Kudos to the latest issue of the The Economist, features an article describing how American capitalism is morphing. That certainly caught my eye - as any reader of this blog knows, I speak fervently against what I consider the excesses of capitalism... for instance 2001 crash of Asia Pulp and Paper in Singapore's largest debt fault, see here.
An alternative form of financing structure called the Master Limited Partnership is taking hold in America, one where the majority of income passes through to partners/ unit-holders annually, with the main benefit of lowered corporate taxes. (Any local reader familiar with S-REITs will note the similarities in structure). One of the key MLPs today is Kinder Morgan, an energy asset company founded by Richard Kinder of Enron fame/ infamy. (Aside, Enron has many illustrious alum. One that comes to mind is Ogan Kose, Accenture's senior global executive on commodity trading and risk management. They were truly the Smartest Guys in the Room).
Many investors - common and institutional - are however unable to invest in these MLPs, due to regulatory restrictions. These enterprises are also subject to less stringent regulations than the conventional incorporation company. The article rightly points to the potential for gaming of the system by holders of superior asymmetric information (owners, accountants, lawyers etc.), at the expense of people on the outside. More worrying is the observation of that these structures "survive on the whims of Washington" due to the layers of political and legal labyrinth that they are wrapped in. Here again, we see the potential for the creation, or dare I say, perpetuation, of a business-politics nexus.
Like The Economist, I'm doing what I can to shine light on the darker, opaque regions of capitalism where potential for malfeasance is rife.
Sunday, October 27, 2013
Thursday, October 10, 2013
How the stock market parallels human behaviour
The STI is going no where. No surprise there. To me, it's what like we commonly know as "Hot N Cold".
Hot and Cold manifests onto person B by person A because person B:
1) Wishes to keep his/ her options open
2) Doesn't wish to commit to any substantial investment (whether physical, emotional, or whatever form).
So Person B vacillates, varying between levels of enthusiasm and aloofness. Essentially, the relationship goes no where.
IF we extend this analogy to the stock market, investors wish to keep their options open by dipping their toes in, yet their fear commitment (because among reasons, they don't know what they Fed is going to do). Hence you get the classic see-saw.
It could change of course - with our first possible Fed Chairwoman Janet Yellen. That should give investors pause to think.
Hot and Cold manifests onto person B by person A because person B:
1) Wishes to keep his/ her options open
2) Doesn't wish to commit to any substantial investment (whether physical, emotional, or whatever form).
So Person B vacillates, varying between levels of enthusiasm and aloofness. Essentially, the relationship goes no where.
IF we extend this analogy to the stock market, investors wish to keep their options open by dipping their toes in, yet their fear commitment (because among reasons, they don't know what they Fed is going to do). Hence you get the classic see-saw.
It could change of course - with our first possible Fed Chairwoman Janet Yellen. That should give investors pause to think.
Sunday, October 6, 2013
Ben Bernanke shows us there really is a free lunch - or is there?
It's been five years since Lehman Brothers went under. Ben Bernanke, with his bold experiment of low interest rates and quantitative easing, has done us all a huge favour. First by rescuing the global financial system from the edge of a cliff, and next by protecting jobs even amidst a recession - a feat that has had most economists shaking their head in amazement. Examples such as this and this seem to defy economic gravity.
To go one step further, I would credit Bernanke from sparing us the ills of social revolution in America, or from (god forbid!) fascism or communism, which have a tendency to rear their heads when the economic going get's tough.
In short, he seems to have achieved nothing less than a miracle. At what cost, however? US income inequality has only widened since 2008, as the rich and get richer and the poor's wages stay stagnant.
(This is the point where Ben comes in with a nagging finger and gently reminds that 'But they still keep their jobs you know!'. Hallelujah!)
I would argue though the bigger danger is morality. Those who created the toxic products that imploded in a big mess and almost brought down the entire financial system with it have, by and large, gotten away scot-free and pocketed huge bonuses. This PBS documentary calls them The Untouchables. The amazing concentration of power that Wall Street and the finance industry accrues has not diminished one iota since the days of the crisis. We could be setting ourselves for another repeat since people have gotten the message that it is okay to sell toxic products and walk away - because Bernanke will print more money and the world will be fine.
Thank you Ben. Really, on behalf of the world, a very big thank you.
To go one step further, I would credit Bernanke from sparing us the ills of social revolution in America, or from (god forbid!) fascism or communism, which have a tendency to rear their heads when the economic going get's tough.
In short, he seems to have achieved nothing less than a miracle. At what cost, however? US income inequality has only widened since 2008, as the rich and get richer and the poor's wages stay stagnant.
(This is the point where Ben comes in with a nagging finger and gently reminds that 'But they still keep their jobs you know!'. Hallelujah!)
I would argue though the bigger danger is morality. Those who created the toxic products that imploded in a big mess and almost brought down the entire financial system with it have, by and large, gotten away scot-free and pocketed huge bonuses. This PBS documentary calls them The Untouchables. The amazing concentration of power that Wall Street and the finance industry accrues has not diminished one iota since the days of the crisis. We could be setting ourselves for another repeat since people have gotten the message that it is okay to sell toxic products and walk away - because Bernanke will print more money and the world will be fine.
Thank you Ben. Really, on behalf of the world, a very big thank you.
Saturday, October 5, 2013
Blog 4.0
I've decided to revive this blog. And make it public (with some old posts archived privately, of course). There are some things I feel I need to say and share, more than ever.
Wednesday, November 30, 2011
Farewell?
This blog, like many of my past ones, has been abandoned by the wayside.
But it's fun to go back and read stuff I wrote a couple of years back.
Ah, the folly of youth! =)
Sunday, August 14, 2011
Endemic.
I always tot the word "endemic" had negative connotations.
It was kind of surprising to read Carl Trocki's sentence which says
"[T]he triad was endemic among the southern Chinese", where
the word was used in a very neutral fashion.
Perhaps he meant it to be subtly ironic but I guess it was lost on me.
Oxford English Dictionary confirms my suspicions
that the word is used to speak of negative things, like diseases.
An example would be Adam Smith's usage in The Wealth of Nations, p. 77,
where he writes "Famines are periodical or endemic in Hindostan".
It was kind of surprising to read Carl Trocki's sentence which says
"[T]he triad was endemic among the southern Chinese", where
the word was used in a very neutral fashion.
Perhaps he meant it to be subtly ironic but I guess it was lost on me.
Oxford English Dictionary confirms my suspicions
that the word is used to speak of negative things, like diseases.
An example would be Adam Smith's usage in The Wealth of Nations, p. 77,
where he writes "Famines are periodical or endemic in Hindostan".
Tuesday, May 10, 2011
颜清湟教授给予我的启迪
在阅读了有关他的报章之后，颜教授提醒了我：我等祖先乘风破浪，远赴南洋，在此辛劳数载，为当地社会付出重大贡献。但要非历史学家把这一系列的贡献纪录下来，那就口说无凭，难以服人；随之时光流逝，这一切也会被后人逐渐遗忘。尤其读到他说“在新马，研究历史的人不算多，尤其是年轻人更少”- 真不仅让我感到一阵心酸。不只是海外华人的历史，就连东南亚历史，也不是年轻人向往认识，研究的科目之一。在他们心中，这门科目不但陈旧老土，更无经济利益。哀哉！有鉴于此，我决定设下目标，在大四那年进行一项有关海外华人历史的研究论文。 也好借此机会让我的华文读写有片用武之地。（也不白费了我修读华文十年心血吧，哈哈）。But too bad I'll be writing in English. 星星之火，足以燎原。希望我再渺小的贡献，亦能为保存这段历史而尽一份力。
(P.S. Lastly, a few more words in English. I havent remoted composed anything in Mandarin for at least the past 5 years. My Mandarin used to be better than my English; but now, the inverse is true: I have to lament that my Mandarin writing is but a pale shadow of its former self. So please dun judge wad I wrote above k!!! Haha. FYI, Prof Yen (just like Wang Gungwu) and many other scholars are effectively bilingual. Not only is their Chinese writing (obviously) better than mine, even their English works leave me much to learn from.Truly, they put me to shame....)
(P.S. Lastly, a few more words in English. I havent remoted composed anything in Mandarin for at least the past 5 years. My Mandarin used to be better than my English; but now, the inverse is true: I have to lament that my Mandarin writing is but a pale shadow of its former self. So please dun judge wad I wrote above k!!! Haha. FYI, Prof Yen (just like Wang Gungwu) and many other scholars are effectively bilingual. Not only is their Chinese writing (obviously) better than mine, even their English works leave me much to learn from.Truly, they put me to shame....)
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