Difficulty with Open Net

I had a lot of difficulty with Open Net. A few months ago, they sent me a letter asking to arrange for installation of Open Net in my home. I responded.

Their engineers were not able to install the line. There was some problem that involved the PUB. I do not understand what the problem was. The matter was not attended for four months.

This morning, I called the hotline of Open Net to find out the status. I made many calls over two hours. Their automated system keeps saying "all our lines are busy". Busy - the whole morning? No indication on when they are able to take my call? I wonder if they really have any staff answering the phone calls!

This type of bad service is quite common with many organisations in Singapore - government agencies and businesses. I suspect that they created so much hassle with their regulations and procedures that they staff are not able to cope with the calls for assistance.

Let me relate my experience with a telco in Cambodia. They may be less advanced in their infrastructure, but they have much better service on their call centers. When I was placed on hold, the message was ... "you are placed 5th in the queue". This keeps reducing on each announcement. I did not have to wait long to be served.

How an expatriate avoided mis-selling by his bank

Dear Mr. Tan,

Soon after I moved to Singapore I was offered an investment product from one of the world’s largest banks. It purported to guarantee me a return about four times higher than the then interest rate on deposits. I asked what the risk was and how the product worked; clearly there was risk – the bank was not going to pay me all that return for nothing. The bank representative was totally unable to explain the product or the risk and just ended up saying “well a lot of my customers bought it and they never asked me questions like you do”!! All I can say is more fool them if they bought without understanding. It was a gamble by the way on the movements between two currencies. As for the Bank..well to be mis-selling in this age of increased regulation and supposed consumer protection is indeed staggering.

Golden rules. If you don’t understand the product; don’t buy. If salespeople cannot explain a product in simple, clear language, devoid of jargon, then they don’t understand it; don’t buy. If it sounds too good to be true; don’t buy.

Anthony Hobrow
Direct Asia

Blind adherence to rules

I am worried about several negative aspects of the Singapore mindset. One is the blind adherence to rules. We follow rules blindly and are not prepared to make exceptions, even when the consequence is negligible and helps to remove stress for other people.

Recently, I have to make the final payment for the purchase of my office. I have to apply for a cashier order (i.e. the vendor's lawyer will not accept my company's cheque). I also have to visit my lawyer's office with the company stamp and with the secretary to sign the documents in front of the lawyer. Why are all these requirements necessary? The roads were congested and there were insufficient parking space in the lawyer's office - so this requirement adds to the hassle and the cost.

The lawyer's assistant checked the cashier order thoroughly and found that the amount was short by 2 cents. Sorry, the cashier order cannot be accepted. She called the lawyer for the vendor who said that the amount has to be exact. I was asked to apply for another cashier order and to make another appointment to finalise the formalities. I lost my temper.

Finally, they agreed to take my 10 cents in coin to make up the difference. This will save me the cost of another cashier order (I don't know how much I am being fleeced) and a lot of money and hassle to make another trip.

I have seen so many examples of blind adherence to rules in Singapore. I am worried for the future of our country.

Playing with fire

Banks are supposed to do an honest business by taking money from depositors and lending them to businesses at a higher interest rate and to make profits from the spread in interest rate, less the operating expenses. To make profit, they have to work hard, provide good service to their customers, work efficiently and earn an honest profit.

But, the banks found an easier way to make super profits. During an economic slowdown, when savers are risk averse and accept negligible interest rate, the banks used the money to speculate in all types of asset classes - housing, forex and government debts. It seemed so easy to make money, especially on government debt which was considered to be "safe". They can make a good margin on lending money to the government to earn a high interest rate - better than the money lent to businesses.

But,governments can become insolvent. We now have a situation where the government of several European countries are not able to repay their debts and found it difficult to refinance their short term borrowings. This is the crisis in Greece and possibly Italy. When these governments cannot repay their debts, the European banks that bought their debts get into financial difficulty, causing a potential banking crisis.

http://financialedge.investopedia.com/financial-edge/1111/How-PIIGS-Defaults-Could-Affect-The-Markets.aspx?partner=ntu11#ixzz1dFm08zM8DISCLAIMER:

Banks should be required to go back to their traditional business of handling payments and giving loans to small businesses. They should not be speculators in asset classes, including government debts. These asset classes should be invested by mutual funds.

Bright Sudoku - qualify to be a Sudoka master

Do you qualify to be a Sudoku master? You can practice Sudoku and move up the grades, starting from white belt up to black belt (grade 7) and finally red belt (grade 8). This app available now on the Nokia platform and will soon be available on the Apple platform (iPhone & iPad). Watch this video:
http://www.youtube.com/watch?v=BHCU9YfYkCE

Getting people to enrol for Forex training course

Dear Mr. Tan,
I heard from a friend who went his preview about how X (a forex trainer) slashed and reduced course price to attract people to join his course. My friend felt X was treating the audience like clowns. He mentioned X slashed the price until around $300. While everyone was running to the back to sign up, he then finish writing $300 per month, and not just $300.


I have attended other seminars before and I think it is normal, but not to the extent of not finish writing to somehow cheat people. Most people would just state their actual course fee was (example) $20k, slashed to $10k, $5k, eventually $2.5k to make people think they are having great deals (not just Forex).


Regarding the (named removed) website, I saw people complaining about him writing $X amount per month installment which added up to be more than the course fees. I believe it was 0% interest just like most schools are doing now. After searching around online for feedbacks, I felt many people are complaining about him that he is more of a motivational speaker and sales person than a trainer. I watched some videos of his and I felt too.


Hopefully people could be more caution before signing up for courses.

Staged accidents

A staged accident is created by a syndicate involving a criminal workshop. The workshop boss arranged for an accomplice to drive on the expressway and brake suddenly, causing the following vehicle to crash into its rear. Another accomplice will appear quickly with a tow truck to bring the accident vehicles for repair. This will be followed by a big repair bill for the vehicle in front (which belonged to the syndicate).

This type of staged accidents had been happening for many years, but nobody bothered to take any action. One day, the driver of the following vehicle was the son or a prominent politician. He related the matter to his father who brought up the matter to the authority. This caused the authority to take action. For the next few days, there were big stories in the media and the term "staged accidents" was coined. There was a furor, because this was considered to be reckless driving.

This happened in a certain country about 10 years ago. Guess the name of this country, where nobody takes action until it involves an important person's family member?

Re-admission to Universal Studio

The rules of Universal Studio Singapore said that "for same day admission, you must present the Studio admission ticket and hand stamp for re-entry".

I recall visiting the theme parks in America where they recognize the hand stamp (or similar tags). They do not require the admission ticket to be shown as well. I wonder if this reflects the peculiar  requirements in Singapore - where it is usual to add to the hassle for customers?

Benchmark for housing prices

An American told me that 30 years ago, the banks will give a mortgage to the borrower to buy a house for not more 3 years of the income of the breadwinner (and the income of the working spouse is disregarded). The bank also required the borrower to make a down-payment of 10% for the house.

If this rule is applied in Singapore today, the average price of a 4 room HDB flat should be $120,000 (assuming an average income of the breadwinner to be $40,000).

The price of HDB flat that is being charged is about 3 times of this benchmark - and a 4 room HDB flat is considered to be quite modest, compared to a typical house with a land in America. (See http://en.wikipedia.org/wiki/Public_housing_in_Singapore)

This shows how costly are HDB flats in Singapore - and they are considered as "public housing". No wonder, both parents have to work and they still do not have enough money for retirement. The housing is far too expensive.

HDB flats are getting smaller and more expensive

This is an interesting perspective told by Lucky Tan

http://singaporemind.blogspot.com/2011/11/smaller-flats-doesnt-mean-lower-quality.html

MF Global Singapore clients

Mr Tan,

Your reader might be interested in this news.

http://www.themalaysianinsider.com/business/article/nearly-half-of-mf-global-singapore-client-monies-held-abroad/

 SK

My views
It is better for Singapore investors to keep their accounts with local brokerages, rather than foreign brokerages, due to this type of problem. The local brokerages are more likely to keep their money in Singapore. Even though the client's monies are kept outside Singapore, I believe that they belong to the clients and should be returned to the liquidators on demand. I don' think that the foreign banks or other institutions have the right to reject the request of the liquidators to return the monies. But, it seems that international finance is getting very complicated and risky.

Role of government in regulation

I read this interesting story about the problems faced by the regulators on regulating neutrality on the Internet http://tech.fortune.cnn.com/2011/11/11/what-next-for-net-neutrality/?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29

It is clear that there is a need for a neutral party, i.e. the regulator, to set the rules to ensure a level playing field for all the parties, and for consumers to have access to unbiased information. But the big businesses are challenging the role of the regulators, using their lobbyists and lawyers and will bring the matter up to the Federal Courts.

America has clearly gone too far down the road in letting the businesses have their way. Their economy is collapsing, and is now being propped up by massive debts. It is likely to lead to dire consequences.

The US government has failed to govern. I am worried that Singapore may be in a similar situation.

Danger to the world economy when growth stalls

Quote from Mohd El-Erian of Pimco, manager of the world's largest bond fund.


"The concept of stall speed is not something that's familiar to the markets," he said. "That's what I find is terrifying. We can talk about the probability of recession when unemployment is already too high, when the financial deficit is 9 percent of (gross domestic product), when interest rates are already at zero percent and when a quarter of the homeowners are already underwater on their mortgages. That is a terrifying concept. That is why everything must be done to avoid a slowdown in growth."


http://www.cnbc.com//id/45253864

Interest rate on bank deposits

Which bank offers the best interest rate on fixed deposits in Singapore? The lowest interest rate for 12 month deposit is 0.075% (less than 0.1%) and the highest is 0.625% (less than 1%).
Find out from FISCA website, http://easyapps.sg/assn/Org/Information.aspx?id=5

Should you invest in foreign currency to earn a higher interest rate? Here are the tips. Remember to consider the cost of coversion from Singapore dollar to the foreign currency and converting back. After considering this cost, and considering that the interest rate is so low, it is not worth investing in foreign currency. Read this:
http://tankinlian.com/Admin/File.aspx?id=91&PK=49eface4e1da102d8bb0a4b0889554e4

Managing your retirement savings

This article give a useful explanation on how to manage your retirement savings and point out to some financial calculators on the Internet that you can use.

http://money.cnn.com/2011/11/10/pf/expert/retirement_withdrawal_strategies/index.htm?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29

Occupy Wall Street - the issues

1. "#OWS is fighting back against the corrosive power of major banks and multinational corporations over the democratic process, and the role of Wall Street in creating an economic collapse that has caused the greatest recession in generations." It goes on: "The movement is inspired by popular uprisings in Egypt and Tunisia, and aims to expose how the richest 1% of people are writing the rules of an unfair global economy that is foreclosing on our future."


2. Our current capital markets are structured around a dangerous lie -- that the sole function of the corporation is to return value to shareholders. Under this construct, every action undertaken by Wall Street traders, mortgage brokers and the rest make perfect sense and are morally unambiguous. It was their job to sell as much as they could, to grab as much value as possible, in order to return that value to shareholders. So long as shareholder-value-maximization remains our governing principle, no change in regulations will change the fundamental behavior. Executives are simply acting according to their incentives.


http://management.fortune.cnn.com/2011/11/09/what-occupy-wall-street-got-right/?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29

Itialy is too big to bail

The problem for Italy and the global financial system is serious.

http://money.cnn.com/2011/11/09/news/international/italy_crisis_bail/index.htm?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29

IMF chief - world risk "lost decade"

Quote: "Our sense is that if we do not act boldly and if we do not act together, the economy around the world runs the risk of downward spiral of uncertainty, financial instability and potential collapse of global demand... we could run the risk of what some commentators are already calling the lost decade." 


http://www.cnbc.com//id/45217763

Instant Photos

I need 2 color photos for a visa application. I went to the instant photo booth at SMU. The charge was $8. It seemed to be rather high. I wonder how the students could afford it. It seemed to be more costly that I had expected.

Americans move accounts to credit unions

Many Americans are unhappy with recent increase in bank fees that they move their accounts to credit unions.

http://money.cnn.com/2011/11/08/pf/credit_union_switch/index.htm?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29

Here are some of the reasons:

http://money.cnn.com/galleries/2011/pf/1111/gallery.move_your_money/index.html?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29

High prices in Singapore

I went to the Challenger Store to look a laser presentation remote device. They should me a few Targus models costing more than $120 each. This was rather expensive, as my friend told me that he bought a device for less than $30 in Sim Lim Square.

I went online to search for this item. A few Targus controllers were offered at Amazon store at around USD 50 (excluding shipping). This seemed to be at about half of the price charged by Challenger. I finally decided to buy another brand and paid less than $20 including delivery charges.

This episode seems to show that prices are really expensive in Singapore! It must be due to the high rental and staff cost.

Forex trading - developing the skill

Here are some tips on how you can develop your skills in forex trading, without having to pay high fees to attend a course. It also warns you that trading is like gambling, similar to visiting a casino. But it can be fun.

http://tankinlian.com/admin/file.aspx?id=594&PK=576c64ff5af6102f8aebde1ae83d78a1

Settlement without admitting wrong-doing

If big banks get to settle with the SEC without admitting or denying any wrongdoing, what good does a settlement do in the end?

By Eleanor Bloxham, CEO of The Value Alliance and Corporate Governance Alliance

FORTUNE -- To admit or deny -- that is the question -- or one of them anyway, that the SEC will have to address when they respond to Judge Jed S. Rakoff's review of the regulator's recent settlement with Citigroup. Although Citi has agreed to pay $285 million and make minor reforms, the bank is neither admitting nor denying that they failed to properly disclose the risks of mortgage-related investments to clients in the run up to the housing crisis.

http://management.fortune.cnn.com/2011/11/07/big-bank-sec-settlements-toothless-face-savers/?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29

My comment: At least this is one step better than Singapore, where wrong doings go unchallenged - due to lack of regulatory action.

Warren Buffet and stocks

Warren Buffet is confident about investing in US stocks during the current global uncertainty. He takes a long term perspective.

http://money.cnn.com/2011/11/07/markets/buffett_stocks/index.htm?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29

Here is the fundamental to back his optimism. Profit of companies are at a record level.

http://www.cnbc.com//id/45195111

Customers move to credit unions

Quote:

NEW YORK (CNNMoney) -- Credit unions and small banks say they've seen big jumps in new account openings thanks to this weekend's "Move Your Money" and "Bank Transfer Day" initiatives, but do the big banks even care?

Digital Federal Credit Union, the largest credit union in New England with 330,000 total members, welcomed 133 new members on Saturday. That's 56% higher than the average 85 account openings it sees on a typical Saturday.

http://money.cnn.com/2011/11/07/pf/move_your_money_day/index.htm?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29

Note: Credit unions are member based organisations, like the cooperative societies in Singapore, that provide basic services to members, including savings and loans.

Scam - Delivery of Gifts

This is a new scam in Singapore, involving delivery of gifts.
http://tankinlian.com/admin/file.aspx?id=593

Big increase in suicides?

I received a regular e-mail on suicide cases. It seems that there is a big increase in suicides in Singapore - Bedok Reservoir, MRT tracks, fall from HDB flats. This is suspected to be linked to gambling losses at the casino. 

Reduce cost through contract employees

Government employees are now being put on contract at half of the usual wages in the USA. The government has to take this measure to cut the budget deficit, because they are not able to collect sufficient taxes to pay the employees adequately. In other places, these measures are taken to reduce cost, but it is a form of exploitation of workers. The contract workers barely earn enough to pay their bills.

http://www.cnbc.com//id/45187246

After the Fall

Watch this video
http://www.youtube.com/watch?v=xigkb7Cg3kg

Kin Lian the link between Pinnacle, High Notes cases

Published in the Business Times. I hope that the top management of DBS reads the Business Times and decide to be magnanimous.

By GRACE LEONG(SINGAPORE) Two court rulings issued this week - one in Singapore and the other in New York involving Singapore investors of DBS High Notes 5 and Morgan Stanley's Pinnacle Notes respectively - couldn't have turned out more differently.But they have one thing in common - former presidential hopeful Tan Kin Lian. He was among those providing advice to investors affected by the bankruptcy of US investment giant Lehman Brothers, and organised petitions to the government to investigate possible wrongdoings by local banks in the sale and marketing of Lehman- linked products such as High Notes, Pinnacle Notes and Minibonds.He said that the Pinnacle Notes ruling highlighted the difference in legal recourse available to investors in Singapore and America.'In the US, a lawyer can bring cases under a 'success fee' arrangement, where the investors do not have to bear any legal cost, if they do not succeed in the case. The lawyer takes on such cases after studying the chances of success for the effort, time and expense he makes in undertaking the case. But it gives the small people a chance to seek redress.'So far, the Pinnacle Notes investors have not had to cough up a single cent in bringing the case against Morgan Stanley and its affiliates in New York. And even if they lost the case, they're not liable for the defendants' legal costs.But that's not the case for DBS High Notes 5 investors, who lost their appeal against the High Court's decision that the Singapore bank owes them nothing.'The investors already lost all of their investments. They now have to bear their legal expenses and, possibly, the expenses of the DBS lawyer,' Mr Tan said.The DBS investors, who collectively lost $18 million when the structured product failed with the Lehman Brothers' collapse in 2008, had sued the bank, arguing that the DBS High Notes 5 were void at the time they were issued.But the Singapore Court of Appeal, in a judgment this week, ruled: 'A person who signs a contract which is set out in a language he is not familiar with or whose terms he may not understand is nonetheless bound by the terms of that contract.'In contrast, the US federal court hearing the Pinnacle matter observed that warnings in offer documents do not always provide immunity.'While there is little doubt that the cautionary language warned plaintiffs that (Pinnacle) Notes carried some risk, it is inadequate to have put the reasonable investor on notice of the alleged fraud,' US District Judge Leonard Sand ruled.That finding is pivotal because it allows the issue to be examined at trial of whether issuers and arrangers of such products should have legal immunity through 'generalised warnings of risk' buried in many investment products.Now that the Court of Appeal has ruled, Mr Tan said that it would be a 'a good time for DBS to be compassionate and magnanimous in undertaking to bear the legal cost of both sides, so that their customers do not have to bear any further loss'.

Story of Singapore, Hong Kong and USA

This is an interesting account of how retail investors are protected, or not protected in Singapore, Hong Kong and USA. It is a sad account for the investors in the DBS High Notes 5.
http://singaporemind.blogspot.com/2011/11/video-clip-from-meltdown.html

Strange rules

Singapore has many strange rules to determine who qualifies for certain benefits. Here is an example about the income ceiling that qualifies for a BTO (built-to-order) or subsidised HDB flat.
http://theonlinecitizen.com/2011/11/bto-flat-income-ceiling-rules-why-include-commissions-but-exclude-bonuses/

This type of rules apply to many other areas, such as means-testing, access to welfare assistance, etc. This is what life is like in Singapore:

• Convoluted
• Wasteful in spending time in rationalizing and managing these complexities 
• Creating a selfish and self-centered people, fighting for their self interest.

A better system is to manage the economic and social life so that the wages are in line with the cost of housing and cost of living, so that all these convoluted rules are not required.

Banks selling off bad loans

This is an interesting investment for cash waiting to be invested, to buy off the bad loans from banks at a hefty discount. However, the problem is in finding the right honest manager to manage the funds that are invested in these bad loans. It could be a solution to the mess involving the bad mortgage loans on properties that have now fallen in value.

http://finance.fortune.cnn.com/2011/11/04/bank-bad-loans/?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29

Honest way to get rich

There is an honest way to get rich - an example shown by Steve Jobs. He is highly respected, even by the 99 percenters. Read this:

http://tech.fortune.cnn.com/2011/11/06/the-tea-party-occupy-wall-street-and-steve-jobs/?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29

Another well respected man is Warren Buffett. He is the among the few multi-billionaire that stick with President Barack Obama during his difficult time as President.

Revenue of telephone companies

Telephone companies are getting less revenue from voice service, and are relying more on data services for their revenue and profit.

http://tech.fortune.cnn.com/2011/11/04/telecoms-big-hang-up/?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29

FISCA Financial Planning Workshop - 26 Nov 2011

The next workshop will be held on 26 Nov 2011. Please register early.
http://easyapps.sg/assn/Org/Event.aspx?id=5

Investing and speculating

The Sunday Times carried a story about young people who were investing in stocks and CFD (contract for differences). Some made trading losses but are still keen to continue "investing" in the market.

It is important to use the correct term to describe the activity. It should be called "trading" or "speculating" and not "investing".

When one "invest" in a company, one has to study the fundamentals of the company with the intention of holding it for many years to earn its dividend and the long term capital gain. I  know of people who bought blue chip shares and kept them for 40 years. That is "investing".

Those who buy and sell shares to make a short term gain should be called "speculators" or "traders" and not "investors". There is nothing wrong with speculating or trading in shares, or gambling in the casino, if the speculator is aware about the risk and is mentally prepared for the consequence of making a loss, while pursuing a gain. It would be wrong to be deluding that they are "investing" in the stock market.

I hope that our financial journalists will use the correct term to describe the activity, so that the speculators are not deluded into thinking that they are carrying out an "investing" activity.

Capitalism is in crisis

Many people still think that capitalism is a good economic model. The truth is - it is the cause of many of the bad things that are happening around the world - greed, cheating, high cost of living, stress, low birth rate, crime. Read this article to get a similar view:

http://english.aljazeera.net/indepth/opinion/2011/11/201111191022862285.html

QUOTE:

The economic system underlying empire-building today has a name: capitalism. Or, more precisely, a predatory corporate capitalism that is inconsistent with basic human values. This description sounds odd in the US, where so many assume that capitalism is not simply the best among competing economic systems but the only sane and rational way to organise an economy in the contemporary world.
Although the financial crisis that began in 2008 has scared many people, it has not always led to questioning the nature of the system.

"Although the financial crisis ... scared many people, it has not always led to questioning the nature of the system."

That means that the first task is to define capitalism. It is an economic system in which:

• Property, including capital assets, is owned and controlled by private persons;

• Most people must rent their labour power for money wages to survive; and

• The prices of most goods and services are allocated by markets.

"Industrial capitalism", made possible by sweeping technological changes and imperial concentrations of capital, was marked by the development of the factory system and greater labour specialisation. The term "finance capitalism" is often used to mark a shift to a system in which the accumulation of profits in a financial system becomes dominant over the production processes.
Today in the United States, most people understand capitalism in the context of mass consumption - access to unprecedented levels of goods and services. In such a world, everything and everyone is a commodity in the market.
In the dominant ideology of market fundamentalism, it's assumed that the most extensive use of markets possible, along with privatisation of many publicly owned assets and the shrinking of public services, will unleash maximal competition and result in the greatest good - and all this is inherently just, no matter what the results.
If such a system creates a world in which most people live in poverty, that is taken not as evidence of a problem with market fundamentalism but evidence that fundamentalist principles have not been imposed with sufficient vigour; it is an article of faith that the "invisible hand" of the market always provides the preferred result, no matter how awful the consequences may be for real people.
How to critique capitalism in such a society? We can start by pointing out that capitalism is fundamentally inhuman, anti-democratic and unsustainable:

Calculation of interest rate

Courts advertised a 42" HD LED TV for a cash price of $799 and gives an option to pay in weekly installments of $7.91 over 48 months. What rate of interest is included in this plan? Do you calculation and check your answer here. http://tankinlian.com/Redirect.aspx?PK=a2b03a8458f4102f8aebde1ae83d78a1

Interest rate on installment payments

This article shows how to calculate the interest rate on installment payments, and how to save on the heavy interest charges. It is advisable for those who buy expensive items on installment payments, especially young people, to realize the heavy cost of this payment plan. The interest rate has increased from 36% previously to 48% per annum now. It is quite expensive!


http://tankinlian.com/admin/file.aspx?id=592&PK=0e53cd3c5970102f8aebde1ae83d78a1

Unemployment benefit in USA

This article gives a good explanation of the system of unemployment benefits in the USA. The benefit is given for a short period, to help the unemployed people to tide over a short period so that they can find the next job. This usually works well, except in a prolonged recession (which is happening now). Apart from helping to relieve hardship, the unemployment benefits help to spur economic growth. The question that the USA has to face is how to cope with the prolonged recession. President Obama wants to extend the unemployment benefit, but needs Congress to approve the additional funding (as the US debt is already too high!).

http://www.cnbc.com//id/45174237

I vow to thee my country

A stirring and patriotic song.
http://www.youtube.com/watch?v=aaYsapDNrFw&feature=related
http://www.youtube.com/watch?v=KHh8isGtB6w&feature=related

Here is a version with spoken words

http://www.youtube.com/watch?v=HMNlnryrVtc

Lyrics and history
http://tankinlian.com/admin/file.aspx?id=585

Negative comments about Forex Schools

Dear Mr. Tan,
There are many negative comments about various Forex schools in Singapore. Some could be fake, some could be real. Whatever it is, government won't do anything base on rumours I suppose, unless many students lodge complaints like Clement Chiang's case.

But I believe something can be done:
1. Stop all the schools who claim themselves to be number 1, especially in their official website. Example of such schools are JF Lennon and Powerup Capital. How do they even gauge themselves to be number 1? It is dangerous for the public.

2. Warn Powerup Capital to remove their 100% accuracy claim in their website as there is no such thing as 100% in financial market isn't it?

3. Forex trainers to undergo exams and certify to teach. A person who prescribe medicine without being a certified doctor could be dangerous.

4. Forex trainers to produce their own live trading results for a period of time before getting the certificate as well.

5. Probably all the students who sign up for any course, are needed to send feedback to the MAS or whoever just after the course, being reminded by the trainers. One of the questionnaires could be "Did the trainer state all the possible risk". Probably the second feedback is needed after some time as well because students need to try out the things taught for a period of time.

6. If the trainer tells the audience that his student make $10,000 from $2000 after 3 months for example, then he should get a print screen of the real live statement. The name of the student should be there. The account number can be blackened. So as not to have empty talk and cheat the people. They must also claim that not all students could get this result.

I am sharing these because you may have the influence or power to help eliminate any possible bad practices.


Please read the comments posted here:
http://www.forexdna.com/education_revInfo.php?id=44

Bhutan teacher reply to Singapore Minister

This article is being circulated by e-mail and purported to be written by a Bhutan teacher in reply to remarks by Minister Khaw Boon Wan.

http://www.tankinlian.com/Redirect.aspx?PK=bd767f8d58f6102f8aebde1ae83d78a1 

Legal action on Pinnacle Notes

The US lawyer has crossed one major hurdle in getting the legal action on the Pinnacle Notes being heard in the court in New York. Here is an explanation about the legal action and the time expected for the case to be settled.  http://www.tankinlian.com/Admin/NewInformation.aspx?pk=a2b03a8458f4102f8aebde1ae83d78a1 

Discrimination against Singaporeans

Dear Sir,
Kindly see the these links and read the content.
http://theonlinecitizen.com/2011/11/system-makes-it-easy-to-hire-foreigners-at-expense-of-locals/
http://sg.news.yahoo.com/don-t-hire--promote-at-expense-of-s-poreans--govt-to-foreign-managers.html


I think the MOM is not doing enough and I believe this time round many PMETs are waiting for someone to come out and help speak for us. Perhaps we need to bring out to the open those Foul Practises and FT HRs that are doing these bad things to Singaporean.

REPLY

Please approach Gibert Goh who is organising this effort through his website: http://www.transitioning.org/.

More importantly, you should round up many people to support Gilbert Goh'S efforts, as he needs funding, resources and other kinds of help.

Bhutan and Singapore

Here is how Quitter (Wing Lee) view this matter:
https://mail.google.com/mail/?ui=2&ik=f1f8b591ea&view=att&th=1336e65f1600b0fd&attid=0.1&disp=inline&realattid=f_gul47b4x0&zw

My observation.
When the beloved King of Bhutan recently married, the whole country rejoiced. Singapore should learn from Bhutan, rather than pass negative comments about Bhutan. Read this article and see the 1,000 over comments.
http://news.yahoo.com/king-bhutan-marries-commoner-bride-040837856.html

Life insurance and financial planning for a young family

I wish to share this important tips for every young family, and for young people who will be started a family a few years later. It can make a lot of difference to your financial well being - more important than the time that you spend to learn the subjects to get a degree.


http://tankinlian.com/admin/file.aspx?id=589&PK=5992645d58d5102f8aebde1ae83d78a1

Online processes of Government ministries

The online processes of several Government ministries are terrible - they make life difficult for the public. I have bad experience with the Ministry of Manpower in respect of getting work passes and making CPF top-ups. My friend told me that he had a lot of trouble in submitting an application to work as a relief teacher in the Ministry of Education website.

I have submitted several feedback to the Ministry of Manpower giving details of the difficulty faced by me. They give me a polite reply each time, but do not really address the root of the problem - the online process make life very difficult for the public. Instead of improving national productivity, they make things worse. The ministry save 1 hour, but the public has to spend (say) 5 hours.

In many cases, the process are so complicated that the public has to call the helpline. After a while, many of these helplines (especially from the Ministry of Manpower) do not respond (i.e. cannot get through). I can understand the difficulty of these helpline operators. They are deluged with so many questions from the public seeking help.

The underlying problem is the complicated process. They are designed to save time for the government ministry, and they add to the overall waste of national resources. I hope that someone from the Ministry of Finance, who is supposed to drive national productivity, will respond to me (kinlian@gmail.com). My feedback to them in the past were also not attended with seriousness.

Investing in stock in a volatile environment

Should a young person invest hard earned savings in stocks in a volatile environment? The answer can be found here: http://money.cnn.com/2011/11/04/pf/expert/young_investors/index.htm?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29

I agree with the advice that money for the long term, e.g. for retirement, should be invested in stocks and that money needed for the short term, e.g. to make down payment for a home or other specific purpose, should be invested in a secure asset, such as an insured bank account.

Upgrade Medishield for elderly?

Hi Mr Tan Kin Lian ,

I hope you can advise me on this Medishield upgrade . Presently my wife and i are both 59 years and on basic 

Medishield . I am wondering whether it is better to upgrade and even buy riders to cover the deductibles and co-insurance .  I am thinking not so much about a better bed in the hospital but whether the present basic Medishield is adequate enough to cover major illnesses . Another worry is the annual limit to medical claims for basic Medishield  and  also riders are paid in cash .

REPLY

Please read my views on Medishield in these many articles. After that, you have to make your own decision.

http://tankinlian.com/Information.aspx?q=medishield

NOTE: Consumers should attend the talks on Financial Planning and Life Insurance organised by FISCA. More details can be found at http://easyapps.sg/assn/Org/Event.aspx?id=5. (The last talk on Life Insurance was cancelled due to lack of response.)  Consumers should attend these talks and be educated, rather than expect to get free advise to their specific questions - as they may end up being conned by dishonest advisers.

It is all right to get rich in an honest way, but it is now quite common for people to get rich by being dishonest and they get away with it.

Most Americans don't begrudge great riches to anybody who works hard, takes real risks, and creates things of value. As evidenced by the positive outpouring for Steve Jobs, great entrepreneurs are still celebrated. But there is an implicit social contract that links rewards to effort and accomplishment. If many people now believe that corporate America has violated that contract, is it surprising? At many big corporations, the senior managers have seemed more interested in stuffing their pockets than building for the long term. Gargantuan pay packages are only the start of it. Think boards of directors packed with patsies, books cooked to juice earnings, potential whistleblowers silenced, golden parachutes, and finally taxpayers obliged to save expensively tanned hides. The thing that is really surprising is that it has taken this long for public anger to well up.

http://finance.fortune.cnn.com/2011/11/04/one-percent-wake-up-call/?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29

Good experience with Forex Training Course

Many people had bad experience with forex training courses. They paid a high fee to get the training and lost money  in the trading activities (as the methods are not reliable). Here is an exception. This student still lost money, but he felt that the training provided was worth the money spent:

Dear Mr Tan,It would be my pleasure to share my experience with you.
Let me tell you upfront that I am not yet profitable trading forex.  Please allow me to explain why I was still happy with the course.
I took up the forex training course with X in December 2010.  At that time, I was retrenched for about 3 months and was unsuccessful in finding a new job.  With time on my hands and not knowing what else to do, I attended a few forex sales seminars and eventually signed up with X.  I paid about $3000 upfront for the course.
Before I signed up, I had already educated myself on forex trading.  I was aware that there were forex training providers who created the impression that forex was easy money.  X was honest about what forex trading was really about.  This convinced me to sign up.
The course started with 2 days of classroom training over the weekend.  This covered the theoretical knowledge needed to trade forex.  After the classroom sessions, students are entitled to attend regular tutorial sessions for 1 year.  The tutorial sessions were officially on the evenings of Mondays and Wednesdays.  During each session, the Chief Trainer Y would conduct an analysis of one or more currency pairs to demonstrate how he applied his techniques and then pointed out potential trades.  This would be followed by hands on session during which students learn to apply the techniques on their demo accounts while Y would go around answering questions. For those who have the time, X was open daily for students to go in and trade with other traders. Y would conduct two analysis for the students; once before London session opened and once before NY session.  As I did not have a job, I went in daily, from afternoon until night.  During these sessions, Y would analyse a currency pair and point out potential trades.  I found out over time that most of his trade calls were good and resulted in profitable trades.  However, it was a different matter when I did my own analysis and took my own trades.  Most of my trades turned out to be losers.  Faced with Y's successful trades and my own unsuccessful trades, it became obvious to me that it was not the technique but the trader that was the problem. I spent practically all my weekdays at X until I found a job in June.  When I was there, I found Y to be genuine about helping his students.  I was using air-con, Internet and electricity for free.   Although I could not go into X anymore because of work, I still joined the Wednesday sessions via webex meetings.  This was something additional that Y provided.  I didn't have to pay a single cent after that initial $3000 payment.  In fact, I wondered if he could be profitable like this. When I saw your online survey on forex and a comment that all forex courses are overpriced and useless, I knew where you were going with this.  You probably heard feedback from unhappy people who felt that they were cheated by forex schools.  Hence, I felt I should provide a balanced view.  There are indeed forex schools that use questionable tactics to sign up students but there are genuine ones too. Evaluating whether a forex course is good based on trading results can be tricky.  This is because forex trading techniques are easy to learn but it takes time and experience to learn how to apply them correctly.  It takes time, discipline and effort and is not a get rich quick scheme.  Like in any business, only a small percentage eventually master the skill to become successful. I personally found that it is quite safe to trade forex.  I am still working on my forex trading skills.  I have heard of people losing lots of money trading forex but it was usually because they could not follow simple trading rules that would keep them safe.  For example, students are taught not to trade large amounts until they are successful with paper trading or trading with mini accounts for a few months.  Another rule is that you are not supposed to risk more than a small percentage of your capital per trade.   However, there are many people who simply could not follow these simple rules. Mr Tan, if you have read up to this point, thank you for your patience!  And thank you for what you are doing to help ordinary Singaporeans! 

iPhone Apps

I have updated the apps in iPhone for Tangram and Shape Quiz to show a small image (on request) to guide the player in creating the shapes. This will make the app more interesting to the newbie. It is colorful, fun and trains the imagination. The apps can be downloaded from App Store by searching for "Tan Kin Lian".

High Notes and Pinnacle Notes

The Straits Times journalist asked for my views about the dismissal of the appeal by the High Notes investors against the earlier judgement. I replied that I am sad to learn about this outcome for the following reasons:

• The investors already lost all of their investments. They now have to bear their legal expenses and, possibly, the expenses of the DBS lawyer.
• This decision came around the same time as the good news received by the Pinnacle Notes investors that the New York court has agreed to hear their class action against Morgan Stanley. Furthermore, the New York case is being heard under a "success fee" arrangement where the investors do not have to bear any legal cost, if they do not succeed in the case.
• The High Notes were created by DBS and sold to its own customers. This gives a higher responsibility to DBS, as they should be aware of the risk of this product and should have communicated it clearly to their customers The other credit notes were created and sold by different banks.

I hope that DBS Bank will at least undertake to bear the legal cost of both sides, so that their customers do not have to bear any further loss. It would have been nicer if DBS Bank had offered to give an ex-gratia payment to the investors, instead of having this case decided in court. I believe that DBS Bank might have sold a similar product in Hong Kong and they probably had agreed to compensate the investors in some way - but I do not really have the facts.

Tan Kin Lian

Investing in Options

I do not like to invest in options. My reasons are:

• The price of the option is decided by an expert who takes the other side of the trade. This expert is likely to fix a price that will give him a profit (after allowing for the future possible outcomes). As the other party to this "bet", the retail investor is likely to make a loss.
• It is possible for the option issuer to manipulate the price of the underlying shares to avoid making a loss. For example, if the option pays out a large sum of money when the underlying share hits a certain price, the option issuer will buy or sell the underlying share to avoid hitting the strike price. The cost of buying the manipulating the price of the underlying share will be lower than the  payout on the option strike.

If a retail investor wishes to speculate, it is better to buy or sell the underlying share, rather than buy an option. For long term investors, it is better to buy blue chip shares and keep for the long term to enjoy the dividends and the long term capital gain (and forget about short term fluctuation in the share price).

Lesson: Do not invest in options or other derivatives. Buy or sell the underlying share. Speculating in futures is all right, as the price is a direct reflection of the underlying share index.

Policing the Internet

I found this statement in Singapore Notes:

In the CNA Talking Point episode "Policing The Internet", MP (Tampines GRC) Baey Yam Keng claimed that the Ministry of Law sees the internet as another platform for real world criminals to operate from, and people need to be protected from fraud, cyber-bullying, etc. The timing of gazetting online blogs had nothing to do with policing the internet, he said with a poker face. While at it, he might as well add that the president's addendum had nothing to do with the online revelations about the circumstances of his son's 12 year deferment. The wording of the Ministry of Law statement on the subject goes like this:"The proliferation of new media has brought about new challenges to the rule of law and the ministry will review legislation to deal with harmful and unlawful online conduct". Smells like a good-cop-bad-cop routine is in play.

I am in favour of policing the Internet to make sure that it is useful for lawful purposes. This is to prevent people from doing harmful things while remaining anonymous. I know that it is difficult to police the Internet but it should not deter us from taking the challenge.

The first step is to lay down the law clearly and identify what are offences and crimes. Some examples are:

• Defamation
• Bullying
• Telling lies
• Cheating

These are offences in the real world, so it should not be different in the Internet world. The next step is to enforce the law and take action against the culprits. This is not different in the real world. Someone will report to the Police of an alleged crime. The Police will have to investigate and gather evidence to find out the culprit and charge the culprit in court. 

The next challenge is to have sufficient people to do the work. There is no short cut to enforcing the law - you need policemen and public prosecutors. These are good jobs - much better than having more people to be insurance and property agents!

I am also in favour of a requirement that people posting statements should be identified. They can use a pen name, but their real name should be registered somewhere and can be traced for accountability. I do not support people giving views and statements under anonymous cover, as the lack of accountability can lead to bad behaviour.

Some people feel that they have to be anonymous to avoid bullying by the people in power. This is not a good reason. If the people in power act badly, we should vote them out of office. But if they are elected, we have to live with the consequence, i.e. obey the rules and the law - including speaking with accountability.

Risk of Credit Default Swaps (CDS)

Suppose you bought Greek bonds and to protect yourself against default, you bought a CDS and paid a premium for this protection. The Greek government now offers repayment with a 50% "haircut" (i.e. you suffer a 50% loss) and you wish to make a claim on the CDS. Will you get paid for your loss?

According to this article, you will not be paid, as this is called a "voluntary settlement". On the other hand, there are many investors who were on the other side of the CDS during the Lehman crisis, and they lost all of their investments. It is "tail they win, head you lose".

Lesson: Avoid all types of complex instruments. Just invest in the STI Exchange Traded Fund or in blue chip share". Attend the FISCA Financial Planning talk - http://easyapps.sg/assn/Org/Event.aspx?id=5

DBS High Notes Investors Lose Appeal

It is sad that the retail investors lost the appeal with cost. This means that they lost their investment and also have to pay their lawyer's fees. So, their loss is compounded.

Singapore Investors Lose Bid to Recoup $14 Million Lehman-Related Losses

http://www.bloomberg.com/news/2011-11-02/singapore-investors-lose-bid-to-recoup-lehman-related-losses-on-appeal.html

The Bloomberg article did not mean the words "with cost". I remember reading it in the newspapers.  I believe that this meant that the investors also have to pay the legal fees of DBS Bank (but I need someone to confirm this fact).

In contrast, read this Good News for Pinnacle Notes Investors

Collapse of MF Global - the lessons

Read Lucky Tan's article here.

The collapse of MF Global in the USA have a direct impact on retail investors in Singapore. They have money in their accounts with this brokerage firm and are worried that they may not be able to get their money back.

This brokerage firm lost a lot of money in the European bonds. It was reported that they might have transferred some of their client money to cover these loses.  It could be a big mess.

600 million missing in MF Global

This raises the issue about financial institutions, such as banks and brokerage firms, being involved in large scale speculation with their shareholder's money and, through illegally means, with their client's money. How can it be prevented?

I recall reading about the Glass Stegall Act in the USA which used to separate investment banking (where the speculation is carried out) from commercial banking (which has the fiduciary duty of looking after the money of their clients. This Act was passed during the Great Depression - after the lesson of the global financial collapse in 1928 - to address the same problem. With the passage of time, the lessons were forgotten and the key provisions of the Glass Steagall Act was repealled. This allowed the replay of the same drama.

Here is a description of the Act from Wikipedia:

The Banking Act of 1933, Pub.L. 73-66, 48 Stat. 162, enacted June 16, 1933, was a law that established the Federal Deposit Insurance Corporation (FDIC) in the United States and introduced banking reforms, some of which were designed to control speculation.[1] It is most commonly known as the Glass–Steagall Act, after its legislative sponsors, Senator Carter Glass (D–Va.) and Congressman Henry B. Steagall (D–Ala.-3). Some provisions of the Act, such as Regulation Q, which allowed the Federal Reserve to regulate interest rates in savings accounts, were repealed by the Depository Institutions Deregulation and Monetary Control Act of 1980. Provisions that prohibit a bank holding company from owning other financial companies were repealed on November 12, 1999, by the Gramm–Leach–Bliley Act, named after its co-sponsors Phil Gramm (R, Texas), Rep. Jim Leach (R, Iowa), and Rep. Thomas J. Bliley, Jr. (R, Virginia).[2][3]
The repeal of provisions of the Glass–Steagall Act by the Gramm–Leach–Bliley Act in 1999 effectively removed the separation that previously existed between investment banking which issued securities and commercial banks which accepted deposits. The deregulation also removed conflict of interest prohibitions between investment bankers serving as officers of commercial banks.

What are the lessons for today? Financial services and banking have to be more strongly regulated. Some specific measures include the following:

• To separate investment banking from commercial banking

• To require all trust account to be held by the banks, and not the brokerage firms. However, the law has to be updated to make it convenient to operate these trust accounts conveniently and through electronic means - and still retain the value of a third party oversight.

If these measures are not addressed, we will continue to see a repeat of other failures, similar to MF Global.

Singapore's crime rate

Lucky Tan asked:

Singapore has the highest prison population per capita after USA among developed countries. We have the 2nd highest rate of incarceration in South East Asia. Our rate of imprisonment is triple that of Malaysia. There is this poster that the SPF put up around housing estates that says "Low Crime Rate Does not mean no crime". If our crime rate is low, why are there so many people imprisoned? The USA has a large prison population because the crime rate is high.
http://singaporemind.blogspot.com/2011/11/singapores-high-prison-population.html

Medicare in USA - complicated and expensive

USA provides Medicare to its elderly. It is a generous scheme, but it is too costly. And it has become very complicated. This kind of problem is felt by most countries in the world. And Singapore is no exception - except that in Singapore, the people have to bear a large part of the cost. And insurance is not a solution - as it can get out of control.

http://money.cnn.com/2011/11/01/pf/medicare_plans.moneymag/index.htm?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+%28Top+Stories%29

What is the solution? I will say frankly what I think - and it will not be popular. We have to manage expectation. We must realise that people will have to die one day, and that using expensive medicine to prolong life is not the answer - the person who is cured will suffer a lower quality of life and the treatment will bankrupt the family (or the state). The medical profession will be able to find new wonder treatments, but they will be too costly for the patients or the country to bear, and will make the medical specialists rich.

We must educate people to accept that there is a financial and practical limit to medicine, and to accept that life will have to end one day. If doctors think that they can cure the patient, they should only collect their fees on success, and not on failure. If this success fee is practised, many doctors will not undertake treatment that are not likely to succeed.