CBDC - a new approach

 Many central banks wanted to implement a digital currency (CBDC). They blindly followed the suggestion that CBDC should be based on blockchain. That was a big mistake.

There is no need for CBDC to follow blockchain (which was the platform used for cryptocurrency). If they adopt a traditional (i.e. non blockchain) platform, they would be able to implement CBDC more quickly.

Blockchain is expensive to implement and to process. It also complicated and requires special devices, which is not available for ordinary people.

Google told me that the most widespread use of CBDC is in Nigeria. My Nigerian friend told me that the eNaira is hardly used.

China has tried to implement eCNY for several years. It also did not take off. The eCNY was officially launched at the winter olympics in early 2022. There was no further report of any wider rollout. I think the eCNY, based on blockchain technology, was not well used.

If the policy makers in the central banks, including MAS in Singapore, realize their mistake and adopt CBDC based on a traditional platform, they are more likely to succeed.

There are still many challenges to be overcome, but moving out of blockchain is the first step.

Tan Kin Lian
https://tklcloud.com/Feedback/feedback2.aspx?id=5562

Wisdom of the Crowd - New Issues

1. Should the Communist Party of China change its name?
2. Should National Service be continued in its present form?

Vote in
https://tklcloud.com/Crowd2/vote.aspx

Time to review National Service

For a few decades, I have been against the current practice of National Service. Here are my reasons.

1. It is too long.
2. It imposes a burden on our male citizens and make them loss in competition for jobs against foreigners and females.
3. It is costly to train NS men and keep them trained as reservists.
4. It is more effective, and perhaps cheaper, to have professional army, who can develop their professional over a full time career.

I support an effective defense strategy, but prefer it to be based on a professional army.

We can provide basic military training for our male citizens but this has to be for 6 months only. When there is hostility, they can be called up for refresher training. This is not perfect, but is a workable option. Several countries adopted this approach.

The recent deaths of NS men reminds the citizens at large that our current approach is not working well. Sadly, this will soon be forgotten, until the next accident and death occurs. Singaporeans respond to the news at the moment, but have short term memories.

It is time for Singaporeans to wake up. We need to re-look at our approach towards national defense. We should not continue to foster a heavy burden on our male citizens.

Tan Kin Lian

https://tklcloud.com/Feedback/feedback2.aspx?id=5561

How will China solve its property bubble?

I am watching how China acts to solve its property bubble with great interest.

China is not the only country with this problem. The problem over inflated property prices also affects many developed countries, including America, UK, Australia and Singapore.

The citizens of these countries were led to believe that property assets are an excellent form of investment. When property prices rise, they expectations turned out to be correct. Properties were a great form of investment.

However, the property prices can go up to unrealistically high levels, which are beyond the reach of most citizens based on their earnings. These prices become a bubble.

We have to watch how China deals with the bubble. How can they bring down their prices to a reasonable level, without crashing the market and causes large losses to the existing home owners?

I read an article that described a possible solution. The China authority has been working on this solution for the past decade. It is not a solution that they cooked up in a hurry.

According to this article, China will be creating real estate investment trusts (REITS) that will buy the existing properties and offer them for rental to tenants.

I believe that this approach will work. Here are my reasons:

1. It is possible to set the rentals at a fair level that reflect the average earnings of the tenants. When the earnings increase, the rentals can be adjusted accordingly.

2. The rentals will be market related, but will avoid the wild swings caused by speculation and temporary shortages or over supply.

3. This mechanism will provide a fair return to the investors of the REIT and make the housing affordable to the tenants. It is market based, but exclude the excessive market speculation.

4. There are still many challenges that need to be overcome, but I find the general approach to be appropriate.

Tan Kin Lian

https://tklcloud.com/Feedback/feedback2.aspx?id=5560

Helping the poorest in our society

A respected top civil servant, now departed, said "We should concentrate helping the poorest 5 to 10 percent of the population, instead of handing out a general largesse. .... Why tax the lower-income and then return it to them in an aid package? It demeans human dignity and creates a growing supplicant class who habitually holds out their palms. "

Someone ask the question - how do you help the poorest 5 to 10 percent without giving them financial assistance?

The departed civil servant is not around to answer this question. I will answer it on his behalf.

We can help the poorest in our society by giving them suitable and dignified jobs with a decent rate of pay.

I suggest that this rate of pay should be $12 an hour. Suitable jobs can be created for older people that are useful to the community at large, and gives them dignity. Examples of these jobs are security, guides, care givers, waiters, cleaning.

These jobs should also be made available to the unemployed, who lose their regular jobs due to economic circumstances.

These jobs can be for shorter hours, and not be physically demanding. By paying them an hourly rate, the work schedule can be adjusted to suit the service to be provided and the physical ability of the worker.

It is not costly for a community to provide these jobs, and they are helpful to the people who need these jobs to earn an income. They do not need to be unemployed and be the poorest in the community.

Tan Kin Lian

https://tklcloud.com/Feedback/feedback2.aspx?id=5559

Sustainable global population

What is a sustainable population for earth?

The global population is now at 7.8 billion people. Will the earth be able to produce enough food and other resources to feed a growing population? Will the water resources be adequate?

Should the global population be allowed to grow to 10 billion, 15 billion or 20 billion?

With the current state of our technology, including agriculture, water and energy technology, we appear to be able to feed a growing population, and have enough to spare for emergencies.

We are not suffering any food shortages for the immediate future, except for the supply chain disruptions caused by the conflict in Ukraine.

However, some people argue that the population has already exceeded a sustainable level, and that the current population is causing challenges to the environment, climate and other forms of life.

It may be necessary to plan for a smaller global population to protect the environment. Maybe, a sustainable global population could be 5 billion.

This approach does not mean that we need wars and genocide to reduce the human population. Already, many people do not wish to produce children. It may be possible to plan for a smaller population, without making drastic changes to the preferences of most people.

We need a new mindset. We should not aim for more economic growth. Instead, we should aim for adequate production to meet current needs.

It also mean that people should be working less hours. They should not be competing for a bigger market share, or to acquire more wealth than others.

Life can be more meaningful, if people feel a sense of security and work to produce just enough for their needs. They will have more time to live a fulfilling life.

Tan Kin Lian
https://tklcloud.com/Feedback/feedback2.aspx?id=5558

Investing in government securities

 I have written this article on investing in government securities (bond or T-bills).

https://fisca.sg/ArticleDisplay.aspx?ID=1268

Review of China Suntien (0956.HK)

 I hold 90,000 shares of China Suntien at an average cost of $6.66 HKD. The current price is $3.20 giving me a loss of 52%. My current loss is $316,000 HKD, or $55,000 SGD.

The current price in HKSE is a discount of 73% of the price in Shanghai.
China Suntien now has a price earning ratio of 5.75X and a dividend yield of 6.1%.

https://fisca.sg/ArticleDisplay.aspx?ID=1267

WOTC - Sinovac vaccine

 Wisdom of the Crowd: 65% of respondents said that they prefer the Sinovac vaccine as they consider it to be safer over the long run, compared to the MRNA vaccine, which is more effective against covid.

https://tklcloud.com/Crowd2/chart.aspx?ID=2766

WOTC - Presidential election in 2023

 Wisdom of the Crowd: 100% of the respondents said that they would not vote for Ho Ching, if she runs for president in 2023. They prefer a person who can act independently of the government.

https://tklcloud.com/Crowd2/chart.aspx?ID=2767

WOTC - Protests in China

 Wisdom of the Crowd: 58% of the respondents said that the residents in China were tired about the covid restrictions and that was the main cause of the protests.

https://tklcloud.com/Crowd2/chart3.aspx?id=2768

China has relaxed its covid restrictions

China has relaxed its covid restrictions. It has announced several changes to its restrictions during the past two weeks. The changes have been quite significant.

This decision follows protests from its residents on the impacts of the restrictions on their livelihood and social activities.

The relaxation will bring possible health risks. More people will be infected with covid, and more people will need to be treated in hospital. There is the fear that the hospital system will be overwhelmed. Deaths from covid will also increase.

This is a risk that is worth taking. If the hospital system is overwhelmed and deaths increased significantly, China can reintroduce its restrictions. At the time, the general public will understand and will agree to the measures that have to be taken.

Personally, I think that the risk will not be great. The current variant of the virus is mild, although it is quite contagious.

However, I am expressing a layman view. The medical experts will monitor the actual data and make their judgment.

I wish China all the best in the new phase of its battle against the covid virus.

Tan Kin Lian

http://www.tklcloud.com/Feedback/feedback2.aspx?id=5557

Hyflux could have been saved

 Hyflux, the Singapore icon in the water desalination industry, went bankrupt in May 2018. Their financial problem was caused mainly because they signed a long term gas contract at fixed prices and the electricity market collapsed due to oversupply of gas.

If they were able to tide over this period, Hyflux would have been very profitable today.

Over 34,000 shareholders and bond holders, mostly small investors in Singapore, would have kept their investments intact. It was shortsighted for the government and financial community to allow Hyflux to fail.

This is just a personal opinion - not suitable for POFMA.

Satellite based ERP system

In 2016, the Land Transport Authority awarded a contract to a consortium to install a new satellite based system to replace the gantry system for ERP (electronic road pricing).

One of the benefits of the new system was the ability to charge the motorist based on the distance traveled.

The project cost was $556 million (SGD) and was expected to be operational by 2020.

Due to the covid pandemic, the project has now been delayed to 2023. Furthermore, the implementation of the distance based system, which was the main justification for this new system, has been delayed and no new deadline has been announced.

Here is a recent update.

https://www.straitstimes.com/.../new-erp-system-to-start...

It appears to me that a lot of money, time and effort are being spent on the new system, without any tangible benefit - at least for the immediate future.

There is a further risk - that the new system will face teething trouble. It relies on location data sent out by the satellites. This new technology has not been tested to handle a volume of over 1 million vehicles. There are many possible points of failure, and unexpected trouble may occur.

On a personal note, I would not have approved this project (if I were in charge).

Anyway, I like to wish LTA all the best in their rollout of the new system. I hope to be proved wrong, and that the new system can be the model for other countries to adopt.

Tan Kin Lian

http://www.tklcloud.com/Feedback/feedback2.aspx?id=5556

Wisdom of the Crowd - New Issues

1. What should be done with a mortgage loan when interest rate rises with the market?

2. Should social media platform exercise moderation of the content?

Vote in
https://tklcloud.com/Crowd2/vote.aspx

Mobilize domestic savings

 Developing countries have a small middle class and some wealthy people who have savings.

Unfortunately, these savings are channel to the developed countries, and come back to the developing countries in the form of loans in hard currencies at high interest rates.

Developing countries should find a new mechanism to mobilize their domestic savings, instead of relying on international institutions as the middlemen.

https://tklcloud.com/Feedback/feedback2.aspx?id=5554

Wisdom of the Crowd - New Issues

1. Will the PAP govt be able to moderate the cost of living in Singapore?
2. Should the govt help homeowners who are squeezed by higher mortgage payments?

Vote in
https://tklcloud.com/Crowd2/vote.aspx

Mortgage on fixed payment

A homeowner takes a mortgage loan to buy a home and repays the mortgage over a fixed period, say 20 years.

The ideal situation is for the bank to offer a fixed rate mortgage, so that the monthly repayment remains the same over the period of repayment.

In many countries, such as Singapore, the bank is not able to offer a fixed rate mortgage because their source of funding is on variable interest rate.

It is the practice for the bank to offer a variable interest mortgage. In some cases, they can fix the rate only for a short initial period, say 3 years.

When the market interest rate rises, such as the case in 2022, they have to adjust the interest rate on their mortgages. With higher interest rates, the monthly repayment increases for the home owner.

Initial Interest Repay Annual Monthly

Loan rate Year repayment repayment

800,000 2% 20 48,925 4,077

800,000 5% 20 64,194 5,350

The above example shows a mortgage loan of $800,000 to be repaid over 20 years. When the loan was taken, the interest rate was 2%. The monthly repayment was $4,077.

When the interest rate increases to 5%, the money repayment increases to $5,350. This is a 31% increase in the monthly payment, compared to $4,077 previously.

Many home owners are not able to afford the higher monthly repayment, due to their tight budget. They are not able to pay the additional $1,273 from their monthly income.

A better arrangement is for the monthly repayment to remain fixed at $4,077 and for the loan to be repaid over a longer period. If the interest rate remains at 5%, the loan can be repaid in 35 years.

It is likely that the interest rate will not remain at a high level for many years. When it reduces in the future, the loan can be fully paid in less than 35 years.

The home is probably on a freehold or a 99 year leasehold. Even if the mortgage is repaid over 35 years, the property still has many years of remaining lease.

This arrangement cannot be offered for properties with a remaining less that is shorter than, say, 50 years. Most properties have a longer remaining lease.

Suggestion

I suggest that the Monetary Authority of Singapore should require banks to offer existing home owners to convert their mortgage to this new arrangement, i.e. that they can fix their monthly repayments at the current level, and repay the loan over a longer period. The repayment period does not need to be fixed, i.e. it will continue until the loan is fully repaid.

Tan Kin Lian

WOTC - Fight inflation

Wisdom of the Crowd: 64% of the respondents said that the best way to fight the rising cost of living is to provide a subsidy for energy and food.

https://tklcloud.com/Crowd2/chart3.aspx?id=2762

Poor countries can mobilize internal savings

Many developing countries need funds for their economic development. They issue bonds in US dollar in the international markets. When the US dollar rises, as has happened in 2022, the developing countries find it costly to repay the borrowings. Some have defaulted in the process.

Many developing countries have the means to mobilize their internal savings for their economic development, but failed to do so.

What happened?

In any developing country, there is a middle class that have personal savings. They put their savings in local banks at low interest rates. Part of the savings are invested in the international markets.

The wealthy in the poor countries put their savings in international banks and invest in overseas assets.

The money in the international financial markets return to the developing countries as loans that are denominated in a hard currency, mainly US dollar, at high interest rate.

In essence the international financial system uses the savings from developing countries to provide expensive loans in hard currencies.

It is probable that some development funds are taken from the excess savings of the developed countries. However, the domestic savings of the developing countries could be mobilized to reduce the dependence on foreign funds.

How can this be carried out?

1. The developing country can set up a development fund and issue equity and bonds
2. The bonds will carry an interest rate that is higher than the rate offered by the local banks.
3. The equity will earn the return from the productive assets.

If the development fund is managed professionally and ethically, it should attract the local investors, and maybe international investors.

The developing countries are now paying a high price for funds from international institutions. It will be less costly for them to tap their own development fund. They will reduce their borrowing cost by removing the excess profit margin earned by the international institutions.

While this approach may be difficult to implement, it is not impossible. I hope that the some of the developing countries can succeed with this approach.

Tan Kin Lian

http://tklcloud.com/Feedback/feedback2.aspx?id=5554

Invest in China stocks

 Here are the reasons why I prefer to invest in China stocks.

https://fisca.sg/ArticleDisplay.aspx?ID=1264

Contrarian approach towards investing

 The recently retired CEO of Temasek Holdings said that the fund adopts a "contrarian" approach towards investing. She made this reference in reply to questions about how TH decided to invest in FTX.

I do not understand what she meant by being "contrarian" in that context. 

I adopt a contrarian approach in my investing strategy. Let me explain how my approach works. 

1. By being contrarian, I do not follow the general trend in the market sometimes.

2. If a stock that I invested in had dropped significantly due to market sentiment, and if the price is now below what I considered to be its underlying value, I keep the stock. I may even buy more shares at the depressed price.

3. I do not consider investing in risky startups and highly valued stocks to be "contrarian". I consider it to be speculative gambling. I do speculate in some of these stocks, but I do not describe it as "contrarian".

I wish to share this example of being "contrarian". 

Prior to 1997, many large blue chip companies have the local and foreign tranches of the stocks. The local tranche could only be held by local residents and institutions. The foreign tranche could be invested freely, and could be bought by foreigners.

The price of the foreign tranche were about 50% higher than the local tranche. Many fund managers, including those managing funds for local institutions, preferred to invest in the foreign tranche, as they appeared to be giving better investment gain.

I was the CEO of a large local insurance cooperative. I set an investment policy to invest sole in the discounted local tranches of the stocks. They get the same dividend as the highly priced foreign tranche.

My decision was contrary to the prevailing thinking of the asset managers at that time. I was being "contrarian".

When the government decided in 1997 to merge the foreign and local tranches into a single tranche, the value of the local tranche stocks went up about 50%. My fund made a large gain of over $300 million. It represented many years of the normal profits of the fund at that time. It was a large gain that put the fund into a strong financial position that lasted for several decades.

This is my "fundamental" approach towards investing.

1. For each stock, I make a best estimate of its earnings per share (EPS).
2. I consider a multiple of 15 times of the EPS to be a fair value, i.e. PER of 15 times.
3. If a stock trades below this benchmark, I consider it to be undervalued. If it trades above the benchmark, it is overvalued.
4. I do not worry if the stocks drop significantly below its fundamental value. I consider that some investors had to sell the stock for their own reason, e.g. liquidity, and that reason does not apply to me. 
5. I hold a contrarian view by refusing to sell stocks that are grossly undervalued, nor to invest in stocks that are grossly overvalued.

Tan Kin Lian

https://fisca.sg/ArticleDisplay.aspx?ID=1263

Return from Temasek Holdings

Temasek holdings was formed in 1974. The portfolio size is now $403 billion.

Its annual report showed a 10 year TSR (total shareholder return) of 7%, 20 year TSR of 8% and a 40 year TSR of 12%. These numbers appear impressive, compared with the inflation rate.

I believe that the TSR are inflated, due to their accounting practice.

I believe (but not verified) that SingTel was transferred to Temasek Holdings at its book value before 1994. It was listed in 1994 at a huge gain. This was probably included in the calculation of the 40 year TSR.

In July 2009, Changi Airport was transferred to TH for $2 billion. I suppose that it was the book value, and that the airport was highly profitable at that time. The real value of the asset should be much higher than the book value.

Some time in the future, Changi Airport will be listed in the stock exchange and the market valuation would probably be much higher than the book value. This gain would probably be counted in the TSR of TH.

It is possible to make special adjustment to remove the Sing Tel gain from at the time of listing from the computation of the TSR. I do not know if this was done.

My comment would also apply to the future listing of Changi Airport.

I do not have access to the actual numbers, so my perception and analysis could be wrong. We have to wait for clarification, if it ever comes.

Tan Kin Lian

http://tklcloud.com/Feedback/feedback2.aspx?id=5553

WOTC - Pharmacies

 Wisdom of the Crowd: 42% of the respondents prefer Guardian Pharmacy, followed by Watson (40%) and Unity (19%).

https://tklcloud.com/Crowd2/chart3.aspx?id=2761

A possible bad year for Temasek Holdings

Temasek Holdings had written off US $275 million in its investment in FTX.

During the past 15 years, TH had incurred large losses in some of its investments. In 2008, TH wrote off its $400 million investment in ABC Learning Centers in Australia.

There were other bad investments, which raised much concern in the past.

Personally, I was not concerned about these large losses. For a large fund, there will always be some bad investments. They would be covered by the gains on good investments.

The correct approach is to look at the performance of the entire portfolio, and to compare it with the market indices or with the performance of other similar state owned funds.

The latest annual report of TH was for the year ended 31 March 2022. The total portfolio was $403 billion. The 10 year average return was 7%. This would be acceptable.

However, the performance for the current year, which will close on 31 March 2023, and reported a few months after, will probably be very bad.

I read a recent news report from a managing director of TH that the investments in technology, media and telecoms industry had dropped by 50% and the China stocks had dropped by 20%. These two sectors probably account for 40% of the total portfolio.

https://www.ft.com/.../df58785a-2958-42aa-b7f6-1762286b540b

I would estimate that the portfolio values could be written down by 25% in March 2023. The write-down could amount to $100 billion, based on a portfolio of $403 billion. (This is my guess only).

This could bring down the 10 year average return to 4%, which is not so impressive.

Although the loss on FTX looks quite bad, the actual amount may appear to be small, when compared to the possible loss on the entire portfolio.

We have another four months before the close of the financial year. A possible saving grace could come from a recovery of the global stock market. This would reduce the loss for TH.

Tan Kin Lian

http://tklcloud.com/Feedback/feedback2.aspx?id=5552

How did Temasek Holdings made its investment in FTX?

 Many people in Singapore were disappointed that Temasek Holdings invested and wrote down US$275 million in its investment in FTX.          

There were surprised and shocked to learn, after the collapse, that FTX was run by a team of young, inexperienced people, and there were no proper governance, accounting and risk management practices in place. 

How did TH carry out its due diligence, and invested a large sum into a a badly run business?

This is my understanding of how the venture capital industry works.

The people in this industry that invest large funds into startup companies, such as FTX, form a closely knit community. They know each other personally through attendance at international conferences, business introductions and joint investments in ventures. 

Often, a leading VC capitalist gets to know a startup entrepreneur and decides to fund the startup business. This VC capitalist introduces the startup to the their close contacts in the industry, and probably describes it as "an opportunity not to be missed". 

The other VC investors line up to get a share of this opportunity. They would probably not carry out their own due diligence, as it would take time, and the opportunity might go to other investors who are willing to decide promptly.

I have spent a few decades of my working career in the insurance industry. This is also how the big insurers spread their risk through reinsurance. They follow the leader and take a share of the big risks, often based on trust that the leader has carried out the proper due diligence.

The problem with this approach is that the leading VC capitalist that brings to "opportunity" to other investors might have a vested interest, e.g. they are paid a finder's fee based on the investments made by new investors.

I do not know for certain if this is the case for FTX, but it might be. The  finder fees can be quite hefty, and the payment would probably be considered legal.

Nevertheless, I consider it to be a bad practice for an institution to make a big investment based on this practice of following the leader blindly. 

Many large hedge and institutional funds are involved in FTX. Temasek Holdings was not the leading investor and not the largest investor. 

I expect that the decision to invest in FTX was not made by the portfolio manager on his own. It probably had to be approved by an investment committee. I would expect that the investment committee would include members of the non-executive board. 

I found that Temasek Holdings have a Senior Divestment and Investment Committee (SDIC) that comprised solely of the full time management. It does not appear to include the non-executive board directors. The annual report did not disclose the names and positions of members of SDIC. 

I think that this is a bad practice that needs to be corrected. Some non-executive members of the board should sit in the SDIC. Their role is to check that the full time managers are doing their work diligently.

My above view is based on my the information that I was able to obtain, and that information may be incomplete or inaccurate. 

The government has announced that they will carry out an investigation into this matter. I will wait to read the findings of this investigation. I hope that it will be released in full and quite promptly. 

Tan Kin Lian

http://tklcloud.com/Feedback/feedback2.aspx?id=5551

WOTC - Vote on world leaders

 Here are the results of the votes on world leaders.

https://tklcloud.com/Crowd2/view_perf.aspx

Wisdom of the Crowd - New Issues

1. Why were there protests against the covid lockdown in China?
2. Will Anwar's government be stable?

Vote in
https://tklcloud.com/Crowd2/vote.aspx

WOTC - Food court

 Wisdom of the Crowd: 59% of respondents prefer Kopitiam, followed by Food Junction (22%) and Koufu (17%).

https://tklcloud.com/Crowd2/chart3.aspx?id=2760

WOTC - Supermarkets in Singapore

 Wisdom of the Crowd: 49% of respondents preferred to shop at Fairprice supermarkets, 40% at Sheng Siong and 12% at Cold Storage.

https://tklcloud.com/Crowd2/chart3.aspx?id=2759

WOTC - Harmful content on social media

 Wisdom of the Crowd: 60% of the respondents said that harmful contents on social media should not be moderated as it is difficult to make a judge what are harmful and the content should be left to the discretion of the reader.

https://tklcloud.com/Crowd2/chart3.aspx?id=2758

The dangers of Decentralized Finance (DeFi)

 I read a chapter in the book Megatrends by Nouriel Roubini. Here are his key points about cryptocurrency:

1. The rush to DeFi (decentralized finance) is premature and ultimately misguided. The rush to bitcoin, ethereum, dogecoin and thousands of fledging cryptocurrencies since 2010 expose our collective wilting faith in fiat currencies.

2. There are no signs that crypto-assets are performing any useful social or economic functions. They are not generally used for retail or wholesale payments and do not fund consumption or investment.

3. The blockchain alternatives are not able to perform five essential functions of a currency - unit of account, scalable, stable store of value, stable value relative to prices, be a benchmark to compare value of goods and services.

4. Cryptocurrencies are subject to risks that can become systemic. They are widely used for criminal and terrorist activities and to hide income from tax authorities.

5. One study suggests that 80% of ICO (initial coin offerings) were scams in the first place that flouted security laws.

6. There are evidence of widespread market manipulation - pump and dump schemes, illegal wash trading, fake transactions and front running.

7. Unlike regulated banks, the purveyors of cryptocurrencies furnish almost no protection. If private keys are forgottoen, lost, hacked or stolen, crypt wealth can vanish with no way to recover it.

8. Free riding DeFi flouts the supervision and regulation that traditional financial institutions face, such as AML (anti-money laundering) and KYC (Know your customer) tracking that impose heavy compliance cost. This is unfair competition. 

9. A regulator said - DeFi is most certain illegal. It flouts securities laws, lacks investor protection, preys on regulatory arbitrage against regulated financial institutions, fails to provide the essential services that financial intermediaries provide. Decentralisation is more a myth than reality.

10. If we want to revamp a centralized financial system with safeguards and supervision, we don't need crypto or blockchain. There are tools that the firms can use to collect and process financial data at blistering speeds without the use of blockchain.

TKL has been skeptical of cryptocurrencies and blockchain technologies right from the start. But the experts in MAS held a different view and were optimistic about the future of decentralized finance and blockchain technologies.

Several cryptocurrencies and crypto exchanges have collapsed due to unsustainable values of the tokens and to fraudulent operations.

The view held by Roubini and TKL have proved to be correct. 

https://tklcloud.com/Feedback/feedback2.aspx?id=5550

WOTC - Trust in government

Wisdom of the Crowd: 68% of the respondents said that they do not trust the government to act in the best interest of the people. Instead, they act in the best interest of the wealthy and themselves.

https://tklcloud.com/Crowd2/chart3.aspx?id=2756

WOTC - Freedom of speech

 Wisdom of the Crowd: 53% of respondents said that it is important to have absolute freedom of speech. 47% said that it can lead to harmful content and should be controlled.

https://tklcloud.com/Crowd2/chart3.aspx?id=2757

WOTC - University education

 Wisdom of the Crowd: 68% of the respondents said that university education should be subsidized and made affordable for all students.

https://tklcloud.com/Crowd2/chart3.aspx?id=2755

Wisdom of the Crowd - New Issues

1. Which is a better vaccine against covid?
2. Will the mRNA vaccine have long term harm?

Vote in
https://tklcloud.com/Crowd2/vote.aspx

WOTC - Book on the economy

 Wisdom of the Crowd: 78% of the respondents prefer my book on economic strategy to be 100 pages or 200 pages. They do not like a longer book.

https://tklcloud.com/Crowd2/chart3.aspx?id=2753

WOTC - Price of major medical procedures

 Wisdom of the Crowd: 97 % of respondents said that the govt should publish the recommended rates for major medical procedures, based on supply and demand in the market.

https://tklcloud.com/Crowd2/chart3.aspx?id=2754

WOTC - President Biden talks with world leaders at G20 Summit

 Wisdom of the Crowd: 84% of the respondents said that President Biden held few talks with world leaders at the G20 Summit in Bali.

https://tklcloud.com/Crowd2/chart3.aspx?id=2752

Wisdom of the Crowd - New Issues

1. What is the best way to fight the rising cost of living?
2. Will Anwar be able to help the people fight the rising cost of living?

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Is Tharman Shanmugaratnam too old to take over as prime minister?

Senior minister Tharman Shanmugaratnam is now 65 years old. He is 5 years younger than the current prime minister Lee Hsien Loong.

Is Tharman too old to take over as prime minister?

Apart from age, we have to consider his credentials, experience and capability.

Tharman entered politics in 2001 and over a period of 20 years, he held the office of minister of education, minister of finance, deputy prime minister and now the senior minister.

He had also served with distinction as Singapore’s representative in several international bodies, including the G20 Eminent Persons Group, the International Monetary Fund and in the United Nations. He is well known and respected internationally.

He is not a newbie politician who needs several years to learn the ropes of leading a nation.

What about his age? At 65, is he too old to take over the reins of power?

Heng Swee Keat, who was 4 years younger than Tharman, was earlier selected to take over from Lee Hsien Loong. Heng entered parliament in 2011, 10 years later than Tharman.

If Heng was suitable at 61, would 4 years make a lot of difference in considering age?

Donald Trump became President of the United States at the age of 71 years. Joe Biden took over this office at the age of 78 years. Ronald Regan was 69 years when he became president in 1981. He was considered to be quite old then, but he served two terms and retired at 77 years.

Xi Jinping was elected in 2022 to serve the 3rd term as leader of China at the age of 69 years. He will continue as president of China and may serve another 10 years in this office.

By the standards of the presidents of the two most powerful nations in the world, Tharman can hardly be considered as too old to take over from Lee Hsien Loong.

We should rule out age as being an important factor. If Tharman takes over, he should be able to serve at least 10 years as prime minister of Singapore. He looks healthy enough.

The other reason given by the ruling party, that Singapore is not ready for a non-Chinese prime minister, has already been debunked by several public opinion polls.

The current leader selected by the MPs of the ruling PAP party is Lawrence Wong. At the age of 49 years, he is 16 years younger than Tharman.

While we cannot diminish Lawrence Wong based on his younger age, it is generally accepted that he has less political experience and lower international stature, compared to Tharman. For a small country, the international stature of the leader is important.

Was it a wise decision for the ruling party to bypass Tharman as the next leader, in favour of a younger minister? We will know in a few years time.

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Prime Minister for Singapore

 Is Singapore ready for a non-Chinese prime minister? The answer is "yes" among the ordinary people, not "no" among the PAP.

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Is Singapore ready for a non-Chinese prime minister?

In 1988, Lee Kuan Yew revealed that minister S Dhanabalan had been a possible candidate to succeed him as prime minister but then concluded that Singaporeans were not ready for an Indian prime minister.

Several people had privately expressed the view that Lee Kuan Yew had in mind a certain person to be a future prime minister. The reason that Singaporeans were not ready for a non-Chinese prime minister did not pass the test of credibility.

I personally was sceptical of the reason. While 75 percent of the residents of Singapore were of Chinese origin, they had lived for several decades under the colonial rule of the British until self-government in 1959.

In April 1955, a non-Chinese lawyer, David Marshall, led the left-wing Labour Front to a narrow victory in Singapore's first Legislative Assembly elections. He formed a minority government and became Chief Minister.

Clearly, the majority race in Singapore had accepted a non-Chinese as the government leader three decades before Lee Kuan Yew expressed that astonishing opinion.

Furthermore, Singaporeans had for several decades been imbued with the concept of meritocracy and to select the best people “regardless of race, language and religion”.

Singaporeans had seen the success of this approach in building a harmonious society that achieved remarkable social and economic progress.

I held an immense respect for Lee Kuan Yew for his foresight and insight on international affairs and for his approach in running the government of Singapore. There were however a few matters that I differed from his views. This was one of them.

Goh Chok Tong succeeded Lee Kuan Yew as prime minister on 28 October 1990. He was later succeeded by Lee Hsien Loong (eldest son of Lee Kuan Yew) on 12 August 2004.

The question of the successor for Lee Hsien Loong came up in December 2017. Goh Chok Tong, who held the position of emeritus senior minister after retiring as prime minister, said that it was urgent for the leadership of the ruling party to identify the next prime minister to take over from Lee Hsien Loong before the end of 2018.

Many people among the general public were in favour of senior minister Tharman Shanmugaratnam to take over this position.

An economist by profession, Tharman served in the private and public sectors for several decades, before entering political life in 2001.

He subsequently became the minister of education, minister of finance and deputy prime minister.

He had also served with distinction as Singapore’s representative in several international bodies, including the G20 Eminent Persons Group, the International Monetary Fund and in the United Nations.

The decision to select the next leader for Singapore was not taken by the people at large. It was decided in secret by the elected members of parliament from the ruling People’s Action Party.

In May 2018, the party decided on another Chinese, namely finance minister Heng Swee Keat.

In March 2019, Heng Swee Keat defended the party’s decision to select him, in favour of the more popular non-Chinese candidate, in a university forum. He said that the people would still prefer a Chinese to be the prime minister and made this statement “I can tell you that it is not easy because it triggers all the feelings about race, which are not obvious. But for an election, it becomes an issue.”

A few days after this assertion, 19,900 individuals responded to a viral Facebook poll and 92 percent voted for Tharman Shanmugaratnam to succeed Lee Hsien Loong and become the
next prime minister. This poll did not have any binding power.

A more scientifically based Blackbox survey commissioned by Yahoo Singapore found that 69 per cent of 897 respondents said they would prefer Tharman to become the prime minister.

The choice of the people, if these polls were to be believed, was clearly in favour of a nonChinese to take over as the next prime minister.

This issue of racial pre-requisite for the head of government came up for discussion in 2008, when Barack Obama became the first black person to be elected as President of the United States of America. Prior to his election, the office had always been held by a white person, who formed the majority race in America.

If America could elect a minority as the president, and one who came from a community had served as slaves in America, why can’t Singapore?

I recalled that Lee Hsien Loong gave a weak answer to his question. It was never debated actively anyway.

This question of the racial prerequisite came up again recently, in November 2022, when Rishi Sunak was elected by the ruling Conservative Party to be the prime minister in the United Kingdom. This was the first time that an Asian was elected to the top office in the UK.

The election of the prime minister was decided internally by the ruling party and not the country at large. (Singapore follows this practice).

If a former colonial power, who ran an empire that “the sun never sets” for two centuries, could accept a non-white, and one whose grandparents came from a former colony, to lead the country, why can’t Singapore.

This time, I did not see any active debate, so far.

Let me give an answer to the question – is Singapore ready for a non-Chinese prime minister?

My answer is – the people have been ready for many decades. But the ruling People’s Action Party is not ready yet.

Tan Kin Lian
Retired chief executive of NTUC Income Coop

WOTC - Unlicensed exchange

 Wisdom of the Crowd: 71 % of the respondents said that the regulator should act against the promoters and marketers for promoting an unlicensed exchange. 29% prefer to focus on educating the public.

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Wisdom of the Crowd - New Issues

 

1. Which supermarket do you prefer
2. Which food court do you prefer?
3. Which pharmacy do you prefer

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Know your customer requirements

 I find it troublesome and useless to spend time on the anti-money laundering requirements of our financial institutions.

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Pick the capable leaders to run the country

 China focus on developing the quality of the officials running the country, instead of picking leaders through political elections.

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WOTC - War in Ukraine

 Wisdom of the Crowd: 50% of the respondents said that America wants Ukraine to continue the war. The other 50% said that America wants Ukraine to negotiate for peace.

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Allow developers and engineers to work from home - Twitter

 I offer a practical solution to Elon Musk to allow their developers and engineers to work from home and still achieve a high level of productivity.

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Wisdom of the Crowd - New Issues

1. Should harmful content on social media be moderated?

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WOTC - Harmful content on social media

 Wisdom of the Crowd: 59 % of respondents said that a panel that is independent of the platform owner and the government should decide on harmful content on social media.

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Wisdom of the Crowd - New Issues

1. Do you trust the SG government to act in the best interest of the people?
2. How important is freedom of speech?

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WOTC - Harmful content on social media

 Wisdom of the Crowd: 60 % of the respondents said that social media platform should not be asked to take down harmful content as it will harm freedom of speech as the relevant authority may be politically inclined.

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End of the Ukraine conflict

 I give this suggestion to a possible settlement of the Ukraine conflict.

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WOTC - Prime minister of Malaysia

 Wisdom of the Crowd: 67 % of respondents expect Anwar Ibrahim, PKR, to be the next prime minister of Malaysia.

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WOTC - General election in Malaysia

 Wisdom of the Crowd: 53 % of respondents said that Pakatan Harapan (Anwar Ibrahim) is most likely to win the general election. They have the highest score.

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Set a fair wage for each occupation

 The government should set a fair wage based on market data

We cannot rely on the market to fix wages. The market wages depend largely on bargaining power. The worker is at a weaker position relative to the employer and has to accept a wage that is lower than a "fair rate".

To overcome this weakness, the workers have to join a trade union and bargain for better wages and working conditions. In some cases, they have to go on strike. This is a destructive process.

What is a better way?

The government can use the data of the wage levels for different occupations fix the recommendation wage for each occupation and skill level. This is a "fair wage" and takes into account the supply and demand for the occupation. It overcomes the distortion caused by the relative bargaining power.

When I describe this system to a friend, he asked - are you advocating a communist system?

I replied - I am advocating common prosperity.

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Voting in a general election

 I suggest a secure and efficient platform to handle voting in a general election.

https://s3.tklcloud.com/T99/221118202556583_Voting%20in%20a%20general%20election.pdf

WOTC - Talk between Joe Biden and Xi Jinping

 Wisdom of the Crowd: 31% of the respondents said that Joe Biden and Xi Jinping will have a lengthy talk at the G20 summit in Bali.

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