Dear Mr. Tan Kin Lian
I am getting worried about the financial crisis that Singapore is facing. MM said that Singapore has strong reserves. I am not sure if the reserves are still there.
How much has Singapore invested in the banks like UBS, Merrill Lynch, Citigroup and other banks? How much is Singapore guaranteeing in the IR project by Sands? Why should Singapore invest in the global banks when they are in deep trouble? Are we trying to bail them out?
I do not know how much has been invested in these global banks and also the terms of the investments. Perhaps, someone can do some research and share the information here.
I recall that, in some cases, the investments were made in bonds, so the actual loss may not be that large - although the share price may have dropped a lot. In the case of Merrill Lynch, there was an arrangement for a compensation in case the share price dropped during a certain period. This helped to reduce the loss. In fact, it turned out to be profitable for us.
At the time of the investment, I personally thought that it was a good opportunity to invest in these banks at the knocked down price. I was not aware about the extent of the leverage and risks carried in their books. With the benefit of hindsight, we should not have have made these investments, but these facts were not known at that time - at least to the general public.
I do not recall any mention about guaranteeing the loan by Sands. But, I think that something should be done to keep the project from being a white elephant. The global financial crisis was unexpected when the project was approved two years ago. How the world has changed in a short time!
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