LEE KUAN YEW DID NOT LIE THAT VALUE OF HDB FLATS WILL NOT DROP

 

In my previous blog "HDB punditry - an outside the box view with stuff no one told you before" I referred to the 2011 speech of Lee Kuan Yew. I clarified that Lee was referring to maintaining values of HDB flats with estate rejuvenation and not prices which everyone knows is a ridiculous proposition in the case of a wasting asset such as a leasehold. I also referred to the famous quote of Oscar Wilde on prices and values. Less Singaporeans be branded as a people who knows the price of everything and the value of none, I like to expand a little bit on this rather gray subject. What then is price and what is value.

One of the first to ponder about 'value' was Socrates (460-399 BC). He taught happiness did not come from ownership, but from the use of the product or service. His is a utilitarian concept. Thus value is subjective and it follows people will pay for stuff according to how good they feel about it. This is nowhere more captured than in auctions. How much is one willing to pay for the Mona Lisa, not that the Louvre Museum is willing to sell it. The painting was insured in 1962 for US$100m, so adjusting for inflation, it should be worth more than US$800m today. A Japanese businessman bought Van Gogh's Sunflower for US$40m in 1987, an unbelieveable sum back then. These paintings mean nothing to climate activists who will splash ketchup at, or glue their hands to, these paintings if they could.

Price is the sum for which the seller is willing to have to forego the product he owns or to perform a service. The onus therefore falls on the seller or business person, to have an understanding of values to buyers in order that he can price rationally. But Socrates was wrong in that utility is not the exclusive factor on which price is based. There are various other factors in the realm of behavioral sciences that motivate individual desires to spend. Top of the crop is snob appeal. A Rolex and a Citizen watch tells the same time. A Honda civic and a Bentley gets one to the church or school.

A couple of weeks ago I was having coffee with a friend. We have not met for more than a decade, so it was a good re-union. As we shared old stories there was a moment of spontaneous chuckle when we realised we frequented the same shoe shop in our younger days, and the reason it being a local cheap brand. That was the Crane Shoe shop at the junction of Cross Street and South Bridge Road. I had a new pair of Crane shoes every Chinese New Year for a decade. I still had Crane shoes on when my pay check had reached a pretty serious level. Then there was a day I was out about town when the Crane decided to split, of all places right next to a high fashion shoe shop. I had no choice but to buy a branded pair at 10 times the cost of Cranes. Of all names, it was called Mercedes. I have never heard of the brand, but just assumed it must be 'branded'. As it turned out, it was comfortable and lasted me 3 years. So I was convinced price-value-quality-snob appeal somehow are good friends.

When price is predicated on quality, it leads to abnormal market behavior. Consumers might assume the higher-priced product is the better stuff. This is very apparent in the vanity products market, but it permeats everywhere. A 99 year condo is much better quality than a HDB flat.  An expat employee is a much better staff than a local lad. If our ministers are paid a million bucks, they are obviously the best in the world.

Thinking about prices can really drive one crazy. If one is 'brainless' one nevertheless understands the 'less' is a condemnation of a lack of the grey matter. Priceless, on the other hand, denotes the object is so valuable that one cannot put a price on it. What price honour, love, friendship, loyalty.... The economic laws of supply and demand tells us scarcity drives up prices. Yet the more HDB flats that come into the market, the higher the prices climb. There is only one YOU in the universe, and yet a CECA can easily kick your butt off the company chair you have been occupying for years.

Socrates and classical economists' idea of the theory of value that determines prices got kicked in the butt by the Water-Diamond paradox. Water is a life-giving essential, thus most valuable, yet a useless piece of diamond is worth much more in price. Karl Marx and his red gang then came along to preach cost of labour underlies all prices. Everything comes from labour. Thus to control prices is to control the country, and to this end, one must control the workers. Cry 'Revolution!' and let's organise the proletariat against the bourgeoisie and paint the town red. When the East has turned Red, and Mao Tse Tung started paying doctors and road sweepers at the same price, things didn't seem to work. Free economy thinkers came along, with people like Adam Smith and his book Wealth of Nation.  Free doesn't mean goods are given away freely. It meant let the market decides. Let the factors of production find it's own equilibrium. Given the tug of supply and demand, there will be a right price for your products. John Maynard Keynes then appeared and said bs to prices. Doesn't matter the prices. We can spend ourselves out of the miseries in times of economic depression. And so here we are, our sense of values and utility of products and services remain basically the same, but the prices of everything are sky high. All the sea shells in the world today cannot possibly pay for an apartment in Nathan Residences.

Despite the lofty positions of economists, price remains the domain of the marketers. Smart alecs that they are, technology allowed them to hijack Socrates' idea of value-in-use to price products in a new sharing-economy. You don't have to pay a high price for a car or a bicycle, for example. Internet technology now allows transactional cost to be lowered to enable the sharing economy. Pay-as-you-use scheme is in it's novelty phase. Will it become mainstream? It may if Klaus Schwab has his way of making us 'own nothing and be happy'.

Increasingly, smart marketers are applying behavioral sciences to their work. Particularly high tech data capture can now supply broncobytes (one bronco equals one quadrillion terabytes) of data which big data analytics can make sense of. Data is now of great utilitarian value in price setting. Thus the rise of big techs as data or information is king. Marketers now have more ways to set prices. Take for example the concept of multi-product pricing. Various related products can be packaged together and sold under a single price. This is called bundling and can be seen in pricing for electricity and telecommunication products and services.  The travel industry is full of these packaged products.  A primary advantage of bundling is the price of one allows the sales of lower quality, or lesser in demand products, to be passed off to consumers.  Singapore is the only country in the world to apply bundling in politics. The GRC or Group Representation Constituencies is a scheme to elect 5 candidates on a single ticket, the original objective being to ensure minority representation. This bundling scheme thus allows neophyte, lackadaisical or lesser known candidates to ride along the coattails of bigger guns in an election and get helicopter-dropped into positions of political power.

An interesting use of behavioral science in marketing is what is known as 'number anchoring'. Marketers provide 3 products priced differently with different qualities, benefits or features. The cheapest is a very basic product, say at $20. The next product at $40 has much better features. The 3rd is a premium product that is choke-full of features and benefits that most people don't really need and this is priced at $300. The choice between $20 and $40 is a bit difficult to consider, but the choice between $40 and $300 is easy. The tendency is consumers will pick the $40 product. Consumers are anchored on numbers psychology. 'Number anchoring' could probably have something to do with why leasehold private condos sell like hot cakes in Singapore. In the value theory of good-better-best, there is HDB, leasehold condos, and the extremely higher priced freeholds. The 'better' numbers outperform.

 

A similar version is to get customers anchored on 'functional fixedness'. Back in 2019 the black fashion mogul Kanye West, sold his Yeezy brand "church clothes" at the famous Coachella Valley Music & Arts Festival. He had various products, most expensive was a sweatshirt at $225. He received lots of criticism for pricing way too high. In reality, his products were competitively priced with many other branded fashion ware at the festival. The problem was his stall was at a church and he positioned Yeesy as 'church clothes'. Because people has 'functional fixedness' and the psychological make up of people in relation to 'church' is it is a social thing and should be at giveaway prices.  

The mention of church leads me to 'just pricing', which is an attempt to insert moral and ethical values into pricing. Basically, it is an attempt to discourage predatory or exploitative pricing. This has led Shariah Laws to ban Riba, or interest, and Muslim scholars to introduce and codify Islamic finance. However, it is the Western Europeans which first tackled usury hundreds of years before the Muslim world. Thomas Aquinas objected to usury, as deed Gautama Buddha who long preceded him. Usury is the lending at very high interest rates. Lending at exhorbitant rates are done by loan sharks. Most countries like Singapore have banned loan sharks, but there is no usury law. States in US have their own usury laws which impose a maximum interest rate for lending. 

The PAP has delivered on the promise of home ownership, quantitatively in early years, and qualitatively in current times. The generation that knows what it was like to live in houses with raw earth for floors, communal taps, exterior bucket toilets and kerosene pressure lamps, and then to upgrade to granite and marble floorings and other trappings of modern living, do not take things for granted and remain appreciative. Post Merderka generations have higher expectations. Singaporeans may not know about the value theory of good-better-best, but they surely want stuff good and cheap.  The Urban Land Institute home attainability report 2022 (Asia Pacific) I shared in the previous blog indicated public housing HDB prices is the most affordable amongst the 31 cities surveyed, but these are leasehold real estate. The Singapore private housing is not affordable. On top of this, the denominator of household income is not qualified. Singapore household is majority double-income earners, other countries are not. Thus housing affordability based on the metric of median multiples is skewed in favour of Singapore. The situation is likely to be more dire than the statistics show. So while HDB values may not drop, there is ground for suggesting some 'just pricing' be applied to public housing flats.

Related blog : Housing Punditry - An Outside The Box View With Stuff No One Told You Before

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HDB HOUSING PUNDITRY - AN OUTSIDE THE BOX VIEW WITH STUFF NO ONE TOLD YOU BEFORE

 

“We deal with all varieties of information. Somebody’s always upset no matter what we do. We have to make a decision; otherwise there’s a never-ending debate.” ~ Sergey Brin

In the 1960s Lee Kuan Yew made the decision to go big on public housing via the Housing Development Board to overcome the problem of massive homelessness. The HDB built world record numbers of public houses sold on 99 year leases. The primary reason for selling as leasehold instead of freehold was to introduce a cheaper form of real estate. There is also the simple matter of the Laws of Entrophy. One cannot expect the HDB buildings to stand forever or even 200 years. Decision made, problem solved, Singapore became one of the countries with the highest home-ownership rate, and everyone was happy as their big ticket asset appreciated in a fast rising economy. 

Decades on, when vast numbers of HDB leases have passed the half-way life, and the market appreciation curve dips into negative territory, the reality of diminishing residue value finally bites. This is exacerbated by, in my opinion of long ago when I was in my mid-twenties, a policy error of allowing the use of CPF pension savings to pay off mortgage loans. This policy leads to the inevitability of both a diminished retirement fund and lease value. Back then in the 70s, I understood there was no free lunch. If you use your pension money to pay off mortgage loans on a wasting asset, you better build a separate retirement fund. It was for this reason that I returned my first HDB flat to the government in late 80s before the 5 year minimum occupation period and bought a low end freehold property.

There is a rising tide of anger in the HDB heartland on 3 core issues:
Firstly, Singaporeans believed they were sold a lie that they owned the property whose values will never depreciate.
Secondly, public housing is now extremely costly.
Thirdly, the question of government (SLA) selling cheap land at market value to HDB thus profiting at the expense of Singaporeans.

Is it a matter of unmet expectations or grounded on real situation of vast majority of folks? Tis the season of public housing punditry. Differing opinions, thoughts, ideas and suggestions help to move our national debate. A censorious approach does nothing for all, whether from officialdom, critics or supporters of government programmes.

For a non-partisan, non-confrontational way of discussing the topic, I recommend the op-ed of Bobby Jayaraman in Sudhir Vadaketh's Jom Media which serves as a summary intro for those not familiar with local context and the latest salvos fired by both sides of the aisle

"A fool is someone who knows the price of everything and the value of nothing"... Oscar Wilde

A thousand apologies for what I'm going to say is bound to hurt the feelings of many. In fact, based on the many blogs I have written which have been critical of the government, many will say I sold out. I have consistently said I am critical on issues. I am not a blind critic. It's a good place to quote Oscar Wilde as many do understand what he meant.


HDB LEASEHOLDS DEPRECIATE TO ZERO $ AND LKY NEVER LIED

The complaints on the depreciating value of HDB leaseholds seem like a mob of disgruntled buyers trying to hold the seller to a material misrepresentation. They are holding the government to account for the perceived "big lie" of Lee Kuan Yew who said in 2011 the value of HDB flats "will never go down".

Yes, LKY did say that. You can read the transcript of his 19 Mar 2011 speech here for context. What is not shown in the transcript is the first few seconds of his intro where Lee said "... 85% are HDB heartland homes. We intend to keep the values of these homes up, it will never go down." Interestingly the government archive transcript omitted those few seconds. Imagine that, even LKY got suppressed! In my socmed discourse, the things I hate most are rude interjections by clueless commenters of "where is your proof". As bloggers, ours is not a dialectic study but mere sharing of opinions. Ours is not here to show proof of anything. Do your own research and enrich yourself. However, it would be different if one should ask "can you please show me any links to where you got the idea from?". In any case, I drop the 10 sec video clip here for proof and posterity and to preempt a POFMA.

A leasehold is a wasting asset. It would be insulting LKY's intelligence to suggest he never knew a leasehold gets written down over the years to zero. In the context of his speech, he was referring to how the government will always try to keep values up by constant rejuvenation of HDB estates. He never promised the prices will always go up.

All those writers in socmed who continue to complain they bought a home that will be returned to the state, I do pray they stop insulting their own intelligence. A leasehold is what it is. You are in effect a very long term tenant is all that is to it. You signed on the dotted line on a piece of paper called Lease Agreement. Let's stop showing the world HDB heartlanders lack the basic intelligence. More importantly, opposition politicians should stop this narrative. It is not helpful.

Now for those who try to preach some equity in lease extension or the provision of some residual value, that's an entirely different matter. It's an area open to debate and persuasion. If I were an opposition politician, I would want to own that platform. But please, I do declare I hold no political aspirations.


IS PUBLIC HOUSING VERY EXPENSIVE?

All things are relative. We can compare to other countries, or we can compare over time. For the price of a brand new 4 roomer HDB, one can buy a detached house with a swimming pool, larger built-up, freehold, in any of the cities in the National Capital Region of Philippines. My parents first 4 roomer in Henderson Crescent cost us S$16,000 back in mid 70s. But all these comparatives mean nothing because of complex economic inefficiencies that affect different time and space.

The one metric that is used for comparison is affordability. Housing affordability is a metric based on  household income in relation to housing prices.. The affordability metric for country comparative is not useful due to the problem of agglomeration diseconomies. Agglomeration means a collection of various things, and in this instance it refers to various factors such as cost of living, land use regulations, corruption, inflation, etc. Roughly speaking, it means at country level, the parameters are subject to too much economic inefficiencies to be meaningful for comparison. However, comparatives across cities of relative economic development do give a sense of the status quo. I share 2 recent reports and you can determine for yourself whether Singapore housing and HDB flats are affordable.

(1) Demographia International global survey on housing affordability 2021 Q3

Median Multiple (MM) is the median house price divided by the gross median household income (pre-tax). This report measured 92 cities across 8 major countries (US, UK, Australia, Canada, Singapore, Hongkong, Ireland and New Zealand). Singapore was placed 53rd with a MM score of 5.8 as compared to Hongkong which was most expensive ranked 92nd and a score of 23.2 MM. Pittsburg PA of US was most affordable with a score of 2.7 MM.

According to Demographia Intl. Singapore’s MM rose from 4.6 in 2019, to a severely unaffordable 5.8 in 2021, reflecting the impacts of the pandemic shock.

Read the full report here.

(2) Urban Land Institute home attainability report 2022 (Asia Pacific)

This is a good report in that HDB was a participant, thus public housing data was available. With an MM of 4.5, HDB was the most affordable across the 31 Asia Pacific cities studied. Singapore private property (both freehold and leasehold) had MM of 13.3 is on the high side ranked 13 out of 31.

Check the full report here

What a household spends monthly on housing takes up the biggest chunk of their income. However, the two parameters of household income and housing prices do not provide the qualitative aspects, for example freehold versus leasehold, unit sizes, quality etc. Nevertheless Median Multiple does provide a sense of affordability for comparison purposes.


CHEAP LAND COST & HIGH MARKET PRICES GIVE SLA HUGE PROFITS?

Let me address this point by point as raised by various folks.

1. Government forcibly takes away land from rightful owners (TRUE)

Every country in the world practices eminent domain which is state confiscation of land for national development purposes. Some does it constitutionally, some has no legislation about it. Some provide compensation, some don't. Singapore is no different. Singapore land acquisition is now governed under The Land Acquisition Act 1966.

2. Land acquisition is for national development (NOT ALWAYS TRUE)

Land acquisition is for national development which is for the bigger good. It is mainly used for public housing and infrastructure. However, under mix-use schema, some parcels of acquired land are sold for private development. This goes against equity as it is redistribution of land from rightful owners to some private wealth.

3. Government is the biggest land banker due to land acquisition (FALSE)

Yes, the government owns the most land in the country. But I like to highlight a mistake in the Jom-Media op-ed by Bobby Jayarama. He said ".. the Land Acquisition Act of 1966, which empowered the government to acquire private land compulsorily, helping it become by far the biggest landlord in the country, owning some 80 percent of land today". A substantial part of state land comes from land reclamation.

4. Government acquired land cheap (FALSE) and sell to HDB at market rates, making huge profits (TRUE)

In the distant past, owners were forced to give up their lands for peanut compensation. A little fun digression here. Long ago in the 60s, lots of corruption in the land acquisition field work. Men from helicopter come (the big guys) had blinders on. Cheng hu tuay gu (government officials) advised villagers will be compensated $500 for each fruit-bearing tree. Suddenly everybody started planting trees diligently. 2 or 3 years later when the acquisition process rolled out, villagers made handsome gains. Cheng-hu (government) had no database and land survey in those days. Then a bright civil servant realised the newly formed airforce had done area mapping of the island a few years earlier. Sorry to all those Ah Pehs, the photos showed no fruit trees earlier. Kindly return the compensation to the coffers.

In 1966 Law Minister EW Barker initiated the Land Reclamation Act. Since then, owners whose land were acquired have been compensated at market rates.

When the government sells land to HDB years after acquisition at current market rates, there is substantial profits since valuation has risen. But huge land bank comes with huge carrying cost. Just because government accounting does not input carrying cost does not mean it's free. Don't just look at historical cost and forget the cost of capital.

So folks, let's sober up. The land is cheap when you look at it today based on historical cost. But it was not cheap at the time of acquisition, it being the market cost at the time. The huge profit being the difference of today's market price less historical cost also needs to be tempered with the huge carry cost. Be fair to Caesar.

5. When the government sells land to HDB, there is no change in 'past reserves' (TECHNICALLY FALSE).

The way Desmond Lee, minister for national land development, explained is like this. Land is held in the books of Singapore Land Authority. Land appreciates while it is in the books of SLA. The land is considered 'past reserves' under the constitution. So when SLA sells the land to HDB at market rates, there is no increase in past reserves.

The minister is technically wrong because government accounting works on a cash basis. If the land was acquired in say 2015 at S$100m and in 2022 it had risen to S$150mm, it would still remain in the books of SLA at historical cost of S$100m. When SLA sells to HDB at market value of S$150mm, it made a realised capital gains of S$50mm. This gets into the accounts and 'past reserves' goes up by S$50m.

So here's something to ponder over if we want to bitch over the legalities. It was a previous administration that acquired the land. But the current administration sold the land and realised the S$50m cash gains. Is the S$50m legally 'past reserves' as defined in the constitution?

6. HDB makes huge losses due to the subsidies to buyers (TECHNICALLY FALSE)

Accounting wise, this is technically false because HDB is covered by government grants for these subsidies. The grants come from the government's fiscal spending. For year ended 31 Mar 2022, the subsidies for the year was S$849m.

HDB makes billion $ losses every year. In addition to the subsidies, there is usually another big ticket loss shown in the accounts which is also covered by grants out of the government budget. This expense line is "Provision for losses on land development". For 2022, this loss was more than S$2B. I have no idea what this is. It's not easy to interpret the HDB financial statement. I think it has something to do with the timing of release of development cost to match project completion.

7. Why not have SLA absorb the subsidies? (NO CAN DO)

Some suggested (Chris Kuan?) SLA could simply sell to HDB at market value less subsidies. That way, no losses will appear in HDB. This cannot be done for 2 reasons. (a) SLA would be fiscalising past reserves, which is against the constitution. (2) It is impossible on practical grounds because subsidies are buyer and house-type specific. This info is not available at the time of sale of land to HDB.

8. The government can increase subsidies to reduce the high cost of HDB flats (THIS IS BASTARDISING OCCAM).

The strongly held view is cost of living is very high, salaries have not grown, cheaper foreign labour have edged Singaporeans to lower paid jobs, HDB housing prices skyrocketed, land cost is a big chunk of HDB prices, government land is very cheap based on their historical cost. So why not reduce the price of HDB flats. There is no real lost to the government since SLA made massive valuation gains. It is only an opportunity cost.

It's a complex situation. But most folks' simple Occam solution is increase subsidies. Do you really think it is just an opportunity cost to the government, that land is so cheap to them, they can simply lower HDB prices and suffer no real losses? Well, there is no free lunch. Somebody is bearing the cost of these subsidies. Why should my village friends who got chased off the land subsidise your HDB apartments? It is a moral issue of equity.


THINKING OUTSIDE THE BOX

The government should tackle both the supply and the demand side of the public housing market. Here's some food for thought.

HDB is tasked to offer cheaper public housing and this was to be accomplished in 3 main ways. (1) Mass production lowers unit cost of HDB flats. (2) Central planning and admin lowers the marketing cost. (3) 99 year lease differentiation justifies lower prices than private freehold properties.

Here's a trifle that most people do not understand. Cost of construction between a private condominium and a HDB block is comparatively marginal. So why do private condos appear so glam and HDB so mediocre? It's a sociology thingy. HDB is meant for the lower end of the market, so it has to be seen to be less glam. It has to appear Lower price, Lower quality. Having said that, over the years, HDB has improved design esthetics to meet expectations.

If you like to have an idea of building cost, click here for a 2014 info. So far back. Can't help it, such info is hard to come by. Psst it's from a banned site which has been taken down. You will be looking at a web archive.

On the supply side, the government started off with the right philosophy for public housing, but executive imagination stagnated for decades with consequential tectonic shift in our economy that is never addressed. What do I mean by this? HDB pricing was supposed to follow the private housing market, but priced lower in part due to lower quality and its leasehold status. Over the years, it has been flipped around. The private housing market is influenced by HDB pricing. This circular pricing influence tends to go one way - up the rungs of Jacob's Ladder. REITS became the darling of investors and rentals grew hot, boiling the market, cooking Singapore into a renter economy. Since rent is the major cost of doing business, surpassing even energy, its pricing impacts the economy severely. Entrenched interest in the real estate sector engenders inertia to change.

HDB, being the biggest land banker, should embrace its status and be a price-maker instead of a price-follower. In other words, HDB should price itself on some model of housing affordability, independently of how the market is. Wait a minute. Am I contradicting myself here? If HDB were to price much lower, meaning higher subsidies, surely the same criticism of social equity applies. It's the villagers who subsidise HDB buyers. True. However, in this case, the objective is not about subsidies, but market-making to address the larger issue of macro-economic management. It's the more palatable "for the bigger good" rationale. Heck, HDB should do away with accounting for subsidies which is purely a political propaganda gimmick.

On the demand side, I shall restrict myself to only public housing. Take permanent residents off the HDB resale market. PRs not only increase demand substantially due to the large numbers, but many of these are from upper middle class and business owner class. They have the fire-power to push the market up. Admittedly, I have no data. But it's a no brainer taking the PRs out of HDB resale market will put a dampener on prices.

I am no Liu Wencai, the most hated evil landlord in the Mao Tse Tune era. (Actually, this evil stereotype landlord was a Communist Party propaganda creation to move their class struggle agenda. Liu was just a landlord protecting his interest). I suggest a way out for the PR debacle. HDB can set up an agency to handle a special HDB resale market segment specifically for PRs. This agency buys back HDB units from the resale market at open market rates, and maintain a small inventory for selling to PRs. A parallel HDB resale market for PRs can be allowed. To differentiate the products, the HDB may play around with the lease duration, shortening it to 5, 10, 15, 20 years etc. This may be advantageous to PRs who don't have a longer time horizon here. A further benefit is the management of the inventory allows the government a tool to control demographic patterns and avoid racial niches of PRs to develop.


CONCLUSION

The government should encourage public debate on issues such as this for its national implication. Issuing POFMA and scaring the shit out of well-meaning Singaporeans is not the way to go. There may be some smart professors in academia, or some smart alec undergrads, or just about anyone, who have some ideas but are dis-incentivised by POFMA. For example, my 2 brief suggestions here could spin off and attract more detailed examination and suggestions. Ideas and designs are incremental by nature. POFMA kills this process. The government should stop making POFMA the place where ideas go to die.  If the government disagrees with anyone, such as Yeoh Lam Keong, a former chief economist at GIC, simply say so and front-page their own views, or corrections, in the Straits Times. Afterall, for the government, it is only an opportunity cost to publish in the state media.

Related blog : Lee Kuan Yew Did Not Lie That Value Of HDB Flats Will Not Drop

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CANCEL CULTURE - WHO LET THE DOGS OUT, DOES TEMASEK HAVE A HAND IN THIS, AND THANK GOODNESS FOR TRUMP

Kanye West or Ye is a celebrity, business mogul and the richest black man in the world. He's a Trump ally. The recent 'White Lives Matter' episode in a fashion show in Paris last week and subsequent interview by Tucker Carlson where Ye spewed some conservative narratives, spontaneously made him the latest enemy #1 of the leftist woketards. No siree, they cannot let social influencers project conservative views to the public. Two days after the Tucker interview, JP Morgan closed Ye's bank accounts.

We all know conservative voices are being suppressed by mainstream media and big tech who are anti-Trump and ideologically skewed to the radical Left. There are also many celebrities and social influencers who have actively participated in vicious attacks against conservatives. But let's ignore these individuals. Most are those who sold their soul to anyone who would transfer some cash into their bank accounts. It's the big corporations who are aligned with the extreme left socialist policies of the Biden admin that have the wherewithal to suppress free speech and weaponise their commercial or financial services to fuel cancel culture.

The list below are the major corporations hogging the headlines for their social activism. It is by no means exclusive. Certainly the CEO and many executives in these companies are Liberals, many of whom are taking their eyes off the bottom lines to focus on political agendas. Powerful as these group of people are, they do not have carte blanche to jeorpardise their profit mission. They do report to higher echelons. So who let the dogs out on the conservatives?

It is estimated that 1% of households in the US own 40% of the entire wealth of the country. In the equities market, several ETFs practically own the entire market. Vanguard is the dominant giant, Fidelity is second and Blackrock third. Between Vanguard and Blackrock, they took in 67% of investor cash inflow last year. As dominant shareholders of a few hundred companies listed on the stock exchanges, their power is immense.

No doubt Larry Flint and Mortimer Buckley, CEOs of Blackrock and Vanguard, may exhort the narrative that investor capital is purely to create value and not promulgate ideology. There has been growing accusations asset managers are making public statements in support of racial equity, justice and progressive Left ESG soundbites. Tobias Salinger of Financial Planning said : "Firms such as BlackRock, Vanguard, State Street, Fidelity Investments and J.P. Morgan Chase drove a wave of shareholder votes last year for environmental and diversity proposals at large publicly traded firms, to the point that two Republican U.S. senators said two of them “may be prioritizing their CEOs’ personal policy views over retirees’ financial security.”

If the fund managers are not directly and actively pushing social activism in the companies they control, they most certainly condone it.

Temasek holds 3.36% of the shares of Blackrock. It is the 4th largest shareholder. Temasek has no seat in the board of Blackrock. It thus appears the Singapore SWF is only a passive investor. Nevertheless, as the 4th major shareholder, it certainly has some clout. Does Temasek have an opinion on the social activism going on? In the counterinsurgency episode of Operation Spectrum (see my previous blog) the Singapore government, the ultimate shareholder of Temasek, has made known clearly its stand on social activism and Marxist adventurism. Tulsi Gabbard, a contending Democratic Party candidate for the 2020 US presidential election, recently resigned from her party on grounds it has gone too far to the radical left and no longer represents the principles she believed in. Gabbard sets a high bar for integrity. Where principles are no longer aligned, one either fights within the party to right it, or one cuts the bridge. Will Temasek cross the Rubicon? Very unlikely. To be passive is to acquiesce to the Marxist creep.

The cancel culture and the social divisions in US is not the work of Donald Trump. The slide to the Left in the US started the moment McCarthyism ended in the 1950s. The socialist capture of institutions and government agencies take decades. It takes years to insidiously restructure education to churn out a generation of Americans who no longer believe in God but the absolutism of liberalism of individual rights. Obama era was the culmination of identity politics, the cauldron to tear the traditional social structure down. Obama's identity politics lie at the root of today's social and cultural divide, a chasm that now seems irreparable. The Democrat Party is now a socialist party, sliding into authoritarianism with the weaponisation of security agencies and judiciary. The Left's claim of fascism against Trump is the age-old tactic of the Leninists and Maoists to accuse the opponent of the very things they themselves are guilty off. Obama came within the cusp of turning the US socialist. Hillary Clinton could have tipped the scale over. Unfortunately for them, a Trump presidency was the greatest discruptor they never anticipated. Hence the vitrolic animosity at the orange mop.

Trump's presidency forced Leninists and Maoists to come out of the woodwork. That is why activism for critical race theory, transgenderism, pronouns, pro-abortion, open borders, gun control, normalisation of pedophile, defund police, no cash bonds, and many other identity issues, all exploded into the open. These people are now publicly identified. The advent of Trump caused the Left to fast forward their plans at a time when their ground is not ready. The demographics have not yet shifted in their favour. Today, Liberals form only about 25% of the population. There is no way they can win at the ballots except by cheating and bringing in illegal immigrants. Biden's policy failures, particularly in the economy, is now swelling the GOP poll numbers amongst the independents, the youths, Hispanics, blacks and browns.

The groundswell to the conservative Right comes with it the power of the consumers to fight back corporate social activism. Mainstream media are all in trouble with disastrous drop in subscription and membership. Fox News is doing well mainly on the backs of programmes hemmed by conservatives such as Tucker Carlson, Guttfeld, Jesse Water, Dan Bongino and a few others. The management remains woke. The rest of media aren't doing too well. Mainstream media has lost viewership to podcasters like Joe Roegan and many other conservative sites like Infowars. CNN is in so deep trouble that CEO Zucker, the epitome of liberal hack, has been sacked. Netflix flexed their cancel power muscles, and conservatives left them dangling in survival mode. Twitter's bearded one is long gone. Zuckerberg no longer has the money to pump into the mid-terms election like he did in 2020. Disney has lost their municipal powers and visitors. And the latest, PayPal, had to walk back their damning autocratic move to deduct US$2,500 from the accounts of users for posting anything they deem misinformation. The avalanche of users pulling out their deposits hit PalPal's liquidity. To prevent from sinking under, they had to resort to delaying tactics to slow down the withdrawal with hahaha, misinformation about administrative hitches and miscommunication. To show how low they can go, the account cancellation option was shamelessly deactivated to keep users fro leaving the platform.

Go woke Go broke is a truism. The following charts show the valuation losses of these companies as their share prices plummeted.

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OPERATION SPECTRUM, KLAUS SCHWAB, LIBERATION THEOLOGY -- NOTHING IS WHAT IT SEEMS

Singaporeans woke up on 21 May 1987 to read of the news the Internal Security Dept had arrested 22 youngsters from disparate groups of social workers, lawyers, artists, church helpers, and students accused of participating in a Marxist plot to topple the government. This was the infamous Operation Spectrum. The inhumane treatment of the innocent 22 social activists for months, and a couple of years for 2 of them, continues to float up in social media to this day.

As an opinion piece, I need to express where I stand on the matter. I do not condone the harsh treatment the group was subjected to. But let me be clear. I am not against harsh treatment as an interrogatory process by security agencies where national interest is at stake. In this incident, it was apparent from the very beginning, the youngsters were innocent of the claims against them. However, I feel strongly that Lee Kuan Yew was absolutely correct in his assessment of the potential of an underlying national threat. 

After all these years, my younger brother recently quibbed that he squirms at my long winding perihrastic way of telling a story. No one was kind enough to ever tell me the errors of my ways. I had always find it a necessity to mesh and weave connected thoughts to project a narrative for more perspective and flavour. So here I am, trying to share some personal views and I need to link Klaus Schwab, Operation Spectrum, and Liberation Theology into a whole.

This image of Klaus Schwab has been floating across social media platforms. Millions simply rely on what their friends share as the truth, that the father of the World Economic Forum chairman is a high ranking Nazi German officer. In other words, he is from a scumbag family.

This image is false. This is not Eugen Schwab, but someone identified as Major General Walther Dybilasz. The Schwabs are German nationals but Jews. Eugen Schwab was never a Nazi. I first saw this dis-information in a 2014 Telegram feed of 'Healing the divide'. That's right, it's Iris Koh. Actually, it was someone who shared on Iris' feed. In today's terrible information mess, we must have a responsibility to make some effort to share only what is true to the best of our knowledge. But I understand, if one tries to google Klaus Schwab, there is very little one can dig up. Except that which he, and the beholden media and high tech, want us to see.

From my research, this much I know. Klaus is not what he pretends to be - part of a world leadership class trying to build a brand new world for the betterment of humanity. During the war years, his father Eugen, managed a Swiss-owned company called Escher-Wyss. The company was headquartered in a town called Ravensburg in Germany. It was a golden model company in Hitler's very good books because they produced critical military hardware parts and huge hydrogenerators for the Third Reich. One very dark side -- they produced hard water that was necessary for the making of plutonium. So Eugen Schwab almost could have helped Hitler to produce the nuclear bomb and won the war. On top of that, Eugen Schwab was using slave labour from Nazi prisoners-of-war. The fruit didn't fall far from the tree. As a brilliant engineer, Klaus eventually worked in his father's company. There he managed a secret project that helped apartheid South Africa to develop 7 nuclear weapons in contravention of UN sanctions. (In 1989 South Africa voluntarily gave up their nuclear capability after having achieved it). The Schwabs have no qualms in helping genocidal and intensely racist regimes to develop nuclear capabilities. Does a man who heck cares if the world gets blown to bits in a nuclear holocaust really concern himself with climate change issues? Does a family who supported a diabolical maniac in pursuit of genocidal acts against their own race hold any values of compassion for humanity?

And I shall return to Klaus Schwab, bear with me.

Things are never what they seem. It's true of Klaus Schwab, and so too Operation Spectrum. The 22 so-called Marxist subversives were not even actually one organised group, but youth social and church workers from different Christian organisations. The authorities claimed one Vincent Cheng was the group leader, and the mastermind was Tan Wah Peow.

Tan is an ex-president of the Singapore University Student Union who fled the country in 1976 after a trumped up charge of rioting. It was a celebrated case where Tan suggested the main witness was a corrupt National Trade Union chief Phey Yew Kok who fabricated the charge. Incidentally, Phey himself eventually fled the country under suspicious circumstances. Tan lives in exile in London. The curious case of pulling in Tan's name was, I suspect, to build credibility to the claim of a plot to agitate the ground. Tan was a student leader who in his hey days championed workers' rights too aggressively, to the chagrin of an authority that puts industrial peace on the altar of economic advancement. The years preceding the arrest was a time of economic slow down, with rising unemployment and workers being let go. Some of the 22 youngsters were actively representing workers' grievances just like Tan was doing some 10 years earlier. Industrial unrest is the one thing the government will muster all it can to nip in the bud.

Practically no one in Singapore to this day believes Vincent Cheng and Tan were leaders of a subversive group. In any case, this is passe although we do still see the un-informed griping in social media about the non-Marxist connection. Lee Kuan Yew himself said he knew they were not subversive elements, but a group of 'do-gooders' who unknowingly got entangled in a bigger and dangerous agenda. LKY also dismissed Vincent and Tan as naive parties. The fact remains these social workers were detained for months and intensely interrogated, and some claimed they were tortured. Confessions were extracted for early release. To add to the high drama, 2 lawyers representing the detainees were arrested. One of these was Francis Seow, a prominent, eloquent and rising opposition figure, was arrested at the Internal Security compounds when he arrived to see his client Teo Soh Lung. Seow was himself thrown into the cells where he languished for more than 2 months. I think the arrest of Seow was simply political because Operation Spectrum had provided him a public platform, something that LKY will never tolerate.

Great was the injustice done to the 22, but there was not a single voice of dissent from the ruling party. That is the danger of the moral hazard of million dollar salary elected officialdom. But I think, in all honesty, in their private discussions, there must have been some dissent. Minister Tharman himself was subjected to intense interrogation by ISD. Foreign Minister Dhanabalan, to his full credit, took the righteous step of resigning from his cabinet post because he felt strongly what was done was against his personal values.

"So you think you can take on and bully the second-generation leaders? Well, our job is to make sure that you do not succeed. We are here to neutralize. You know, to neutralize you!" (ISD to Francis Seow in his book To Catch A Tartar)

If LKY himself had thought from the very beginning the 22 were innocent, why then the harsh treatment? For the answer, one needs to understand how LKY works. Lee is a cunning man and a man of strategy. He zooms in on the core issues and makes the primary decisions. Of the peripherals, he is basically hands off. He has said if you were his subordinate, you should know what he wants and act accordingly. You don't need to be told. If you don't know what he wants, you should not be deserving of the job. That discretion for underlings in a situation such as this, creates on the one hand, the drive for officials to do their best to do the worse to please the boss, and on the other hand, to absolve Lee on any legal challenge for abuse of human rights or other wrongful acts as no direct instructions came from him.

As far as LKY was concerned, his targets were 4 Roman Catholic priests. Edgar D'Souza, associate editor of The Catholic News and press liaison officer of the Church; Joseph Ho, chairman of the Justice and Peace Commission; Patrick Goh, national chaplain of the Young Christian Workers' Movement, and Guillaume Arotcarena, director of the Catholic Centre for Foreign Workers. These 4 held persuasions for what is known as Liberal Theology that was popular amongst progressive clerics. It would have been easy for LKY to simply demand that they be removed, but he had to consider backlash from the Christian community as well as many of the faith in both the party and the government. Francis Seow painted Lee a good Machiavellian, and true to form, the Prime Minister created the crime to fit the charges for the outcome he desired. Create a high drama of serious immediate Marxist insurrection to force the Roman Catholic Church to clean up their act, and provide the theatre to educate the populace. When the dust was settled, the 4 priests departed from Singapore.

Just what the heck is Liberal Theology all about. This lies at the heart of seminarians, a struggle to live a life in service of the Lord or to serve the poor and oppressed. Progressive clerics seek to apply religious faith by aiding the poor and oppressed through involvement in civic affairs. In basic terms, liberal theology is a process of conscientising, or raising the consciousness, of the poor, oppressed and marginalised to a level that they can understand the nature and extent of their marginalisation and oppression. It is a path that will traverse political trapdoors and inevitably to collision with the state. Indeed liberal theology led priests to take up arms against corrupt regimes in the jungles of Latin America in the 60's to 80's. Honorable their hearts may be, these progressives fail to comprehend the life of Jesus was all about saving our souls. He is clear about the difference of spiritual and temporal needs. Did He not chose to give to Ceasar what belonged to Ceasar? Unfortunately, the same lack of comprehension behind Judas Iscariot's disappointment in the Lord is driving the faithful in liberal theology in current times.

The political threat of liberal theology comes in 2 ways. One is decentralisation. It's doctrine is about living amongst the poor. The church need not be the focal. People should organise everywhere outside of the church and thus enhance membership numbers. The British Intelligence and LKY himself are too wary of what all these means. It is the same old community organisation of the Malayan communists of Chin Peng.  Second is ideology. LKY himself mentioned there was no eminent danger in that there was no ideology behind the work these activists were doing. However, the danger laid in the capture of the organisation by ideologically driven interests which history provides ample examples.

LKY pointed to the People's Revolution of Philippines the year before. The Roman Catholic Church in Philippines, under the leadership of Cardinal Sin, had played a critical role in galvanising ground support amongst the laity. That the outcome of the revolution in displacing a despot is righteous, is besides the point. Lee was wary of liberal theology leading to un-elected political power of the church and its abuse of that power.

Without perspective, Singaporeans are generally unforgiving in my view that LKY's perception was right on the bull's eye. One of the organisations involved was East Asia Christian Conference. In the late 1960s EACC developed what it called Industrial Evangelism as a way to empower urban industrial workers. This was seen as a service to society and it required the setting up of many independently run Urban and Industrial Missions (UIM). To help organise themselves, EACC sought the assistance of Saul Alinsky who despatched his assistant Ron Fuyiyoshi. For those who do not know, Alinksy was a famous management guru well known for his social organising skills. He developed a technique he called Community Organisation. Alinsky gained fame for tactics that honed Barrack Obama's social organising skills which helped him win him the presidency. Hillary Clinton too had some tutelage from Alinsky. What was controversial about Alinsky was his confrontational and radicalism doctrine. Those from the political Right claimed Alinsky was basically a communist and his infamous book Rules for Radicals have been compared to the Communist Manifesto. Today, if you survey the US scene, much of the way of power-capture by the Democrats and Liberal Left, appear to have come right out of the radical teachings of Saul Alinsky. And behold the damage it is now causing the US.

Meanwhile in Singapore, Fuyiyoshi had his work cut out for him. Sometime in 1971 Vincent received coaching from Fuyiyoshi on Community Organisation. In latter days, Vincent in turn passed on Alinsky's teachings to other activists. In 1973, the government refused to renew Fuyiyoshi's visa. The government's displeasure with UIM was quietly relayed to the church which eventually discontinued the enterprise. In the aftermath of Operation Spectrum, EACC was also banned from Singapore.

Looking at the political, social, cultural and economic dysfunction in the US today, of which Alinsky's teachings that advanced radicalism and social divisions, lies at the very heart, LKY's tough love, the ability to see danger 3 to 4 steps in advance, and the gumption to make tough and unpopular decisions, has probably spared Singapore much problem.

No inference is made to lay the blame on the Roman Catholic Church of Singapore. It is a case of Father, they know not what they do.

The term liberation theology came from Peruvian priest Gustavo Gutiérrez, who wrote A Theology of Liberation in 1971. The book became the guiding light for an increasing number of progressives within the church. But what kicked off this explosion of liberalism was the Second Vatican Council between 1962 to 1965. Some see the outcome of Vatican II as the Roman Catholic Church trying to grapple it's role and engage with the modern world, some see the germination of socialist idealism the result of infiltration by communist elements. Vatican II was a paradigm shift in church thinking with a pivot towards embracing the temporal. Liberation theology and its way of community organisation took root in many poor third world countries and those under oppressive regimes, with some local deviations. Mexico, Latin American countries, India, South Korea, and Philippines all have their versions of liberation theology.

“When I give food to the poor, they call me a saint. When I ask why the poor have no food, they call me a communist.”
― The Red Bishop, Dom Helder Camara,

To circle back to our story, I now spotlight one key character - Bishop Helder Camara. It is always sexy to talk about helping the poor. Heck one can even put on a great show of living amonst the poor, of championing the poor against the guns of generals. That's the public persona of Father Camara. Remember, things are always never what they seem with all these public figures. Early public life in 1930s before WWII, Camara was a senior official in Acao Integralista Brasileira, an intergralist movement with fascist tendencies. They were ultra right militants that marched in the streets apeing the Nazis in Germany. At Brazil Catholic Centre, he influenced the organisation to flip to the Left. He was enthusiastic of the success of the Cuban Revolution. He sang praises of Mao Tse Tung and proposed the admission of China to the UN at the expense of Taiwan. In 1969 at a Catholic convention in New York, he chastised the anti-Soviet stand of the United States. It was from this event that he earned the nickname The Red Bishop. He protected Belgian priest Joseph Comblin in a huge scandal in 1968. Comblin was based in Brazil and working in a seminary in Recife under the auspices of Camara. Father Comblin had written a plan on subverting the government and creating a new state of the people. This was leaked to media. Not surprisingly, details sounded familiar to soundbites coming from the World Economic Forum, such as abolishment of private property, total equality thus no organisations of hierachy allowed (means classless, means abolishment of church), a dictatorship of the people with power to muzzle the indolent (means if you don't toe the line, your're out, if you are retarded, sickly, incapable of work, you're out -- remember Hitler?), media censorship, abolish the army, establish peoples' court (remember the excesses of Stalin, Mao Tse Tung, Pol Pot?), use of violence if necessary to execute objectives, etc. (I have not been able to authenticate these details). Camara has voiced his disagreements to the stand of the Catholic Church on key issues of divorce, women priests, and contraception.

The magisterial documents that came out of Vatican II incorporated much of Camara's views on reforms for the church. The Liberals won and the Conservatives lost. On the last days of the Second Ecumenical Council of Vatican meeting in Rome, Camara led 42 liberal priests into the secret underground of the Vatican City to sign what is called the Pact of the Catacomb. The priests pledged to live a life of poverty and renounced material attachment. It was a pledge against worldliness. Remember, it is never what it seems. It was a side promotional stunt demonstrating Camara's view that Vatican II did not go Left far enough to put poverty in the center of church's mission. Pope Paul VI did not want to have anything to do with Camara's stunt because it was in effect an attack against Capitalism.

I know your impatience. Wait, what has these all got to do with our story? Well, dear readers. Here's the thing. Camara, one of the most radical and controversial Roman Catholic bishop, who was extremely impressed and influenced by Father Gustavo Gutiérrez's A Theology of Liberation, is himself adored by the most troublesome man of our times.

See how Klaus Schwab literally gushed over Camara. The Red Bishop had a profound impact on the man who is trying to change the world today. Schwab has brought Camara to speak at WEF conferences at Davos many times. And the rich and famous have since then all fallen in love with The Red Bishop. But wait, how can Liberal Left godless money-centric elites love a poor man of God? They like his ideas of Liberal Theology.

Now I want to bring you readers all back home. And the point I want to make is this:

BACK IN 1987, LONG BEFORE LIBERAL THEOLOGY DID HARM IN THE ROMAN CATHOLIC CHURCH AND SAUL ALINSKY INSIDIOUSLY COLLAPSED THE GREAT USA, LEE KUAN YEW HAULED UP 22 INNOCENT SOCIAL ACTIVISTS AND CAUSED 4 PROGRESSIVE PRIESTS TO LEAVE SINGAPORE BECAUSE HE SAW THE DANGER AND ACTED LONG BEFORE ANYBODY ELSE.

BUT TODAY, OUR GOVERNMENT IS GOING TO BED WITH THE GLOBALIST ELITES OF WEF AND KLAUS SCHWAB WHO HAVE MADE IT PUBLICLY CLEAR IN THEIR SPEECHES AND WEBSITES THAT THEY PURSUE AN AGENDA THAT IS BASICALLY SIMILAR TO THE SAME UNDERLYING DOCTRINES THAT LKY THREW OUT IN 1987.

Conclusion:

I think the harsh treatment of the 22 young social activists in 1987 was wrong. I think the arrest and detention of Francis Seow was politically-motivated and unconstitutional. However, I think LKY assessment of the danger was spot on. Operation Spectrum was a counterinsurgency operation but not against an immediate plot. I think LKY considered the unfortunate circumstances of the 22 activists as a sacrifice to resolve the wider issue of real potential national security, which at it's core, was a Marxist threat. And lastly, I think what the government is doing today in cozying up to the globalist WEF is a total betrayal of the sacrifice of the 22.

In case anybody has the notion the idea of Liberal Theology is some crap talk by some creepy folks in medieval frocks, I'll leave you with some words, in these creepy folks' own words, what it's all about:

Brazilian Father Leonardo Boff : “What we are proposing is Marxism and historical materialism in theology.” (In case you don't know, 'historical materialism' is a core Karl Marx thingy)

Peruvian Father Gustavo Gutiérrez : “What we mean here regarding liberation theology is the involvement of the revolutionary political process....... Only by going beyond a society divided into classes. ..... Only eliminating private property of the wealth created by human work, will we be able to lay down the bases for a more just society. It is for this that the efforts to project a new society in Latin America are tending more and more towards socialism”.

Well I don't really know much, except that every time I hear demagoguery about a brand new world, nothing good comes out of it.

And Vatican II pure and simple, is a turning away from the spiritualism of God and towards anti-Ceasarism, under the guise of 'living with the poor', to create a new world order similar to what Ceasarism is all about - an authoritarian or autocratic political philosophy. See what I mean? Nothing is what it seems.

It is well known then Bishop Ratzinger opposed a lot of the socialist ideas in Vatican II. Perhaps the growing power of progressive Bishops eventually forced Ratzinger, as Pope Benedict XVI, to resign in 2013. In came the Jesuit priest Francis, the Pope of the poor. It then becomes clear all the crazy stuff that Francis has done and continues to do. Francis has now aligned the church with the Great Reset agenda of the globalist technocratic elites. Just as in the US, the reticence of the conservatives for decades allowed the advancement of liberalism and their capture of entertainment, educational, and federal agencies, the Roman Catholic Church has a parallel journey. The conservatives lost and progressive liberal clerics won. Today, Pope Francis is Camara's man in Rome. He is aligning the church with the Great Reset of Klaus Schwab. The Pope of the Poor has turned the Roman Catholic Church into what Michael Matt from Remnant TV calls a 'soup kitchen church'. If you were to google Camara, you will see the horror. Big tech, media, liberal clerics are pushing for the beatification of Father Helder Camara, The Red Bishop.

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