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With the tightening on bank executives pay, there will be little incentive for financial innovation to re-invent new credit in the markets. This crisis has illuminate the entire economy dependence on credit, especially on the big ticket items. As such, it is hard to see any spectacular recovery in the horizon. But one would expect financial innovation to eventually happen in other sectors (which are not regulated!) and that would hopefully take us out of this downturn. How long would it take for innovation to happen? My guess is as good as yours, but one thing I know for sure, is that when severe constraints are imposed, creativity and innovation happens.
The main takeaway of the budget for me is the CPF rebate paid to companies and the use of the reserve funds. Other noteworthy items including reducing corporate tax to a level effectively comparable (or better even) than Hong Kong.
The effect is somewhat similar to a CPF reduction, in which the company pay less on the employer’s portion of the CPF. The key difference is that the maximum rebate is computed from the maximum value of $2,500, which I think would have been difficult to implement in the context of CPF reduction. Obviously, the cap lends more support to those who are relatively low-paid, because of the higher percentages (of total salary) for the rebates. You can also argue that the lowly paid tend to have skills with little differentiation, making them vulnerable to get cut-off during bad times compared to the highly paid, who needs less protection. In this sense, this policy looks to be in the right direction.
The key question though is that from a company perspective, would it be better to keep this employees or to retrench them? The policy does not incentivize hiring of low-wage workers but merely encourage keeping them. Re-hiring overheads are high but as mentioned, if their skills lacked differentiaton, then training new people would be straightforward. In addition, the current crisis of confidence has reduced the level of credit in the markets. For the companies, the pressing symptom must be that of having sufficient cashflow to sustain. As such, though some form of cashflow will be of help, it certainly looks more attractive to downsize. From a multi-national company point of view, if its Singapore business is not significant (which is the case mostly), then there is lesser need to provide goodwill with the local government and hence, job cuts would be a more attractive option. And for these companies, it would not be in its priority to understand this measure. Given the above reasoning, I feel that the policy, though welcomed by many enterprises, will do little to influence decisions in the desired direction. Most enterprises will be taking the rebate as a form of bonus and those who have decided to cut will execute the cut.
On a more balanced note, though it may not serve its intended need of preserving more jobs than otherwise without the budget, the policy will still inject some level of credit in the market, except there is little to suggest that the credit will stay locally for companies with multi-countries operations. At the very least, the injected money goes somewhere and hopefully get spent rather than saved.
The remaining questions would then be if we really should inject this money into enterprises, or if there is a better way to spend this money, and also related, should the money have come from the reserves. On the latter, spending the reserves is appearing more like sending a strong message about the gravity of this issue and signals the intent of the government to fight the crisis. One way or the other, this money must be spent. Therefore, it then remains only how best to spend it. There are worries about giving handouts to the people directly for fear that they will mis-spend them on unnecessary luxuries like an overseas trip. But as argued above, it should be okay as long as the money goes somewhere else and get spent as well. The only problem with my argument is that giving people’s the money is a comparable option and not necessarily a better option. I would even say the indirect way of giving people money through the proposed policy will generate less social displeasure of perceived unfairness than giving handouts directly.
One of my new year’s resolution is to spend time more productively. Ever since my success with dieting, I have been very sold with active tracking for general health management. I tried tracking all sorts of things but to a large extent, I could not sustain the momentum or interest. One reason could be that none of these are as frightening as premature death. Another reason could be that tracking is not a one-size-fits-all and with things such as work productivity, we may yet succeed with a different approach.
The new approach I am trying out is a revisit of the coder’s approach, i.e., to be idle and lazy. Corporate work is a lot about making people agree to a good-enough idea to move things forward. Making people agree leads to a lot of politics. And like in real-life politics, as depicted by modern political topics oriented media, e.g., BBC, CNN, nothing significant occurs most of the time. Over the last few months of listening to BBC radio, I would say half of the broadcast time is spent on financial crisis and its offsprings (e.g., bailouts) and the other half is on the Gaza conflict. Surely, there must be more news than that and yes, I hear things about Zimbabwe health/food/currency/etc crisis, Thai protestors, Congo conflict, pirates off Somalia coast but it just does not get that kind of airtime compared to the two mentioned.
The above phenomenon may well be clouded by personal perceptions but it does lead to some key facts, which are worth re-visiting. Fact 1, nothing significant happens usually (credit goes to Weinberg’s book of consulting advice). Fact 2, the mind can only occupy with very few things, in this case 2. Fact 3, which is non-obvious, is that history keeps repeating itself even though each time it is a little different. Hence to cause changes such that significant things happen need a lot of time and effort and even with the time and effort spent, there is no gurantee that history will not repeat itself. All these facts suggest that we should let things be the way they are, and if we really like to make that difference to cause a change, then we need to prioritize on one to two items.
The thought process in turn leads to the coder’s approach, albeit with a huge leap of faith, which is to do nothing for most of the things and only concentrate on one or two things. For those one or two things, like the coder, we do not need to be chugging away all the time. Instead we should spend time doing other fun things, and when it comes to do the things that matters, do it in one intense wave. The act of doing fun things frees our mind of constraints and when the situation calls for the answer, hopefully, it should intuitively become evident.
Recently, we permanently transferred our helper to another family and my wife had to start to cook, or more precisely batch cooking. The food actually tasted rather good. Good enough for me to want to bring to a potluck!
There were a few dishes I had, namely beef stew, cheesy hake and pumkin soup. Below are some personal notes on the meals so far.
I am not involved in the preparation and despite the preparation time, the beef stew looked fairly straightforward to prepare and given that no oil (?) was used, it is pretty healthy as well. The only concern is that beef is a red meat. For the health conscious, I think one can switch the meat to chicken with the skin. Based on my independent research, I am more inclined to believe that meat with skin is better because high fatty cuts boost both HDL (good cholsterol…) and LDL (…and the bad) and lean cuts though boosting lesser LDL, also have lesser effect on HDL. The potatoes may have a high GI (glycaemic index), which is bad for diabetics but is nevertheless not my concern at this point in time. Given that beef is a hard meat to chew on, I strongly suggest either cooking for a longer period of time to make it easier for kids or cutting it into smaller pieces than the 2 oz beef chuck cubes that they are made of, prior to cooking. The dish is also not very salty suggesting a low sodium content.
The cheesy hake main health hazard is the cheese, which is high in saturated fat. These are regular cheddar (not the processed slices though). I wonder if the taste would remain the same if reduced-fat cheddar is used. As the name suggests, this dish is cheesy, and if you like cheese, you like this dish. On a more critical note, I think the cheese clumped up too much and I would think the key here is to use less cheese and spread them more thinly and evenly. Or it could be that the cheese needs to be shredded further. Hake, in general, is a nice white fish, having a very cod-like texture and because of the size, more like a lengthier local selar, you cannot cross cut a fillet section to fry. I think our last helper is quite good at ensuring that the fish stayed in a single piece when she pan-fried those. Anyway, given that this looked more like a baked dish (I am assuming), the hake holds up very well, and when I bit on it, I thought it was more firm than the usual pan-fried ones, suggesting that it may need to be cooked a little longer. I think if this dish can freeze well, the reheating and cooking may be what the fish and dish need (though, the first impression is that the cheese should be added during each time we plan to serve).
The pumpkin soup (or rather cream stew!) is great and I wonder how much is due to the added cream that we bought earlier. Cream, as some of you may know, is one of the fattiest dairy. Starchy vegetables like pumpkin and broccoli lend very well to this type of cooking. I can immediately think that carrot, potato and cauliflower would be excellent substitution/addition choices as well. I think to compensate for the cream, we should be able to get away with buying reduced-fat milk and adding more of the starchy ingredients and/or cooking over a longer period of time. Indians will like this dish a lot, especially with the cumin and nutmeg spices.
Overall, I think the batch cooked food is not only better than I expected but is great tasting as well. The problem I foresee is that all these dishes tend to be starchy and dense, which works well for those who like Indian food, but given that we like variety, I would think at some point in time, we would need to think of steaming (light and airy tastes) and stir-frying (to preserve the crunchiness in vegetables).
My perceived lack of fibre in the batch-cooked meals is compensated with additional servings of (1/4 head) lettuce and (1 stalk) celery in Italian dressing and of two apples, in one is eaten together with natural yoghurt.
Many may not understand the impact behind the recent fall-out on the sub-prime loan but it is a classical bubble case. Bubbles are best understood as objects that take up volume and continue to do so until they burst. Before they burst, everybody think it will keep growing and continue to need more real estate, i.e., volume. Once they bursts, nobody realizes how much volume it had taken up because these bubbles were hidden deep below. Overtime, the bubbles with impact the layer above and subsequently, it would reach a point that the structure collapses and everybody realized what is happening.
In this case of sub-prime loan, we are giving people money that they are unlikely to pay back. This easy credit creates a situation of over-supply (in this case of houses) against a somewhat artificial or more appropriately, hollow demand. When this demands disappears, the supply chain collapses. The funny part about economy dependency is that when you give people easy money, the money circulates around for all kinds of unrelated things like sport players’ transfers fee, mergers and acquisition, stock markets investments, etc. Once the easy money flow disappears, the rest of the unrelated things are impacted. Fortunately, in some cases, the value is huge but not substantially huge until it kills off everything else, so the impact diminishes as it propagate down these unrelated economic activities. Unfortunately, in some cases, it gets blown out of proportion. It is not so long ago that we were all killed by money being paid for 3G licenses across the globe.
I will not be surprised if this current spate of bad news about the subprime loan fall-out eventually impact the sports’ transfer market. The key here is not on the locality of the fallout but the actual value of the fallout. Given that central banks are putting tens of billions to fill in the cashflow gap, you do get the feeling this is of the same magnitude as the 3G fallout. As such, it is not hard to imagine a worldwide recession being felt in the next one to two years, especially after China, who has been the last bastion of strong economy, loses it immunity when the Olympics begin!
I recently went Saigon. It is a bustling city destined to make a mark in the next 10 to 15 years. The French influence is clearly still felt, especially around the culture and food. Like any other developing city, there is too much pollution and poorly governed traffic, all the more so under earlier French influence and relatively cheap influx of motorcycles.
Vietnam on the whole as a reasonably large population but it is overshadowed due to the global interest in the two mammoths in Asia, China and India. Having said that, due to its more manageable size and distribution in population, it could still sneakily catch up with the two big players. Definitely a country with much potential.. I cannot help but think that socialist model mixed with international collaboration is the faster mode of development compared to laissez-faire democracy for developing countries.
Sometimes, I get the feeling that there is nothing left to learn, but each year, despite being in a relatively poorer environment, there is something new to learn. In the start up, I learn about perceived fairness and the not so glamorous side of running a business. It made me understand better what the work contract is about. I also learnt that my technical skills have not gone away but in fact, have grown more powerful when integrated with the corporate skills I acquired.
In the year spent with the pharmaceutical company, I have clearly identified my strength in gathering business requirements. I have gone into a completely new domain and understand the needs better than some of the people who have been in the business for a long time. A large part of it is due to the in-depth understanding of the domain, developed through easy access to domain knowledge (from internet), learning broader domain knowledge beyond the work scope and building relationships with people who are willing to impart the knowledge.
I also get to know my weaknesses and preferences better, which can also be considered as another form of learning. I cannot work in an environment where open discussion is suppressed. I produce my best work under a good boss (but the good bosses have a tendency to be too open and soft in pushing certain points across). I always have this feeling I am unfairly treated in terms of human resource issues, e.g., office space, pay, etc. I still do not know the right things to communicate to senior executives.
In terms of future learning, I need to start working on higher level skills like wielding my intuition more effectively and confidently and to be able to regulate my emotions. On the former, I realized my intuition is usually right but I do not have the conviction to insist on my gut feel. There is this tendency on wanting to do some things. On the latter, I tend to get frustrated too easily and have this tendency on wanting to even things up. I need to be able to discard the frustration and begin each day with a fresh page. In times of elation, I need to be able to control my excitement over unqualified successes. On the other hand, it also does not mean that I have to think negatively constantly to avoid disappointments. I must be able to control the mental states of anger, happiness and sadness more effectively. With a well-balanced emotion and powerful intuition, I should be able to reach to the next level in terms of problem-solving capabilities.
I just saw a master seasoner seasoning mackerel on TV. It is impressive that he can grab 20g of salt each time with his bare hands. He demonstrated by grabbing salt and scattering it onto 3 electronic weighing scales. On the first attempt, he was off by 2g on one of the scale. In the second attempt, he managed to “weigh” 20g consistently on the 3 scales. In practice, he is able to salt the mackerel with such consistency 10 at a time in 2 seconds flat. That is what we call a true master.
It reminds me of what I set out to be. I have to strive on being the best in the line I am in. Being the best currently means to be able to make impossible projects finish in record cost and time covering the most scope and attaining the highest quality. Only when I am able to do that consistently for all projects would I be able to call myself a true master.
Unlike operational work, project work is not repetitive and hence, to be able to see patterns across projects is challenging. To be able to master this, I need to work on impossible projects. To work on impossible projects, I first need to show to people that I can do the simple projects well. In addition, I need to be doing projects across multiple domains to be able to comprehend different types of projects and understanding the patterns. So far in my career, I have a fair bit of switches from research to technical to people management, from pharmaceutical to products to projects and from supply chain to regulatory to financial accounting.
Some of the hard projects I have seen as one or more of the following characteristics:
Same data coming from different sources
Processes driven by legacy and regulation that nobody really know absolutely about
I have recently cashed in some investments of over 5 years. I am sitting on some paper loss still. For the cash-in portion, I am mostly ahead.
I had a few misconceptions to my trading style. Basically, I follow a buy-and-hold strategy. In general, the strategy worked well, but the money allocation did not. If I had equally distributed my investments, I would have done better. I had most money in two stocks. One is doing okay and the other is down at least 70%. As a result, over the 5 years compound, even with discounted shares, I am only up about 2% per year. Good thing is that I did not lose that much of money but the bad thing is that 5 years have gone and I am pretty much where I started. From a timing perspective, I could not have done better, I started buying as the market loses steam and sold as the share market is hitting new peaks (and I only did 2% CAGR). The first misconception is the lack of money management/risk control. I subscribed to the Buffett-Fischer school of selecting very good stocks but the only problem is that I realized that given my time spent and the information available, there is no way I can be so accurate in picking the right stocks. As such, I need to adopt a money/risk management approach to buying stocks. More concretely, I need to be more distributed in my purchase. Putting it in two baskets is clearly not enough. I need more baskets. Having said that, I am still not a big fan of diversification and I still believe in picking a small pool and making sure this small pool do well as a whole.
Second, timing is of certain importance. For example, my global internet unit trust has lost money since my initial purchase and the fund was introduced after the internet stocks have gone down. Therefore, it looks risky buying at a high or when the trend is moving down, because using the buy-and-hold strategy, it will take a long time to reach the break-even point. If I would to do this again, I would rather buy as it is going up, rather than going down. And I should persists my buying over down period rather than stop (because I had to get married and spend money elsewhere!).
Third, what worked well was my money market fund. Sure, the returns are most likely to be described as pathetic, but the fact that I saved $100 a month for 5 years resulted in a $7k savings. Imagine, if i have saved $200, the savings would be $14k and if I have saved $500, it would be $35K. For that matter, this investment worked so well that I am really better off saving a large pool of money in this type of money market fund and invest the money when the market is really doing bad, or as it is picking up from a bad spell.