Saturday, September 05, 2009
BBC: Insurance boss attacks fat cat pay
Read this article. It explains why you get a poor return on your participating policy.
A new society (3) - Raising a Family
The raising of a family can be made an individual or a social decision. I prefer it to be a social decision.
In a society, each family can have the right to raise two children with the cost being largely borne by the society. The cost will cover pregnancy, childbirth, medical care of the mother and child, education of the child and an allowance to be given to each child.
This will encourage every family to have at least two children. Families that wish to have more children will have to bear a larger proportion of the cost, maybe 50% to 70%.
Some religion encourage their followers to have children, according to the will of God or Allah: "Go forth and multiply". Similarly, a secular society can meet a large part of the cost of raising children.
If a large part of the cost is borne by society, the citizens will have to pay a higher tax. But they will get it back through the benefits provided to their children. Those who prefer to remain single will have to pay a tax for reduce the burden of the parents. This will encourage more people to have a family and raise children.
Maybe, each person can work 1 or 2 hours a day (on top of 4 hours of work for the basic necessities) to pay for the cost of raising the children needed by society.
Tan Kin Lian
In a society, each family can have the right to raise two children with the cost being largely borne by the society. The cost will cover pregnancy, childbirth, medical care of the mother and child, education of the child and an allowance to be given to each child.
This will encourage every family to have at least two children. Families that wish to have more children will have to bear a larger proportion of the cost, maybe 50% to 70%.
Some religion encourage their followers to have children, according to the will of God or Allah: "Go forth and multiply". Similarly, a secular society can meet a large part of the cost of raising children.
If a large part of the cost is borne by society, the citizens will have to pay a higher tax. But they will get it back through the benefits provided to their children. Those who prefer to remain single will have to pay a tax for reduce the burden of the parents. This will encourage more people to have a family and raise children.
Maybe, each person can work 1 or 2 hours a day (on top of 4 hours of work for the basic necessities) to pay for the cost of raising the children needed by society.
Tan Kin Lian
Health insurers reject claims
President Obama wanted to introduce a "public option". It will allow the uninsured to choose a health plan provided by the Government. This is intended to provide competition to health insurers and make them more efficient.
The health insurers industry lobby against the public option. They told Americans that the public option would lead to a "death panel" will have responsibility to control cost and decide if any insured person should receive expensive treatment.
As a result of this lobby, many Americans are now afraid of the "public option". But the insurance industry is not being honest and truthful. They are already adopting this practice. Read this article.
Voilunteer for FISCA
If you wish to volunteer or join FISCA, please go to the website, www.fisca.sg
Please do not call me or send e-mail to me, as I am not able to personally handle all of these requests. Thank you for volunteering and joining.
Loan insurance limit challenged
Read this article. It shows how the Consumer Association and the Regulators (Financial Services Authority and Competition Authority) look after the interest of consumers in the UK. We need to learn from them. It is not just business.
Lack of transparency and fairness
I posted the case of a policyholder who paid an annual premium of $2,000 and received $54,000 after 21 years (yield of 2.2%).
A similar policy, taken with another insurer, would have given a yield of 5% p.a. giving a payback of $75,000. The difference is $21,000 or 39%.
Where did the $21,000 disappear to? It went into high expenses or are retained in the fund to "smooth the bonus". There is lack of transparency and fairness. The policyholders are at the mercy of the insurance company!
A good way to overcome this problem is to introduce the calculation of asset share for each individual policy, as implemented in Malaysia.
A similar policy, taken with another insurer, would have given a yield of 5% p.a. giving a payback of $75,000. The difference is $21,000 or 39%.
Where did the $21,000 disappear to? It went into high expenses or are retained in the fund to "smooth the bonus". There is lack of transparency and fairness. The policyholders are at the mercy of the insurance company!
A good way to overcome this problem is to introduce the calculation of asset share for each individual policy, as implemented in Malaysia.
Research 2 - Meeting the Basic Needs of a Population
I wish to ask for a volunteer to carry out this research. If you wish to volunteer, please send an email to kinlian@gmail.com.
1. This research is to look at the percentage of the population that is required to be occupied to meet the basic needs of the population, such as food, shelter, clothing, health and education. This study excludes the secondary needs, such as entertainment, leisure and discretionary expenditures.
2. What percentage of the population is engaged in the occupations that cater for the basic needs?
Research 1 - Cost of Raising a Child
I wish to ask for a volunteer to carry out this research and to submit a report to me. If you can volunteer, please reply to kinlian@gmail.com.
1. If a country has more children, how many additional jobs will be created, e.g. teachers, doctors, nurses, carers and other occupations that are directed connected to taking care of the child from birth till the child enters the workforce. You can add the hardware cost, such as building schools, child care centers and medical clinics for the children.
2. Estimate the total annual cost and divide by the number of children. This will be the cost for each year of raising a child.
Which government agency is responsible?
A journalist asked me: "Mr. Tan, as motor insurance fraud have been quite rampant, which government agency should address this problem? Should it be MAS or the Land Transport Authority?
I replied that this is a shameful state of affairs. There is only one Government in Singapore. How can one agency (or department or ministry) point its fingers towards another agency to solve the problem? At the end, no agency take responsibility and the problem remains unsolved.
Finger pointing is now so prevalent that it now becomes a Singapore culture to avoid responsibility. If the people at the top behave in this manner, why should the people lower down do differently?
Many scams and cheating are not investigated, even if complaints are lodged. The Government officer ask the complainant to "provide evidence" before they will act. It is difficult for the ordinary people to provide hard evidence, as they can only be carried out by the Police with the powers and resources to carry out investigation into suspected crimes.
Quite often, the complaints are usually just filed away and investigation is not carried out. Our Government officers prefer to sit behind the desk to write papers, rather than go out to investigate.
This has developed into a habit for the past 15 years and has led to an increase in cheating cases, not only with motor insurance claims but also in investments and other areas.
Tan Kin Lian
I replied that this is a shameful state of affairs. There is only one Government in Singapore. How can one agency (or department or ministry) point its fingers towards another agency to solve the problem? At the end, no agency take responsibility and the problem remains unsolved.
Finger pointing is now so prevalent that it now becomes a Singapore culture to avoid responsibility. If the people at the top behave in this manner, why should the people lower down do differently?
Many scams and cheating are not investigated, even if complaints are lodged. The Government officer ask the complainant to "provide evidence" before they will act. It is difficult for the ordinary people to provide hard evidence, as they can only be carried out by the Police with the powers and resources to carry out investigation into suspected crimes.
Quite often, the complaints are usually just filed away and investigation is not carried out. Our Government officers prefer to sit behind the desk to write papers, rather than go out to investigate.
This has developed into a habit for the past 15 years and has led to an increase in cheating cases, not only with motor insurance claims but also in investments and other areas.
Tan Kin Lian
Friday, September 04, 2009
Duty of the Government
Someone posted an anonymous comment, "people should look after their interest, instead of depending on the authority to take care of them. "
This is only half true. It is the duty of the Government to ensure that thieves and crooks do not go around cheating people. It is so easy for these crooks to create financial scams. If complaints are made, the authority should investigate and take action to bring these culprits to court.
These dishonest people should not be allowed to operate freely, by advertising their dubious products, holding sales seminars and sending sales people to push them to the unsuspecting public.
We now have a sad state of affairs. Complaints of cheating are not investigated by the authorities. People who are cheated are asked to take legal action against the culprits.
This is only half true. It is the duty of the Government to ensure that thieves and crooks do not go around cheating people. It is so easy for these crooks to create financial scams. If complaints are made, the authority should investigate and take action to bring these culprits to court.
These dishonest people should not be allowed to operate freely, by advertising their dubious products, holding sales seminars and sending sales people to push them to the unsuspecting public.
We now have a sad state of affairs. Complaints of cheating are not investigated by the authorities. People who are cheated are asked to take legal action against the culprits.
Wasteful marketing materials
I find it wasteful for credit card companies to be sending the marketing materials. I believe that most customers hardly pay attention to them. It is costly to print and mail them.
The bank recover these cost through high interest charges and fees. If they look after the welfare of their customers, they should avoid these wastage and reduce their charges.
The bank recover these cost through high interest charges and fees. If they look after the welfare of their customers, they should avoid these wastage and reduce their charges.
Values that define my character
I wish to share with you the following values that guide my character:
a. honesty
b. fairness
c. courage
d. be positive
e. work for benefit of society
I wish to encourage others to adopt these values. They will create a better society.
a. honesty
b. fairness
c. courage
d. be positive
e. work for benefit of society
I wish to encourage others to adopt these values. They will create a better society.
Yield of 0% for 21 years of premium
Hi Kin Lian,
I have been following with great interest comments concerning the need for the insurers to be more transparent about the participating bonuses and surrender values and other related matters made by you and other distinguished professionals and the insurers themselves.
My wife is personally involved with her own policy as she was considering cashing out
her policy and using the money for other modes of investment. We were disappointed that the insurer would not bother to explain how they derived at the surrender value even though the offer is at odds with the documents that their office furnished my wife earlier.
Their financial planner (sales person really) briefly said that the difference between what we should be entitled as per the document and what we have been offered is due to the underlying value in their investments that have been impaired caused by the global financial crisis.
We would be agreeable for you or another person to use our case as an example of the lack of transparency in the industry, if indeed this is the case here.
SUMMARY OF KEY FIGURES
Annual premium for whole life policy $2,013
Duration of policy: 21 years
Cash value: $54,070
Yield over 21 years: 2.2% p.a.
Total premiums paid, inclusive of rider premium: $54,074 (yield 0.0%)
After paying premiums for 21 years, the policyholder just obtained the total premiums back. The yield is 0%. If the rider premiums are excluded, the yield is 2.2% p.a.
I have been following with great interest comments concerning the need for the insurers to be more transparent about the participating bonuses and surrender values and other related matters made by you and other distinguished professionals and the insurers themselves.
My wife is personally involved with her own policy as she was considering cashing out
her policy and using the money for other modes of investment. We were disappointed that the insurer would not bother to explain how they derived at the surrender value even though the offer is at odds with the documents that their office furnished my wife earlier.
Their financial planner (sales person really) briefly said that the difference between what we should be entitled as per the document and what we have been offered is due to the underlying value in their investments that have been impaired caused by the global financial crisis.
We would be agreeable for you or another person to use our case as an example of the lack of transparency in the industry, if indeed this is the case here.
SUMMARY OF KEY FIGURES
Annual premium for whole life policy $2,013
Duration of policy: 21 years
Cash value: $54,070
Yield over 21 years: 2.2% p.a.
Total premiums paid, inclusive of rider premium: $54,074 (yield 0.0%)
After paying premiums for 21 years, the policyholder just obtained the total premiums back. The yield is 0%. If the rider premiums are excluded, the yield is 2.2% p.a.
Account of Gathering of 22 Aug 2009
Total donation received: $1301
-----
Expenses
Printing of placards $380
Hire of portable speaker $100
Plain water $15
total $495
------
Balance donated to FISCA $806
UK: Director of Land Banking Company Gets Seven Year Ban
Read this article. It shows the possible wrong doings that can be committed by a land banking company, such as:
a) mis-representing the product
b) no proper accounting of the investment funds
c) repeated sales of the same plots
If this wrong doings are committed by a land banking company operating in Singapore, which Government authority is responsible to take action? Is it MAS, Commercial Affairs Department or some other body? If the investor makes a complaint, will the relevant authority make an investigation?
Does land banking come under Collective Investment Scheme?
I met with four people who were sold to invest in a land banking scheme. The promoter gave them a guarantee (in the form of an option) to buy back their investment at the end of 12 months for a full refund of their principal plus a guaranteed return.
These investors have now submitted their redemption request, but the promoter refused to honor the agreement and gave some unsatisfactory and unclear explanations.
One investor made a complaint with MAS and were told by the MAS official that land banking did not come under MAS. In my view, unless I am mistaken, land banking should fall under the scope of a collective investment scheme, which is administered by MAS. There are controls under the law on collective investment scheme to prevent the misappropriate of the funds collected from investors. This risk applies to land banking as well.
I will appreciate if a practising lawyer can clarify if land banking comes under the collective investment scheme?
Tan Kin Lian
These investors have now submitted their redemption request, but the promoter refused to honor the agreement and gave some unsatisfactory and unclear explanations.
One investor made a complaint with MAS and were told by the MAS official that land banking did not come under MAS. In my view, unless I am mistaken, land banking should fall under the scope of a collective investment scheme, which is administered by MAS. There are controls under the law on collective investment scheme to prevent the misappropriate of the funds collected from investors. This risk applies to land banking as well.
I will appreciate if a practising lawyer can clarify if land banking comes under the collective investment scheme?
Tan Kin Lian
Lower cost of living - the good old days
30 years ago, Singapore had a good economic model, based on a lower cost of living. The price of HDB flats were affordable (at 10% of today's prices). The HDB shops and stalls were rented at inexpensive rates. It was possible for the merchants and stall holders to offer their products and food at affordable prices. The cost of living was low.
80% of the population lived in HDB estates and were able to get by on modest wages. There was less stress. People who proud to be Singaporeans and to enjoy a good quality of life.
This economic model changed after 1985. Under the "asset enhancement" strategy, the prices of property was allowed to inflate to high levels. This was supposed to create more wealth. It produced the opposite and negative effect and enslaved the future generation to a high cost of living and high debts. Life was stressful. The sever decline in birth rates occurred during these past two decades.
There is still the chance for us to get back to the good old days. But we need to have leaders that think a different way.
Tan Kin Lian
80% of the population lived in HDB estates and were able to get by on modest wages. There was less stress. People who proud to be Singaporeans and to enjoy a good quality of life.
This economic model changed after 1985. Under the "asset enhancement" strategy, the prices of property was allowed to inflate to high levels. This was supposed to create more wealth. It produced the opposite and negative effect and enslaved the future generation to a high cost of living and high debts. Life was stressful. The sever decline in birth rates occurred during these past two decades.
There is still the chance for us to get back to the good old days. But we need to have leaders that think a different way.
Tan Kin Lian
A generous donor
One investor donated $500 towards the expenses of the Gathering on 22 August. As the actual expense was quite low, and the total donation exceeded the expenses, I wanted to return back $400 to the donor.
He replied that he wish the money to be donated to FISCA. He is generous. I hope that more Singaporeans can learn to be generous (and not selfish), and to think about the welfare of others.
A new society (2) - Distribution of work
We need a fair way to distribute the work among the people in a society, so that every person has the right to work at a suitable occupation for a fair wage, that is sufficient to meet their basic needs.
Based on the size of the population and the output of the essential services and products, it is possible to determine the number of people to be engaged in each occupation. The workers can bid for these jobs. A right quantum of work should be allocated to each person, to ensure a fair distribution of the work.
The rate for each job can be determined by supply and demand, almost like the bidding system. If there are more people willing to do a certain occupation at a specified rate per hour, the rate has to be adjusted downwards to reach a market balance. If there are less people interested, the rate has to be adjusted upwards. This rate can apply for a period of six or twelve months.
Under this system, it may be possible for a doctor to earn (say) $30 an hour and an office worker to earn $10 per hour. This will reflect the market conditions and the training needed for the occupation.
A doctor can earn 3 times of an office worker, but not 30 times or 300 times. Each qualified doctor is confident of being able to earn a certain number of hours of work each day, based on the way that the work has been allocated.
It is possible to introduce fair competition in this system. For example, the consumers know that standard rate for a doctor is $30 an hour. An individual doctor may charge a higher or lower rate than the standard rate, but this has to be disclosed to the patients. The patient can decide whether to go for the standard or the special rate.
The doctor can work more or less than the standard hours, but if there is a fair balance between supply and demand, there is no need for excessive or predatory competition. There is enough work to be shared among the doctors.
The same concept can apply to other occupations.
Tan Kin Lian
Based on the size of the population and the output of the essential services and products, it is possible to determine the number of people to be engaged in each occupation. The workers can bid for these jobs. A right quantum of work should be allocated to each person, to ensure a fair distribution of the work.
The rate for each job can be determined by supply and demand, almost like the bidding system. If there are more people willing to do a certain occupation at a specified rate per hour, the rate has to be adjusted downwards to reach a market balance. If there are less people interested, the rate has to be adjusted upwards. This rate can apply for a period of six or twelve months.
Under this system, it may be possible for a doctor to earn (say) $30 an hour and an office worker to earn $10 per hour. This will reflect the market conditions and the training needed for the occupation.
A doctor can earn 3 times of an office worker, but not 30 times or 300 times. Each qualified doctor is confident of being able to earn a certain number of hours of work each day, based on the way that the work has been allocated.
It is possible to introduce fair competition in this system. For example, the consumers know that standard rate for a doctor is $30 an hour. An individual doctor may charge a higher or lower rate than the standard rate, but this has to be disclosed to the patients. The patient can decide whether to go for the standard or the special rate.
The doctor can work more or less than the standard hours, but if there is a fair balance between supply and demand, there is no need for excessive or predatory competition. There is enough work to be shared among the doctors.
The same concept can apply to other occupations.
Tan Kin Lian
Thursday, September 03, 2009
Will the PM or MAS agree to a meeting?
Dear Mr. Tan,
Do you seriously expect the Prime Minister or the MAS to agree to your request for a meeting (on the credit linked notes)?
REPLY
My opinion on this matter is irrelevant. It is more important for the public to know the PM or MAS agree to this request, or just ignore it.
Do you seriously expect the Prime Minister or the MAS to agree to your request for a meeting (on the credit linked notes)?
REPLY
My opinion on this matter is irrelevant. It is more important for the public to know the PM or MAS agree to this request, or just ignore it.
Quote: The worst is not behind us
Quote: Thanks to the radical actions of the G-7 and others, the risk of a total systemic financial meltdown has been reduced. But unfortunately, the worst is not behind us. This will be a painful year. Only very aggressive, coordinated, and effective action by policymakers will ensure that 2010 will not be even worse than 2009 is likely to be.
Nouriel Roubini is professor of economics at New York University’s Stern School of Business.
Nouriel Roubini is professor of economics at New York University’s Stern School of Business.
MAS defends the interest of financial institutions
COMMENT POSTED IN MY BLOG
Now every body understand how bold our MAS in defending the interest of the FIs under the instruction of our top learders.They openly said the HK accross the board method is not acceptable. You think HK people are all stupid and we are smarter? The whole world thinks otherwise.
MAS said FIs are not using legalistic approach. I wonder what approach they are using? MAS is blind or twists the fact that FIs are forcing investors to take action becuse investors have no alterlative. How dirty was these tactics adopted by MAS.
Do you think you will have a fair hearing in FiDREC? Every FI can send 2 legally trained officers as defenders, and the RM, who mis-sell and mis-rpresent the products to us, will stand as witness. You are alone to fight against them.
Do you find the arrangement by FiDREC is rediculous?
The fight is over. The winner--FIs. Score--100 to 0.
Now every body understand how bold our MAS in defending the interest of the FIs under the instruction of our top learders.They openly said the HK accross the board method is not acceptable. You think HK people are all stupid and we are smarter? The whole world thinks otherwise.
MAS said FIs are not using legalistic approach. I wonder what approach they are using? MAS is blind or twists the fact that FIs are forcing investors to take action becuse investors have no alterlative. How dirty was these tactics adopted by MAS.
Do you think you will have a fair hearing in FiDREC? Every FI can send 2 legally trained officers as defenders, and the RM, who mis-sell and mis-rpresent the products to us, will stand as witness. You are alone to fight against them.
Do you find the arrangement by FiDREC is rediculous?
The fight is over. The winner--FIs. Score--100 to 0.
Petition to Prime Minister - Reply by MAS
The Petition, signed by 777 people was sent to the Prime Minister on 26 August. The Prime Minister's office forwarded it to the Monetary Authority of Singapore. Here is the reply (31 August 2009) from Andrew Khoo, Director, Capital Markets of MAS.
The reply is disappointing, as expected. I have asked Andrew Khoo for a meeting for me and a few representatives of the signatories to meet with him. I have also asked the Prime Minister's Office for a similar meeting. I have not received a reply from both parties.
The reply is disappointing, as expected. I have asked Andrew Khoo for a meeting for me and a few representatives of the signatories to meet with him. I have also asked the Prime Minister's Office for a similar meeting. I have not received a reply from both parties.
Tan Kin Lian
Investors of Pinnacle Notes can get news from Lion Investors
Hi Mr Tan
Sometimes, investors just do not know which direction to head, hence i would like to share what i discover after joining FISCA.
FISCA has lead me to articles in www.lioninvestor.com. Under "Pinnacle", there was a "Pinnacle Notes Default". The discussions there is active. Pinnacle Action Group entry on 11 jun 2009 mention a class action.
I do not know if it will be helpful to others who visit your Blog but i was very happy to know i can get some info there.
Sometimes, investors just do not know which direction to head, hence i would like to share what i discover after joining FISCA.
FISCA has lead me to articles in www.lioninvestor.com. Under "Pinnacle", there was a "Pinnacle Notes Default". The discussions there is active. Pinnacle Action Group entry on 11 jun 2009 mention a class action.
I do not know if it will be helpful to others who visit your Blog but i was very happy to know i can get some info there.
Survey: Lehman bonds
Dear Mr Tan
I have been following your commendable efforts to help those stuck with Lehman's Mini bonds et al.
Do you know of people stuck with Lehman Brothers Holdings' bonds and who now have to file proofs of claim?
In early 2008, I bought $250,000 of Lehman Brothers Holdings Inc. 4.20% 5-year Fixed Rate Notes Due 2013 from OCBC who is the Joint Lead Manager and Bookrunners (together with Lehman Bros S'pore Pte Ltd) .
I need help to file the claim by Sept 22 2009 and have contacted OCBC but they apparently are not very sure themselves what is happening.
Do you know of anybody else in the same predicament? Perhaps you could circulate this note to help find out how many others are similarly stuck and how we could get together to organise something for mutual help.
Thank you for your time and assistance.
FOR THOSE WHO ARE STUCK WITH LEHMAN BONDS, PLEASE GIVE YOUR PARTICULARS IN THIS SURVEY.
I have been following your commendable efforts to help those stuck with Lehman's Mini bonds et al.
Do you know of people stuck with Lehman Brothers Holdings' bonds and who now have to file proofs of claim?
In early 2008, I bought $250,000 of Lehman Brothers Holdings Inc. 4.20% 5-year Fixed Rate Notes Due 2013 from OCBC who is the Joint Lead Manager and Bookrunners (together with Lehman Bros S'pore Pte Ltd) .
I need help to file the claim by Sept 22 2009 and have contacted OCBC but they apparently are not very sure themselves what is happening.
Do you know of anybody else in the same predicament? Perhaps you could circulate this note to help find out how many others are similarly stuck and how we could get together to organise something for mutual help.
Thank you for your time and assistance.
FOR THOSE WHO ARE STUCK WITH LEHMAN BONDS, PLEASE GIVE YOUR PARTICULARS IN THIS SURVEY.
A new society (1) - Right to a job on fair terms
I make a rough guess that 50% of the working population will be sufficient to produce the goods to meet the basic needs of the population for food, shelter, clothing, health and education, including the manufacturing industries that are needed to support the basic industries.
If the work is shared fairly among the working population, it is possible (based on my guess) for each person to work 4 hours a day to contribute their share of the work and to receive an income that is sufficient for a decent standard of life.
In this environment, there is no need for a person to worry about inability to find a job. There is no need for them to work more than is needed, and in the process deprive another person of their right to a job.
It is possible for people to work longer than the minimum hours, so that they can accumulate savings for the future, or additional income to raise a family or to engage in leisure, social or religious activities. These are optional activities that come after the person has the security of a job.
It is possible for society to mandate a wider scope of the basic needs, to include raising a family or involved in culture or religion. The cost of these activities can be borne by society collectively, and expand the pool of work that needs to be done.
My ideas are influenced by the need for social justice and the need for society to set the norms for its future (instead of the "me first" attitude of individualism). However, my concept still relies on the mechanics of the market to ensure that the people can choose the suitable work based on their interest and skill and that the remuneration can be based on supply and demand, but determined holistically.
Tan Kin Lian
If the work is shared fairly among the working population, it is possible (based on my guess) for each person to work 4 hours a day to contribute their share of the work and to receive an income that is sufficient for a decent standard of life.
In this environment, there is no need for a person to worry about inability to find a job. There is no need for them to work more than is needed, and in the process deprive another person of their right to a job.
It is possible for people to work longer than the minimum hours, so that they can accumulate savings for the future, or additional income to raise a family or to engage in leisure, social or religious activities. These are optional activities that come after the person has the security of a job.
It is possible for society to mandate a wider scope of the basic needs, to include raising a family or involved in culture or religion. The cost of these activities can be borne by society collectively, and expand the pool of work that needs to be done.
My ideas are influenced by the need for social justice and the need for society to set the norms for its future (instead of the "me first" attitude of individualism). However, my concept still relies on the mechanics of the market to ensure that the people can choose the suitable work based on their interest and skill and that the remuneration can be based on supply and demand, but determined holistically.
Tan Kin Lian
A fairer distribution of work
Many young people are worried about their ability to find a job on graduation. If they are unemployed, how can they repay their study loan and meet their daily expenses, especially if their parents are not well off.
Some people with jobs work long hours, so that they can keep their jobs. In the process, they are depriving other people of the chance to work.
This is a bad capitalist system. It exploits the weak so that the strong can get richer. It creases stress and economic insecurity. It leads to a declining population as many people decide that they cannot afford to raise children.
Is there a better and fairer system? Yes, but we have to think out of the box. To provide the basic needs of every person on earth, there is a certain volume of work to be done. If this volume of work is shared fairly among all the working people, there is no need for anyone to be unemployed or for others to be overworked.
Maybe, each person needs to work only a few hours each day and will have more time for leisure and socialising. They will also have more time to raise a family. If there are more children, there will be more work to take care of and educate the children.
There are advantages for a fairer system of distributing work and rewards - a better quality of life, less stress, more children, happier people. I am describing a more socialist society.
Tan Kin Lian
Some people with jobs work long hours, so that they can keep their jobs. In the process, they are depriving other people of the chance to work.
This is a bad capitalist system. It exploits the weak so that the strong can get richer. It creases stress and economic insecurity. It leads to a declining population as many people decide that they cannot afford to raise children.
Is there a better and fairer system? Yes, but we have to think out of the box. To provide the basic needs of every person on earth, there is a certain volume of work to be done. If this volume of work is shared fairly among all the working people, there is no need for anyone to be unemployed or for others to be overworked.
Maybe, each person needs to work only a few hours each day and will have more time for leisure and socialising. They will also have more time to raise a family. If there are more children, there will be more work to take care of and educate the children.
There are advantages for a fairer system of distributing work and rewards - a better quality of life, less stress, more children, happier people. I am describing a more socialist society.
Tan Kin Lian
Morgan Stanley, Moody,S&P must defend fraud claims
NEW YORK (Reuters) - A U.S. federal judge has ruled that Morgan Stanley and two credit rating agencies must defend part of a class-action lawsuit over losses on a fund that collapsed during the credit crisis.
U.S. District Judge Shira Scheindlin on Wednesday rejected efforts by Morgan Stanley, Moody's Corp's Moody's Investors Service and McGraw-Hill Cos' Standard & Poor's to dismiss fraud claims brought by the plaintiffs, Abu Dhabi Commercial Bank and King County in Washington state.
She dismissed the remaining claims against those entities, as well as all claims against Bank of New York Mellon Corp. The judge will allow the plaintiffs to amend their complaint, and set an Oct 1 status conference.
The lawsuit accused the defendants of marketing a complex instrument, the Cheyne Structured Investment Vehicle, as a high-quality investment, but masked the risks.
SIVs once held some $350 billion in assets, but many collapsed. According to its complaint, the Abu Dhabi bank lost its entire investment in the Cheyne vehicle.
The case is Abu Dhabi Commercial Bank v. Morgan Stanley, U.S. District Court, Southern District of New York (Manhattan), No. 08-7508.
U.S. District Judge Shira Scheindlin on Wednesday rejected efforts by Morgan Stanley, Moody's Corp's
She dismissed the remaining claims against those entities, as well as all claims against Bank of New York Mellon Corp
The lawsuit accused the defendants of marketing a complex instrument, the Cheyne Structured Investment Vehicle, as a high-quality investment, but masked the risks.
SIVs once held some $350 billion in assets, but many collapsed. According to its complaint, the Abu Dhabi bank lost its entire investment in the Cheyne vehicle.
The case is Abu Dhabi Commercial Bank v. Morgan Stanley, U.S. District Court, Southern District of New York (Manhattan), No. 08-7508.
Wednesday, September 02, 2009
Cut in bonus
Dear Mr. Tan,
Recently, I received my annual bonus statement on my life policy. I was disappointed with their cut in my bonus from 1.5% to 0.75% (50%).
From what I understand, the premiums are been pooled together in a participating fund and the investment allocation is considered conservative type. When I see this 50% cut,I am wondering am I aboard on a roller coster?
I have received my bonus statements from other companies, but some did not cut my bonuses at all and for others, it was only a minor deduction.
May I know is there anything I can do?
REPLY
You can write to the newspaper or lodge a complaint with MAS. MAS should realise that their governance framework is producing this type of outcome.
Recently, I received my annual bonus statement on my life policy. I was disappointed with their cut in my bonus from 1.5% to 0.75% (50%).
From what I understand, the premiums are been pooled together in a participating fund and the investment allocation is considered conservative type. When I see this 50% cut,I am wondering am I aboard on a roller coster?
I have received my bonus statements from other companies, but some did not cut my bonuses at all and for others, it was only a minor deduction.
May I know is there anything I can do?
REPLY
You can write to the newspaper or lodge a complaint with MAS. MAS should realise that their governance framework is producing this type of outcome.
Rejection from FIDREC
Every few days, I get an email from a credit note investor who asked for my advice and help, after receiving a rejection letter from FIDREC.
Earlier on, there were many opportunities for the investor to get in touch with other investors, to get legal help, to join the class action, to sign the Petition and to attend the Hong Lim gathering. Many of these investors prefer not to be engaged in these activities.
Now, after receiving a rejection letter, they turn to me for help. I am not able to help them at this late stage. There is nothing that can be done now.
I had spent a lot of effort to organise the Petition and the Hong Lim Gathering. I had posted many updates in my blog. I also sent an email to remind the 700 signatories about the Gathering. Only 300 people turned up, which was below expectation and insufficient to create the impact.
Earlier on, there were many opportunities for the investor to get in touch with other investors, to get legal help, to join the class action, to sign the Petition and to attend the Hong Lim gathering. Many of these investors prefer not to be engaged in these activities.
Now, after receiving a rejection letter, they turn to me for help. I am not able to help them at this late stage. There is nothing that can be done now.
I had spent a lot of effort to organise the Petition and the Hong Lim Gathering. I had posted many updates in my blog. I also sent an email to remind the 700 signatories about the Gathering. Only 300 people turned up, which was below expectation and insufficient to create the impact.
Earthquake tremors in Jakarta
I was at an insurance company office in Jakarta. We discussed the underwriting loss for a branch. What was the reason?
The technical director said "earthquake, earthquake". I asked, "which earthquake and how did it caused the loss".
He said, "Can you see the office shaking? There is an earthquake now". We all decided to vacate the office and run down to the ground floor and outside the building.
This was the first time that I experienced an earthquake in my life We learned later that there was an earthquake in West Java, about 250 km from Jakarta, measuring 7.5 richter scale. This caused the tremor to be felt in Jakarta.
The technical director said "earthquake, earthquake". I asked, "which earthquake and how did it caused the loss".
He said, "Can you see the office shaking? There is an earthquake now". We all decided to vacate the office and run down to the ground floor and outside the building.
This was the first time that I experienced an earthquake in my life We learned later that there was an earthquake in West Java, about 250 km from Jakarta, measuring 7.5 richter scale. This caused the tremor to be felt in Jakarta.
An open mind
Many Singaporeans have a closed mind. If they see a suggestion for a change, they will evaluate it and find many reasons why the new way will not work. With this mindset, it is difficult to make any change.
There are some Singaporeans who have an open mind, but this tends to be a minority. To have an open mind, it is necessary to observe the following:
a) Identify and understand the problem. Accept that there is a problem and the need to make a change.
b) Recognise that there are many ways to make a change. Some will not work, but other ways may work.
c) Do not decide based on theory. It is better to try it out and see the results. Even if there are problems, they can be overcomed.
I hope that more people will adopt a positive approach and be ready to make a change, working for a better outcome.
Tan Kin Lian
There are some Singaporeans who have an open mind, but this tends to be a minority. To have an open mind, it is necessary to observe the following:
a) Identify and understand the problem. Accept that there is a problem and the need to make a change.
b) Recognise that there are many ways to make a change. Some will not work, but other ways may work.
c) Do not decide based on theory. It is better to try it out and see the results. Even if there are problems, they can be overcomed.
I hope that more people will adopt a positive approach and be ready to make a change, working for a better outcome.
Tan Kin Lian
Unexpected difficulty in connecting a flight
I faced an unexpected difficulty in connecting a flight from Riyadh to Jeddah. There are some lessons to be learned to avoid this type of problem in the future. Read here.
Population of Jeddah
I asked the hotel staff in Jeddah about the population of the city. They did not know. Most of them were "foreign talents". One told me a figure of 3 million, which seemed rather high.
I checked Google and found the answer here. It is one and a half million. It is the second largest city after Riyadh. Jeddah is on the coast of the Red Sea which separates Arabia from Africa.
I checked Google and found the answer here. It is one and a half million. It is the second largest city after Riyadh. Jeddah is on the coast of the Red Sea which separates Arabia from Africa.
The free market in Singapore
I was given a cake on a low cost flight to Jakarta. The airline probably paid less than $0.50 for this cake. To get the business, the confectionery shop probably had to sell the cake based on the cost of ingredients, labour, rental and (hopefully) a small margin of profit. It must be a lot of effort to make a profit of $0.05 on a cake.
My bank wants to charge me $40 to remit some money to another country. Their real cost is probably $2. The rest is profit for the bank. This is why the bank is able to make a profit of $2 billion a year.
This is the "free market" as is operated in Singapore.
My bank wants to charge me $40 to remit some money to another country. Their real cost is probably $2. The rest is profit for the bank. This is why the bank is able to make a profit of $2 billion a year.
This is the "free market" as is operated in Singapore.
Defamatory messages
One person continues to post defamatory and insulting messages against the agents and current CEO of NTUC Income in this blog. I have blocked a few dozen of these messages, but might have allowed some to go through by mistake. I like to ask this person to stop posting these messages, as it is a burden on me to moderate them.
In the process of rejecting these messages, I have made a mistake in rejecting a few unrelated messages that were intended to be passed. I apologise to their writers for this mistake.
In the process of rejecting these messages, I have made a mistake in rejecting a few unrelated messages that were intended to be passed. I apologise to their writers for this mistake.
Really, who is highfalutin?
Someone used the word "highfalutin" to describe a speech by Mr. Viswa Sadasivan. I have never come across this word before, so I checked the dictionary. It means "pompous or bombastic".
I found nothing bombastic about the speech by Mr. Sadasivan. Guess who is "highfalutin" in choosing to use this unfamiliar word?
I found nothing bombastic about the speech by Mr. Sadasivan. Guess who is "highfalutin" in choosing to use this unfamiliar word?
Tuesday, September 01, 2009
Running the country
Someone criticized me for not providing an alternative solution to the current practice of relying on scholars to run our nation.
I like the system adopted in America. The citizens elect the President based on the platform of policies presented by the candidate to the people. After taking office, the President appoints suitable people to manage the various departments and agencies of the government. These appointees have to be approved by the Congress – whose members were also elected by the people.
This system allows the Present to choose the most suitable candidates from the political, business, community and academic establishments. There is no shortage of talents. The appointees are people who share the President’s visions and strategies, which were also chosen by the people. Most of them are leaders in their own right and are likely to have wide knowledge and experience of their fields.
Critics may argue that the American system does not produce the economic success that is achieved by other models, such as Singapore or China. These critics overlook the fact that economic performance is not the only factor, although it is an important factor, that determines the election of the leaders. This factor has to be balanced against other factors, such as the social policies, quality of life and America’s role in providing security and leadership to the world.
The democratic nature of the American system gets the right balance of policies, that are suitable for the challenges of the time. They are even able to elect an African American to be the President!
A negative factor for the American system is the power of the business lobby. It has led to the wide gap in income and wealth – a factor shared by the Singapore system. I hope that under President Obama and the Democratic control of both houses of Congress, the situation will be changed over the next few years – for the better of America and the world.
The lament of the shortage of talents in Singapore is a product of our Singapore model. We reap what we sow.
There is a workable alternative to the Singapore model of using scholars to run the nation. We should examine if the American system can be adopted here. The small size of Singapore actually makes it easier for the country to be managed. We only need to have an open mind and explore other models.
Tan Kin Lian
I like the system adopted in America. The citizens elect the President based on the platform of policies presented by the candidate to the people. After taking office, the President appoints suitable people to manage the various departments and agencies of the government. These appointees have to be approved by the Congress – whose members were also elected by the people.
This system allows the Present to choose the most suitable candidates from the political, business, community and academic establishments. There is no shortage of talents. The appointees are people who share the President’s visions and strategies, which were also chosen by the people. Most of them are leaders in their own right and are likely to have wide knowledge and experience of their fields.
Critics may argue that the American system does not produce the economic success that is achieved by other models, such as Singapore or China. These critics overlook the fact that economic performance is not the only factor, although it is an important factor, that determines the election of the leaders. This factor has to be balanced against other factors, such as the social policies, quality of life and America’s role in providing security and leadership to the world.
The democratic nature of the American system gets the right balance of policies, that are suitable for the challenges of the time. They are even able to elect an African American to be the President!
A negative factor for the American system is the power of the business lobby. It has led to the wide gap in income and wealth – a factor shared by the Singapore system. I hope that under President Obama and the Democratic control of both houses of Congress, the situation will be changed over the next few years – for the better of America and the world.
The lament of the shortage of talents in Singapore is a product of our Singapore model. We reap what we sow.
There is a workable alternative to the Singapore model of using scholars to run the nation. We should examine if the American system can be adopted here. The small size of Singapore actually makes it easier for the country to be managed. We only need to have an open mind and explore other models.
Tan Kin Lian
Incidents at Changi Airport
I shared two stories about the security clearance at Changi Airport. The multi-million dollar automated system failed this morning. Read here.
Monday, August 31, 2009
Survey results - blogs of political parties
Here are the survey results, based on 33 replies. This is too small, and tends to be biased towards the opposition parties.
Survey: SMU Risk Management & Insurance
I have taught three terms of Risk Management & Insurance (about 100 students). Many of them have graduated and do not use their SMU email address. I like to get in touch with these students. If you were my student, please update your particulars here.
If you are in touch with other students in my past years' classes, please ask them to update their particulars also. Pass the word around.
Negative return from endowment policies
Dear Mr Tan,
Thank you for all your effort at this site and FiSCA (I just became a member). I really appreciate all that you are doing for us consumers.
Recently I have decided to give up 4 endowment policies. I have not actually terminate them but I have informed my agent of my desire. I have held them for 10 years and have another 10-15 years more to go. The current cash value is very low. I would only get back half of what I put in if I were to give them up now. Two policies were meant for my son's education and the other two are for my own savings.
I am thinking of cashing them out now and putting them in other forms of investment that would hopefully give me a better return by the time my son enters college. He is 14 now. I do not have a lot of time left as you can see. What is the best way to grow the money to meet that goal? The policies will only mature when he is 24 and 25. Are the policies worth keeping or are there better options?
I really hope to hear your advise on this.
REPLY
Please read this FAQ. I hope that it will help you to make a better decision.
Thank you for all your effort at this site and FiSCA (I just became a member). I really appreciate all that you are doing for us consumers.
Recently I have decided to give up 4 endowment policies. I have not actually terminate them but I have informed my agent of my desire. I have held them for 10 years and have another 10-15 years more to go. The current cash value is very low. I would only get back half of what I put in if I were to give them up now. Two policies were meant for my son's education and the other two are for my own savings.
I am thinking of cashing them out now and putting them in other forms of investment that would hopefully give me a better return by the time my son enters college. He is 14 now. I do not have a lot of time left as you can see. What is the best way to grow the money to meet that goal? The policies will only mature when he is 24 and 25. Are the policies worth keeping or are there better options?
I really hope to hear your advise on this.
REPLY
Please read this FAQ. I hope that it will help you to make a better decision.
You can also read other FAQs here.
High prices in Singapore
Dear Mr TAN
The prices of electrical and electronic engineering products and falling by the day reflecting the advent of sciences and technology, increasing scale of economy, reducing labour cost from cheap foreign labour, falling cost of capital, intensive competition and the substitution of labour with automation.
But the prices of financial services are rising significantly by the day, despite the advent of information technology, ATM humanless banking, increasing scale of economy, reducing labour cost from cheap foreign labour, falling cost of capital, intensive competition and e-documentation.
Is it NOT cheaper NOW to issue and process a bank draft or money order?
Is it NOT cheaper NOW to issue and maintain an insurance policy?
Also, there is a significant management failure in the efficacy, efficiency, economy of distribution cost in Singapore.
Examples: The exact same box of Nestle ice cream is sold in JB supermart at RM5.05 but it is sold in Singapore supermart at S$5.05. The exact same bottle of Narcissus rice wine is sold in Shenzhen China at RMB5.00 but it is sold in Singapore supermart at S$5.00.
Same Air, Train and Bus return trip tickets are sold in Malaysia at RM but in Singapore at S$.
Why are hawker stores NOT restricted to owner operators and instead, there is an intermediary sub-store landlord to increase the cost of operations. Please advise WHAT and WHERE distribution management had gone WRONG.
Thanks & regards
T E O
The prices of electrical and electronic engineering products and falling by the day reflecting the advent of sciences and technology, increasing scale of economy, reducing labour cost from cheap foreign labour, falling cost of capital, intensive competition and the substitution of labour with automation.
But the prices of financial services are rising significantly by the day, despite the advent of information technology, ATM humanless banking, increasing scale of economy, reducing labour cost from cheap foreign labour, falling cost of capital, intensive competition and e-documentation.
Is it NOT cheaper NOW to issue and process a bank draft or money order?
Is it NOT cheaper NOW to issue and maintain an insurance policy?
Also, there is a significant management failure in the efficacy, efficiency, economy of distribution cost in Singapore.
Examples: The exact same box of Nestle ice cream is sold in JB supermart at RM5.05 but it is sold in Singapore supermart at S$5.05. The exact same bottle of Narcissus rice wine is sold in Shenzhen China at RMB5.00 but it is sold in Singapore supermart at S$5.00.
Same Air, Train and Bus return trip tickets are sold in Malaysia at RM but in Singapore at S$.
Why are hawker stores NOT restricted to owner operators and instead, there is an intermediary sub-store landlord to increase the cost of operations. Please advise WHAT and WHERE distribution management had gone WRONG.
Thanks & regards
T E O
FISCA - Choosing the people
I do not choose the people to join the FISCA committee. They will be elected by the members.
For the protem committee, I only managed to get sufficient people to sign to get FISCA started. Some of them may not wish to be in the limelight.
The FISCA committee will be elected by the members. They will not be chosen by Tan Kin Lian. But I will do my best to encourage people of integrity to step forward. It is difficult to know if someone has integrity, unless one works with that person. More importantly, we should set certain principles for people to abide by.
I hope that members of FISCA knows that they can play a part in building an organisation that is strong, and run by people of integrity. Do not expert other people to carry this burden for you. This burden has to be shared.
For the protem committee, I only managed to get sufficient people to sign to get FISCA started. Some of them may not wish to be in the limelight.
The FISCA committee will be elected by the members. They will not be chosen by Tan Kin Lian. But I will do my best to encourage people of integrity to step forward. It is difficult to know if someone has integrity, unless one works with that person. More importantly, we should set certain principles for people to abide by.
I hope that members of FISCA knows that they can play a part in building an organisation that is strong, and run by people of integrity. Do not expert other people to carry this burden for you. This burden has to be shared.
Sunday, August 30, 2009
Future for cloud companies
Read this report about how work will be done in the future, made possible by the impact of technology.
Telecommuting is a trend for the future
More people are working from home, i.e. telecommuting. It has positive and negative aspects. Find out more here.
Mecca - for Muslims only
I wanted to visit Mecca. My friend said that this not possible. Mecca can only be visited by Muslims. This is posted in large signs along the road to Mecca.
I have a guide book that explains the rites of Hajj, Umrah, Ihram, Tawaf, Sai, etc. It was quite educational.
I have a guide book that explains the rites of Hajj, Umrah, Ihram, Tawaf, Sai, etc. It was quite educational.
Shopping in Jeddah at midnight
I went to the Balad (old town) at midnight. The roads are congested. Many people travelled at night in Jeddah. Night becomes like day in the hot summer.
The streets at Balad is busy and crowded. I enjoyed the architecture of the old buildings. The windows are constructed with thin strips of wood allowing the women to look out into the streets, without being seen. My friend said that the roads in Cairo Egypt also have similar structures.
I left the souk (market) close to 2 AM. That is the time that most shops close in Jeddah during Ramadan.
The streets at Balad is busy and crowded. I enjoyed the architecture of the old buildings. The windows are constructed with thin strips of wood allowing the women to look out into the streets, without being seen. My friend said that the roads in Cairo Egypt also have similar structures.
I left the souk (market) close to 2 AM. That is the time that most shops close in Jeddah during Ramadan.
FISCA Committee
Someone expressed the concern that the FISCA committee may include people working for the banks. He had his money burnt through the Mini-bond and does not trust people anymore (including FISCA).
There is no need for this worry. The people from the banks will not be interested to sit in the FISCA committee. Even if they personally support the aims of FISCA, they will not dare to be involved (for the sake of their jobs). Similarly, most financial advisers are not likely to support or be involved with FISCA.
At present, we only have a protem committee in FISCA, and some of these members do not wish to be in the limelight. This is a temporary situation. FISCA will have to call an election. The profile of the elected Committee members will be put up in the website after the election.
FISCA will have the other challenge. How to get the financial experts to be involved in the work. Do not think that all this information can drop easily from the sky. Consumers should support FISCA now, if they do not wish to see their money burnt again in the future.
Tan Kin Lian
There is no need for this worry. The people from the banks will not be interested to sit in the FISCA committee. Even if they personally support the aims of FISCA, they will not dare to be involved (for the sake of their jobs). Similarly, most financial advisers are not likely to support or be involved with FISCA.
At present, we only have a protem committee in FISCA, and some of these members do not wish to be in the limelight. This is a temporary situation. FISCA will have to call an election. The profile of the elected Committee members will be put up in the website after the election.
FISCA will have the other challenge. How to get the financial experts to be involved in the work. Do not think that all this information can drop easily from the sky. Consumers should support FISCA now, if they do not wish to see their money burnt again in the future.
Tan Kin Lian
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