A Layman's Account of Global Financial Crisis (GFC)

My qualification is next to nothing. I claim the insight of the child who cried "The Emperor's not wearing any clothes!"
On this note, here's what happened. Before the GFC around 2008, the economists cried wolf: everything - consumer goods, properties, stock prices, essential services etc - had been overpriced. Why did the suppliers charge so much? Greed. They want to have more money, more material wealth because everyone else is having it good. Why should they be any different?
Naturally, most people want to do it the legal way. Thus, the shortcut was to get banks to lend money on expected - and inflated - value of the assets which are pledged to the banks as collateral.
Note: if the banks had simply assessed that the collateral were not worth the loans, the "emperor's new clothes", ie the inflated values, would have been exposed.
Instead, the banks proceeded to support the valuation. Like the emperor's courtiers and fawners, they proceeded to further exaggerate, or inflate these valuations. A particularly wicked part of this was to further package questionable securities such as sub-prime mortgages along with good solid securities such as gold certificates, government bonds etc and demanding that the rating agencies issue an assessment of the "risk rating" (such as AAA, AA+, etc.)of the mixed package of "toxic" assets sandwiched between the good assets. At this point, the ratings agencies should also be responsible for not recognizing that the "toxic" assets had "spoiled the barrel" (my mixing of metaphors is a much lesser offence than that of the financial geniuses in poisoning the pool of wealth).
The rest, as they say, is history. Someone cried out "Ponzi scheme" and the house of cards tumbled.
But, there is yet another chapter. As we resuscitate the financial markets in the hope of refloating the consumer markets, the geniuses who created the toxic assets are chasing their losses. Evidence: the conduct of Goldman Sachs, Citibank etc after the bailouts took on more risks and made back their losses. Smart calls or continued creation of "new clothers"? Watch and see.

Surprise - Writers Can (and do) Bitch

"I walked over each farmer's premises, tasted his wild apples, discoursed on husbandry with him, took his farm at his price, at any price, mortgaging it to him in my mind; even put a higher price on it — took everything but a deed of it — took his word for his deed, for I dearly love to talk — cultivated it, and him too to some extent, I trust, and withdrew when I had enjoyed it long enough, leaving him to carry it on." Thoreau, whose prose was immortalised in Chapter 2 of "Walden", and parrotted by 2 unfit vassals(present company included) -4 posts ago - also wrote the preceding sentence. The footnote goes on to inform us that:
'E.B. White wrote of this sentence: "A copy-desk man would get a double hernia trying to clean up that sentence for the management, but the sentence needs no fixing, for it perfectly captures the meaning of the writer and the quality of the ramble." '
The point? Great writing starts from trash level. In polite company, words which capture "the quality of the ramble".

Desiderata Indeed

Extreme prose happened way before extreme sport. When someone sent Evelyn Waugh a copy of "Desiderata", he is said to have written back saying "
"Desiderata is disgusting. I have destroyed it. Desiderata indeed!"
Still, here's one of the least quoted part of the piece:
"But do not distress yourself with dark imaginings.
Many fears are born of fatigue and loneliness"
Writers thrive on fear, fatigue, loneliness and distress. The dark imaginings find voice and expression in the works of Kafka, Kundera and King(Stephen, that is). Writing in this way is creative. Communicating - or commercial acclaim - is, at best, a by-product, hardly worthy of sharing the pedestal or podium.
In short, a trophy case is for the collector, who must never ever be confused with the artist.

A Confederacy of Dunces

Here's a quote from Jonathan Swift: "When a true genius appears in the world, you may know him by this sign, that the dunces are all in confederacy against him." Applying this in the Singapore context, Dr Chee Soon Juan is a genius; and the previous stars, Chiam See Tong and Low Thia Khiang mere pretenders who were unmasked when they are praised by the PAP. The one consistent quality of Dr Chee: he never received any endorsement from the establishment.
Difficult as it may be to believe, this is not meant to propagate pro- or anti- establishment views. I merely want to say that even the unlikeable (by popular or notorious standards) form part of every democratic, civilised, society.
It is a good time for the average Singaporean (combined family income :$4,000.00 or below) to ask, paraphrasing Ronald Reagan circa 1981: are you better off than, say, 2elections (8years, give or take some) ago?
As we approach our National Day with increased pride (a recent survey says it is indicative of 90%, a 10% increase from 4/5 years ago), it would be nice if we extended our hands to the marginalised and disenfranchised, remembering that they too, form a part of the Singapore that we love.

A Reminder To Myself

I am against extremism. I am for remembering that there are many different ways of perceiving the same situation, which leads to differences of opinion.
That someone holds an opinion I consider to be wrong does NOT make that someone wrong-headed.
Lastly, as an example of my personal anti-extremism:
There is a middle path between being a small fish in a big pond and being a big fish in a small pond. Being a medium-sized fish in a medium sized pond. Not thinking big enough (in another person's eyes) is NOT thinking small.

A New Song?

Continuing the theme that this age is better endowed materially but spiritually bereft, a Straits Times(Sunday Times Aug 1, 2010 - "Forget iPad, give me prose" - a must read) journalist, Yen Feng, invoked a 19th century writer to describe our literary poverty: 'We are, as Henry David Thoreau said,"determined to be starved before we are hungry".....Thoreau, in an 1854 essay...advocates a life of simplicity and in nature...Of a particular house he says: "This was an airy and unplastered cabin, fit to entertain a travelling god, and where a goddess might trail her garments...The winds which passed over my dwelling were such as sweep over the ridges of mountains, bearing the broken strains, or celestial parts only, of terrestrial music..The morning wind forever blows, the poem of creation is uninterrupted; but few are the ears that hear it."...I cannot remember the last time I stood before such a wind.'
In an article commissioned by the New York Times titled "Stop multitasking", Bob Herbert writes: "There's a character in the August Wilson play Joe Turner's Come and Gone who says everyone has a song inside him or her, and that you lose sight of that song at your peril. If you get out of touch with your song, forget how to sing it, you're bound to end up frustrated and dissatisfied." Herbert goes on to relate that character's account of the time he lost touch with his own song, saying 'Something wasn't making my heart smooth and easy'... I don't think we can stay in touch with our song by constantly..Tweeting, or thumbing out messages..or piling up virtual friends...Try kissing more and Tweeting less...and stop talking so much. Listen."
I'm listening to the music of the spheres.

What's Going On

Plagiarising 4 non-blondes:
"Twenty - five years and my life is still
Trying to get up that great big hill of hope
For a destination
And I realized quickly when I knew I should
That the world was made up of this brotherhood of man
For whatever that means"
This blog - actually this blogger - is emerging from a dark place. Some would simply say "the ends justify the means" or "survival".Whatever.
In keeping a diary of sorts to track my attempts to survive the financial meltdown circa 2008, I had hoped to observe something about society's nobility; about Man's spirit of sacrifice for the greater good.
Suffice to say, I detect cannibalism in different guises, clothed with social labels of legitimacy. Emperor's clothes, indeed.
In short, I started out thinking this will not be like the Great Depression of the 20's.
I ended realising that while the financial conditions are better than the earlier age, the cohesiveness was much stronger in the last century.
Call me prophet of doom, but I think we're headed for something worse in the days ahead unless we re-discover our souls.

A Return....Of Sorts

I thought I was finished, the global recession was over. Then I read economists reminding us that during the 1930's after the government's initial round of stimulus measures, the stock markets recovered and the US government stopped the job creation because they were worried about growing debt levels and inflation. The markets plunged lower again.
So, some experts (???) are saying it's not over. Sluggish recovery, at best. Choppy roads ahead. A bit like the perspective on this miniature model of the leaning tower of Pisa.If you look at it one way, it looks like the real, life-sized tower. Placed alongside a human being, it's a miniature sitting in Taiwan's Doraemon Park.

Half Time Scores

Some stock-taking is in order.
1. My last posts indirectly challenged some economic gurus about their having likened this crisis to the Great Depression of the 1930's. Their recent writings have clarified that they meant to compare the PRESENT pace of job creation, deflationary effects on the economies and stock markets, rather than the ABSOLUTE material (and economic) comforts available to the average human being during the 2 periods. I will only say the tone of their writings AT THAT TIME sounded more dire. Which led me to keep this online "diary". If all that's being bandied about is the economic calculations, size of budgets, percentage growth or declines etc, I will certainly defer to the people in charge of the econometrics and statistics. In fact, Singaporeans will recall that some of these numbers are part of "Official Secrets". Ask the Finance Minister.
2. Once the clarification is published, it would seem I am quarelling with no one. I am all alone. THAT is depressing.
3. Thankfully - it's going to sound terrible soon- the latest polls reported by newspapers regarding happiness, and loneliness/isolation, my sense of feeling alone and uncared for is fairly commonplace.
I'm not rejoicing that other people suffer like me. Really I'm not.
It's a good chance to stress again that appearances can be deceiving. Even the numbers. Let's take someting obvious. You can be in a crowded room, yet feel so isolated and disconnected that loneliness is the strongest emotion that comes to mind immediately. Conversely, the SAGE can be all alone with no one around for miles, yet feel SO connected AS ONE to the universe and the cosmos beyond, that there is no "I", but "US". That dude is certainly FAR from feeling isolated or sad.
For the majority of us, "icons of mediocrity" (my pet name for Singaporeans), what then?
I guess (maybe only) the techie would approve of my answer: stay connected to others. Keep connecting with others. Don't lose touch with one another.
It is well to note that one of the most (frequently) permitted criticisms made against our political leaders is that they are "out of touch" with the common man.

Following Up - Why Do It?

Normally, I subscribe to the viewpoint that if your audience don't get it first time round, forget it. "If anyone has eyes, let him see. If anyone has ears, ;let him hear."
Not yesterday's post. Why? Unlike any other conspiracy theory, it actually affects ALL of us (melodrama intended).
You see, when it gets a little crazy and things look like they're spinning out of control, most people either:
a. turn to God or whatever superpower they believe in; OR
b. try to harness("exploit" may be more suitable) some bigger force to their advantage.
I should know; that's the unspoken expectation people have when they turn to the law.(Then blame the lawyers for the loopholes and imperfections in man-made rules).
People who choose b will naturally suck up to the "Chosen" in my last post. Sucking up leads to playing by their rules. Domination sequence completed.
People who choose a aren't out of the "danger zone". Somewhere along the way, their need/desire to regain sanity or control over the situation just makes it easier to psyche themselves into believing that God/the Being is telling them to play along with these "Chosen" people. The divine message is that they will unwittingly play into the hands of God, so all will be fine. There's even a biblical verse for it: "Render unto Ceasar that which is Ceasar's". Ergo, domination sequence completed.
See how serious it can be? The picture of shophouses against the skyscraper against sky seems apposite to my words from "The Sound of Silence":
"Hear my words that I might teach you
Take my arms that I might reach you
But my words like silent raindrops fell
In the night
And echoed in the well
Of Silence"

An Important Digression

Here'e the worst kept secret: there's a group of people who believe that only a "chosen few" who would ultimately be the winners at life, the universe and everything. These "chosen few" may be called "elites", "powerplayers", "kingmakers", "czars" or even "illuminati". That doesn't matter.
What matters is they have the wrong attitude towards the "non chosen". They think it is easy to manipulate the rest of the world. Of course, the way many people react to media hype tends to perpetuate this myth and elevate it to the ranks of a self-fulfilling prophecy.
When life hands you a terrible hand, when the cards are down, just remember: a prostitute with STD, facing the odds of giving birth to a deformed child, chose NOT to abort the pregnancy. The child grew up to be Beethoven.
There's also a scientific principle to this. It's called the Butterfly Effect. The best speech ever given by Winston Churchill? "Never give up! Never give up! Never give up!"

Exaggerations In An Age Of Selfishness

I am as against false modesty as the next person; but self aggrandisement repels me in equal, if not stronger, measure.
Why the outrage? Well, where do I begin? Right. I started this blog as someone concerned about the financial upheaval in which Wall Street threatens to completely overwhelm main street. I did very poorly in Economics in my GCE A Levels (actually it is regarded as an 'O' level subject at Pre-university level). I would never presume to question the wisdom of professors in economics.
But, look what happened!? Prof Paul Krugman foresaw the "Return of Depression Economics". I said in Feb 2009 that this is NOT as bad.
I think I should either:
A. Claim to be Nostradamus' successor; or
B. Anticipate a conspiracy theory to divert attention and resources from the problem of climate change, carbon emission, and the depletion of the ozone layer.
They now talk about the H1N1 Swine flu "pandemic". WHO now says it may have "overreacted". What are the people in charge doing?!

A Surreal Month

It has been a month since my last! Sole breadwinner with economic burdens, fears of even more financial hardship, family disharmony, job stress, breakdown in other relationships....take your pick. Anyway, who am I to comment on Thaksin's problems!!??At least he had some Singapore tax dollars in his pockets for his troubles.
Still, the headline news appear less gloomy on the finance front. At least there's less comparison to the Great Depression which few of us have been through.
Perhaps there's a growing realisation that the troubles of the asset-or-cash-rich isn't that interesting anymore. Or maybe it's just denial kicking in.
A friend told me that the least a Singapore parent should do is cut the amount of tuition his children receive and reclaim some of the teaching responsibility instead. If nothing else, the parent-child bond would improve.
What about the grades? "Those who matter won't mind", eh? If all else fails, let's play "Don't Forget the Lyrics" online. Only, the twist is we use the lyrics of different politicians and their failed predictions. Start with the Singapore governments forecase in Jan of -5.5% growth. What's the currently correct lyrics? -9%. Compared with President Obama's lyrics: signs of economic recovery are present. Colour of the lyrics? Purple (for the prose).

My Ironic Life Story

Just to start the ball rolling with a hypothetical question: what if there were no hypothetical questions?
A blog's a diary, right? So...the meaning of life...mine as a case in point.
At 25 years of age, a well meaning medical undergraduate (now a well-connected doctor) persuaded me that I should donate sperms to a fertility clinic because:
(a) I would help childless couples;
(b) I would get paid ( a pittance - $180.00 per six shots over 2 months).
At 25, I thought no more beyond an assurance that I would never get to know the recipients' identities and the chances of consanguinity are infinitesimally small. (Just to be safe, note the year you donated, and the year your own child is born. Don't encourge my child to date anyone with that age difference).
For the record, the clinic contacted me to convey news that the recipient of my sperms was successful, and they were passing the receiver to let me hear the thank you from the couple - but no more than that. Absolutely.
Oh, and my first test revealed a low sperm count (possibly because I masturbated the night before - or an ominous sign. See the later part of this post.)
I wasn't a very thinking person back then.
Then came the octo-mum, who had been artificially inseminated , had 6 babies; and now wanted more and ended up with 14 babies she cannot afford to raise on her own.
Then came a book, Eleanor Rigby by Douglas Coupland, about a baby boy, given up by his mother, who tracked her down 20 years later, for her to find out he had multiple sclerosis (lke Stephen Hawking). Like the octo-babies, the boy had foster parents who just couldn't heck child rearing responsibilities.
Also, like her, he had a natural talent to sing any song backwards (like when you play the recording backwards on a record player/open reel casette tape player). He then dies on her, but thereafter reunited her with the biological father - whom she could not remember earlier (because she was stoned drunk when it happened).
Well, what if my "baby" had been donated to a couple who are either naturally incapable of parenting , or met with some accident? Shouldn't he/she be told how to find me? As it happens, I'm financially better off- compared to 20 years ago, but am disgnosed as suffering from an extremely low testosterone level for a 45 year old (it's worse than a 60-year old's, I'm told). Or what if, like me, he/she is extremely timid and shy and does not know that some undefined lifechanging moment is just waiting round the corner for him/her. How can I let him/her understand that each of us, like the humans in the Matrix, has something unique, even if we are not in the headline news? We could still be the vote that brings the next Roosevelt or Hitler to power? The soldier or official who disobeyed a tyrant, or fired into Tiananmen protesters, in any event sparking a historical riot or revolution. Each of us carries the DNA to be the One. It just needs an awakening. By the right one.
In the case of my offspring, I'm quite sure there's an innate ability to remember the long forgotten tune and lyrics of a song sang in the kindergartens in 1969. and freeze in our memory events which happened more than 35 years ago. Believe me, this might be pretty useful if you have classmates who are likely to make the news headlines. Or simply recalling at will an old episode of Rockford Files. Or Petrocelli. Or the Rookie - with Kate Jackson before she was Sabrina in Charlie's Angels. Scary , huh?

How Much We'd Spend To Get A Better Picture

This morning, a professional photographer shared some information about the latest in digital photography with a friend of mine. In essence, a very good camera is about S$7,000.00. But it'll soon cost you another $7k to get the latest upgrade. By which time the 1st $7grand camera you got was worth only $3,500.00. But production houses, a camera man's customers, would insist you have the latest equipment, however little improvement there may be in the latest gizmo.
Tough?
On another vein, my customers yesterday paid more than $200.00 to get a fengshui master to confirm that their intended business venture can expect to see a good return on the investments very soon, by next year at the latest.
Come to think of it, isn't this what most governments are doing? Telling their citizens they must approve of multi-billion dollar "stimulus packages" to improve the prospective picture of their economies?

A Light Fix - Just For Me

Just had my weekly fix of "Boston Legal Season 4". The star billings this week is definitely NOT awarded to Denny Crane or Alan Shore. It's to England-born-and-bred Tara Summers - see picture - playing newbie Katy Lloyd. Her accent (dipthongs, actually) is marvellous, especially employed in (gently) telling a US Judge not to be a cultural snob by taking away custody rights of a Mexican father who discovered his 10-year old son is a bullfighting genius. Brilliant.
Also gaining kudos is a gay 4 star general who successfully sued the US Army for sacking him for coming out (admitting his sexuality). The Judge hated Shirley Schmitt (Candice Bergen)- her arguments didn't work- but he just loved this heroic man.
Btw, there are blogs and forums on each episode out there!!! Alright, I'll own up to forcing my not-very-inclined-towards-English staff to brush up on passion about work by watching BL on Wed , 12 midnite. Watch it, it's free to air.
As I blog, the US stock markets are holding on to modest gains. Is the worst over? No, just signs that everything's extremely exaggerated, as always. Many called it "dead cat bouncing back to life".

Netponsibility, Not NetPornography

I see people. Depressed people.(Come on, someone must have remembered this line from "6th sense" the movie) People turning to the heavens, asking "why me?" So, in 2 previous postings, I tried to say that the Gods (if they are what we think) maybe decided that this financial mess which men have created would be a good chance to clear the climate mess which was also caused by humans' wasteful actions.
Just after I suggested that recovery may just be around the corner, the US stock markets surged by hundreds of points.
So now I'm psychic. But just to be safe, remember: the Net takes no responsibility for well-being, financial, sexual or otherwise. Don't ever take it seriously.

A Bit Of Stock Taking

Want to know my definition of a philosopher? Someone who simply can't help taking himself too seriously. How do I know? I'm a "philosopher".
Exhibit A(to P) for the prosecution - my previous postings. How long before they descended into gratuitous (read "no-one-asked-you-for-an-insight-did-they") commentary on the current crisis? Every 2 blogs, I believe. Hey, this is the Internet. Not to be taken as guide, philosopher (there!) and friend, is it? As a parent, I'm definitely not letting my kids believe all that "be an all night sex machine" cr*p. Hell, even if I were not a parent, I won't want my lover to think that. (groan, the inadequacy).
Here's the thing. I happen to think we're going to recover much faster than expected; maybe it's connected to the whineging going on. Once we move past the "what shall I do, where will I go, how will I live", the corner is waiting to be turned.

Fantasy Galore

Advanced Norse-Grecian Extraterrestrial Lifeforms (ANGELs) gathered on the head of a pin to decide on the fate of humans on planet Earth. 2 pressing issues were on the agenda: Global warming and financial mismanagement.
The meeting began with Odin, aka Zeus (depending on the preferred jurisdiction), giving a brief account of the problem.
Human beans consume more than they need. Then they shit. This produces greenhouse gas which overheats the planet. They also need to make more money to support their overindulgent lifestyles. So they generate financial bullshit, which overheats - and overhypes - their borrowings which they cannot repay.
End result? No more natural resources, no more money. Left to their own devices, they turn to age-old remedies. They pray for our divine intervention (see Arthur C Clarke, who suggested that a technologically advanced race would seem like gods to the primitive culture) in the temples which we, in moments of vanity, inspired them to build in the first place.
What, asked Odin, can we do? What should we do?
Athena, Odin's twin in wisdom, proposed that ANGELs not intervene with free markets and monism (the worship of money), which are men's own invention. In due time, lack of money would prevent humans from consuming the natural resources. Consequently, the eco-balance will be restored, global warming will be checked. Voila!
There being no better alternative, the ANGELs, treated like gods, unanimously resolved to stand by and do nothing at all.

The Dilemma of Singapore Sam

Sam Seng of Singmoney.com a.k.a. jiang-zua-ji is really stuck. Like all patriotic Singaporeans looking out for himself and, where possible, his neighbours, he wants to be part of the solution. Only this time round, the leaders cannot seem to pick the right people to spend on the stimulus package. Just weeks earlier, world class banks like Citibank and UBS wiped billions off the investment portfolios of the government linked companies.
If Seng lacked anything, it is self-confidence. "So many scholars, so much PHd's, such strong reserves, they also got it wrong. Me? Forget it, I'm even worse!"
Informed common sense says, spend a bit more. You might save company A from closing down, help save the shopowner from bankruptcy, or the job of the shop assistant. However, self-preservation says, what can my spending do if no one else gives the shop business. Furthermore, I might go bankrupt myself. Can I afford it? Let someone else be the hero.
If ever a society lacked the belief that an individual can make all the difference, it's the utilitarian society that largely encourages the sacrifice of the one person for the greater good of many.
One last thought for risk managers: the rating agencies who got it so wrong in rating securities corrupted by the sub-prime mortgages mixed with the good stuff as AAA grade, they mismanaged big time at the worst possible time. It's time to take a risk. Anything is better than inaction. But who can be trusted with the spending solution?
Addendum: What would I do? I'd follow the classic words to being a Man:
"If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breath a word about your loss" - That's what it takes, that's what we must do.