The Ministry of Trade and Industry has released this paper. One recommendation is to improve productivity of our businesses. I have given many feedback about the time wasted in submitted mandatory returns to government agencies, such as CPF, MOM, ACRA, IRAS, SAF and other agencies and accessing information from government websites on these regulatory requirements. Many of the feedback were sent to the Pro-Enterprise Panel under MTI. I hope that the Minister will get his senior officials to contact me and understand the issues that I have raised.

http://www.todayonline.com/Singapore/EDC120925-0000108/MTI-releases-Occasional-Paper-on-population-and-economy

12 people became 13 people

I received this by e-mail. The 12 people became 13.
Do you know where the additional person came from?

Misleading yield on life insurance policy

If you find a new life insurance policy that gives you an attractive yield on maturity - be careful. It can be misleading. Here is how you can find out.

http://tankinlian.com/FramePDF.aspx?ID=668

Top blue chips and REITS - August 2012

Here are the top blue chips, sorted by dividend yield, as at 31 August 2012
http://tankinlian.com/admin/file.aspx?id=685&IID=689

Here are the top REITS, sorted by dividend yield, as at 31 August 2012
http://tankinlian.com/admin/file.aspx?id=684&IID=688

Punishing the very poor

I share the views expressed by Alex Au and like to see the law changed
http://yawningbread.wordpress.com/2012/09/25/torturing-the-poorest-of-the-poor-in-the-name-of-law-and-order/

Skewed maturity benefit projections

Some life insurance companies have introduced new policies with skewed maturity benefit projections. They seem to give an attractive yield on maturity but the yield during most of the terms are poor. I find this type of projection to be unacceptable, as the life insurance company is not distributing the bonus in a fair manner. The bonus distribution is quite arbitrary. The danger of this type of projection is that the insurance company may reject the projected maturity payout on the grounds that they are only projections and the investment climate is bad. I advice consumers to avoid all types of life insurance policies with skewed maturity payout - i.e. if the bonus is quite low for most of the years but is bumped up towards maturity. See an example here:

http://tankinlian.com/FramePDF.aspx?ID=668

Bank fees

Banks in America are now charging a fee for the use of ATM and for their check accounts. This trend will come to Singapore. Read www.fisca.sg (Information). 

Layoffs in banks

Many graduates like to work for the banks, because they pay higher salaries. But, they should be aware of a global trend in layoff bank workers. Read www.fisca.sg (Information) for my analysis of this trend. 

Raise taxes on the rich everywhere

The global economic is in bad shape because the most wealthy and top income earners pay too little tax. The  governments do not collect enough revenue to pay for the services and expenditures, including the welfare for the very poor. These governments have run large deficits which are not sustainable.

To overcome this budget deficit, the governments have to raise the tax revenue on the very rich who are earning a disproportionate share of the national income. Different tax rates in various countries allow the rich people to use creative accounting to move their earnings to countries that charge the lowest rate of tax. This "beggar thy neighbor" competition, including tax havens, is causing further damage to the global system.

A possible solution, as advanced by Hilary Clinton, is to "raised taxes on the rich everywhere". It requires an international agreement. It is a necessary step to solve the global financial and economic malaise.

Read this article
http://www.cnbc.com//id/49150934

SAF Portal

I had to apply for make-up pay for the reservist training attended by my 

employee. My login, with SingPass, to the SAF portal was rejected for 

some unknown reason. I received a message to call the SAF call center

1800-3676767

The automated messages programmed at the call center was quite inconsiderate.

I was asked first to identify my category - whether I was in SAF or Home Team. I 

did not fit into it. But there was no other option.

I tried SAF and was led to another automated message listing a number of

enquiry types. Again, I fitted into none of the pre-arranged choices. I tried the closest

choice and had to wait for someone to pick up the call. No one picked up the call. I gave up.

I sent my enquiry by e-mail and received a reply to call the same call center 

number.

My employee agreed to submit a manually filled form and asked me to sign and 

stamp it. Subsequently, I still received an e-mail to verify some transaction in the

SAF portal. My login to the portal failed again. 

I received the same message to call the call center. I tried and once again, 

got lost among the automated messages.

This transaction must have wasted two hours of my time. I wonder how many 

employers faced the same type of difficulty. Surely, it is time for SAF to wake up

and change their process? Surely a form that is signed by the employee and 

employer is sufficient and does not need to be re-verified? 

Can our economy afford to waste so much time on these mindless processes?

Tan Kin Lian

The power of statistics and the National Conversation

My survey on the Ferrari crash is a good example of the power of statistics.

The survey asked the participants to give their views on the decision of the insurance company to deny liability for the accident as the Ferrari was driven recklessly. The first 10 replies showed an equal balance between those who support and those who do not support the decision. The same results were reflected based on the first 20 replies, the first 30 replies, the first 40 replies and now a total of 50 replies. The results were split evenly based on all the progressive reports.

Clearly, this is a matter where the public is evenly split on this matter. Those who support the decision of the insurance company felt that reckless driving should be punished. Those who disagree with the decision felt that the insurance company should abide by its contractual obligations.

If a survey is carried out in an unbiased manner, the results for the first (say) 25 replies tend to be representative of the views of the population.

Perhaps the National Conversation should be assisted by survey results on several important topics affecting the people of Singapore. The survey can be based on 100 people, who are selected to represent the population. Several survey can be carried out with on different topics and can involve a different group of people - to reduce the stress on any single person answering too many questions.

The Police does not know the law!

The quality of governance in Singapore has been deteriorating over the past two decades. Here is another example of a shameful state of affairs ....

A report in the newspaper about "rent-a-mob" said,

"Check with lawyers first, police say. Want a flash mob? Speak to a lawyer first. This is the advice from the police .... To avoid running afoul of the laws, organizers and participants should seek advice from their own legal counsel before organizing or participating in flash mobs. "

If the police, who is supposed to enforce the law, does not know what is or is not legal, how would an ordinary lawyer know? How would the public know? How would the police react, if a complaint is received from the public?

Is this a satisfactory state of affairs? We have seen many examples about one government agency pushing responsibility to another, and that has become the standard operating procedure in Singapore.

I leave it to Prime Minister Lee to reflect on this state of affairs, and to instruct his Law Minister and Home Affairs Minister to do something about making the law clearer to the citizens and to the law enforcers.

Corruption in Singapore

Mr. Feed has his interpretation of corruption in Singapore.
http://feedmetothefish.blogspot.sg/2012/09/cpib-what-is-corruption-in-singapore.html

Mobile apps and contests

My staff is introducing a few mobile apps that are good for training children and adults. You can also participate in weekly contests to win prizes. Go to www.facebook.com/tankinlianassociates.

Affordable housing prices

It seems that China has a better approach in keeping housing affordable, rather than let the prices escalate under the concept of "asset enhancement". http://www.cnbc.com//id/49136883

Insurance claim on Ferrari accident

Do you support the decision of the insurance company to reject the claim on the Ferrari accident?
Give your views in this survey. http://www.surveymonkey.com/s/FP39P6W

Display sequential stop number in the bus

I have written to the newspaper to suggest that the sequential stop number should be displayed when the bus arrives at a stop. This allows the passenger to know if the number of remaining stops before their destination. They can find ask for the stop number before or on boarding the bus.

The newspapers did not publish the suggestion, so I posted in in my blog and facebook. My friend, who visit Hong Kong regularly, told me that the sequential stop number is displayed on buses in Hong Kong and Shenzhen. I asked him to get photos for me.

I hope that the part of the $1.1 billion can be used to implement simple and low cost ideas to make our buses more convenient for consumers.

Interest rate on installment plan

Courts advertised their regular sales. They show the cash price and the installment play for many products. Do you know the interest rate charged on the installment plan? It is 46% per annum. The calculation is shown here. http://tankinlian.com/admin/file.aspx?id=683&IID=687

Innovation in the Financial Industry

Quote from Paul Vocker, former chairman of the US Federal Reserve Board, a highly respected personality:

Volcker has been known to defy the stereotype of a Wall Street insider. A profile in The Week for February 5, 2010, claimed that Volcker doesn't even buy the conventional wisdom that "financial innovation" is necessary for a healthy economy. In fact, he likes to say, "the only useful banking innovation was the invention of the ATM."

 http://en.wikipedia.org/wiki/Paul_Volcker

Danger of low interest rates

Governments around the world have reduce interest rate to almost nil, in their attempt to stimulate the economy and create jobs. It does not seem to work. In spite of low interest rate for more than a year in America and Europe, unemployment remained at a high level.

The low interest rate has caused asset bubbles to form in the property and stock markets around the world. It has also damaged the earnings of retirees who gets almost nothing for their savings. The harm that is posed by low interest rate is quite serious and is not being recognized. The longer it continues, the worse will be the bubble and other damages.

In the near future, people will abandon cash and buy gold and other commodities. This is already happening and may become a flood. This may lead to high inflation, as money is being abandoned. We may have to study the hyper inflation in Germany in the 1930s to understand how this situation will play out. Read this article.

Governments can combat inflation by increasing the interest rate. This happened in the 1980s under President Reagan. Paul Vocker was the head of the US Fed. Read this article.

Will we have high inflation to be followed by high interest rate?  We have to watch the events closely!