HIGHEST PAY as political office holders. They self-proclaimed to be WORLD CLASS TALENTS who are running a WORLD CLASS country. And thus, they demand WORLD CLASS salaries for their "services to the country". But it seems that they are just like any ordinary fund managers when they made such ill-fated judgment! We would expect TOP MONEY with TOP PERFORMANCE, not MEDIOCRE PERFORMANCE, right?

Well, never mind if you justify that I am talking on hindsight, which I know I am not. I was one of the few that cast doubts on such investment moves at that time. Simply because I believe we could wait for a little while longer to get the REAL BARGAIN if we really believe that these would be good buy. Waiting a little bit longer will also allow us to assess the extent of the problems these banks were facing. Either way, we win. Besides, we are just a little tiny red dot with limited reserves which are meant for our very own survival if anything hit us back home. We should not think too greatly of ourselves as the "world saver" of the day. Prudence is lost when arrogance emerges. This is the golden truth.

Back home here, the whole nation has just found out that the lack of prudence is not just limited to the Government's SWF. The ruling party's municipal Town Councils, which have accumulated quite a huge amount of funds over the years, have made great blunders in making EYE OPENING investments in the HIGH RISK structured financial products which the pitiful returns that do not match the risks embedded.

Even the government statutory boards, which I believe, includes the defacto Central Bank MAS, have made such EYE OPENING BLUNDERS, even under the WATCHFUL EYES of the WORLD CLASS TALENTED Ministers. It all happens when MAS decided to go on imprudent deregulation on the financial system back in 2000. These toxic financial products should not be allowed to be sold in Singapore to retail investors in the very first place. Whose fault? Obviously its the MAS' fault to start with. MAS should have assessed such products WITH THEIR EYES OPEN.

Well, some claims that people invest, sometimes you win, sometimes you lose. No big deal. However, THIS IS THE PEOPLE'S MONEY, not theirs to start with. If any ministers or PAP MPs made losses in their OWN investments in these structured products, I swear that I won't laugh or MOCK at them by saying they "WALK IN WITH EYES OPEN". Nope. Its perfectly alright to make a mistake on their personal investments. BUT IT IS NOT OK for them to show such TOTAL INCOMPETENCY when it comes to investing PUBLIC MONEY!

The irony is that instead of doing the SIMPLE DECENT THING of apologizing for the various mistakes made in such investments, these WORLD CLASS POLITICIANS actually have the cheeks to DEFEND their position by saying "it's a small sum" (nearly a peanut or what?), its small percentage, their investment is "top secret" and even go to such an extend of being ARROGANT in declaring that Singaporeans "SHOULD BE GRATEFUL TO THEM" for their past success in investments!

As I have said, Prudence is lost when Arrogance emerges. If you are a company director and you pay TOP MONEY to employ supposedly TOP TALENTS to help you run the company. The company makes money in the first few years, do you need to be "grateful" to these TOP TALENTS that demanded TOP MONEY? Well, maybe so, but less so; because it is simply JUST A DEAL and TOP MONEY warrants TOP PERFORMANCE, this is natural. But when the company starts to lose BIG MONEY, would you just sit there and say take the crap of these TOP TALENTS refusing to admit their mistakes but keep reminding you that you should be grateful to them for their past good performance?

From the assertion of LONG TERM has turned into WRONG TERM. Hopefully it will not turn into LOST TERM. Our PAP ELITES are totally lost; LOST OF FORESIGHT, HELICOPTER SIGHT and what is more interesting is that we are witnessing them losing HUMILITY but GAINED SUBSTANTIALLY on ARROGANCE.

I guess the worst is yet to come. Temasek Holdings with GIC combined, have lost multi-billion dollars for the last one and a half year. This is substantial lost in terms of losses per capital. And yet, we are still witnessing Temasek Holdings and GIC pumping money relentless into the world's financial institutions, which in my view, putting too much risks in throwing good money after bad ones. When will they learn to be prudent? This is just the beginning of the whole crisis. They lost huge amount in the "prelude" back in 2007 and now, they are pumping money in just like that when apparently this is only the beginning of a long drawn crisis!

Heaven please helps us!

Goh Meng Seng

4 comments:

Xtrocious said...

I don't know about the public sector but in the private sector, people are already rewarded for their good performances in the past with generous bonuses and world-class salaries...

Any bad performance in the future is a separate issue and people in the corporate world accept that...

I really don't see how they can demand private sector pay and not take the private sector responsibilities and risks that come with it...

tewniaseng said...

It is time to vote pap out of the scene.Your money will be safe and guaranteed under opposition TC.Since Pap MPs perform badly in TC investments,the people won't get anything useful or rather get a decrease in S&C,but if you are under oppositions TC,I bet you won't lose anything,but you will not get any increament in S&C.No harm done in voting in more oppositions MPs to serve you better.Since many people are fed up of Pap MPs, let us vote in more oppositions to your advantage.

Anonymous said...

well written ; speak the heart of s'porean

G Chen said...

I totally agreed with your sentiments. It is sad that so far most Singaporeans are still taking such craps sitting down. When the economy is good they take the credit, when economy is bad, it is everyone else's fault and Singaporeans will be told to "bite the bullet"..idiots.