MAS-NUGAN HAND LICENCE, FTX, ELON MUSK-TWITTER ALL TRUMAN SHOWS?

A caveat : The events you are about to read are true. The evaluations are purely my imagination extended from my humble worldly knowledge.

The Truman Show was a movie about a world of simulated reality. The protagonist Truman Burbank was played by Jim Carey. Truman was raised and lived in a huge movie set that was his entire world. He never knew he was living in a created world and his daily life was streamed as a reality show. Everything around him was false.

Of course, not everything in our world is false. But internet has unmasked much concealment and we have glimpses of reality every now and then. Often when we let imagination run wild with our skepticalg minds, we enter the realm of conspiracy theories and see shadows lurking. Then again, many conspiracy theories are actually truths running ahead of breaking news.

Back in 1978 when I was working in a bank, I had lunch with a friend one day. I shall conceal any trace to ID this friend. Just suffice to say I found him a very mysterious and mystical character given to access to some information that few have. He seems to have a knack for any subject matter that creeps up in idle conversation and acquainted either directly or indirectly with personalities referenced. I had long suspected him to be working for some Intelligence organisation. On his part, he enjoys my company because he said, unlike most ordinary folks, I could engage him in all sorts of unusual subject matter, a compliment I attribute to my scattered interests and I was widely read at the time, devouring magazines like Newsweek, The Economist, Time Magazine, Financial Times etc. 

Over lunch that day, I brought up the matter of Nugan Hand Bank opening a branch in Singapore. He asked what I thought of the matter. I felt it strange that MAS should approve the licence for a bank that had hardly any history (it was incorporated in Australia in 1973), without any reciprocity which has been MAS policy, and owned by a couple of guys no one in the industry knew. He told me he knew one of the co-founders, Michael Hand, back in Vietnam War days. According to him, Hand was a decorated Green Beret, but was already dabbling in drugs during the war. Nugan Hand was set up as CIA banker, sourcing funds from drug operations. Today one can google and dive deep into the CIA-drugs-gun running-money laundering operations of Nugan Hand. But back in 1978 we had no access to any info. Of course I took my friend's claims with a pinch of salt. Then to my amazement, in 1980 Frank Nugan, the partner of Hand, was found dead in a car in Australia, execution style. The bank collapsed in 1980 under a cloud of massive fraud and criminal activities including drug trafficking. Hand disappeared, lots of international investigation and inquiries, but no one went to jail. Except one - the accountant Mr. Tan who ended up in Singapore jail on account of the fact he was the Local Principal of the branch. Innocent chap, the sacrificial goat to close the chapter in Singapore..

What is known today is Nugan Hand Bank was set up by US Deep State, principally CIA, to source illegal funds to pursue covert operations in SE Asia, never funded by, and thus concealed from, Congress.

What was MAS granting the banking licence all about. I mean Nugan Hand had a branch in Chiangmai in the Golden Triangle, in an office shared with the Drug Enforcement Office, company employees were basically CIA Alumni, including William Colby the future agency head, the predecessor of George Bush Snr. Surely these things don't get past the suits in MAS. Was Singapore doing the bidding of the US? Those were the years when Singapore felt the need for a strong defence umbrella of the US. More intriguing is the question begets a more important question -- what was the trade-off? Did some benefits accrue or some threats extinguished?

So what's with FTX? Similarly, the crypto exchange which has collapsed under a cloud of financial dust, is now unraveling much dark secrets. US Deep State has long learnt to master a funding source so that they can run covert activities without the need to go to Congress for funding and support their programmes. After Nugan Hand, came the Iran-Contra scandal. Ran by Oliver North, the US intelligence brought in drugs to fund the various covert anti-communists programmes in Latin Americas. Plan loads of drugs were brought in, landing on a small outlying airstrip in Kansas City, under the very nose of Governor Clinton. There was once a small incident of a group of kids who witnessed the illicit cargo shipment, and they were suicided off.

Times have changed. Perhaps drugs are now replaced by cryptos. Remember the Freudian slip of Joe Biden about them having the best plan to defraud at the polls? Is FTX the play? FTX was founded in May 2019 round about the time of Biden's comment. With its collapse, many details are coming to light. FTX is surrounded by all sorts of Democrat Party members or their operatives. In turn Sam Bankman-Fried donated generously to Democrats and some Trump-hating RINOs. SBF half joked about the possibility of a US$1b donation to Democrats for 2024. Round-tripping of cryptos between FTX and Ukraine seem to suggest some sliver of credibility to the claim of the massive US aid being round-tripped back to Democrat coffers to fund the mid-term campaigns. That would certainly explain the generosity of the Biden admin to pour in massive aid to Ukraine, with money they don't actually have. Using cryptos and bypassing central banking systems seem a perfect mechanism for these shenanigans. With it's fall, Congress opens an inquiry into FTX, headed by a Congresswoman Maxine Watters who received generous donations from SBF. You know next scene is a cover-up, but not if the new GOP Congress can help it. Sorry for a cliffhanger here.

The question comes back again to the smart suits in Temasek. Were they really so blind and reckless to throw US275m at a crazy outfit? Social media is chokeful of condemnation of Temsek due diligence quality. I for one refuse to believe that it was a case of bad quality control. If not, then it is ditto the same questions asked of the Nugan Hand case. But what could possibly be the pull factor for Singapore to align to a Democrat leadership? Globalism. Singapore is a big fan of trade globalisation. Democrats are all about WEF One World Order globalism under technocratic elites.

As for Twitter, is Elon Musk the white knight charging into the arena to protect Free Speech? Or is there something else? The business risk he is taking makes no sense. He already knew Twitter is in a financial mess. He knew Twitter lied about subscription base data, the false declaration of which to SEC is very serious, to the possibility of getting the company struck dead for breach of legislation. He knew bots bolstered Twitter numbers and sooner or later will face massive reparation demands by advertisers. Twitter share prices are already twittering. His takeover will see revolts by woke employees and advertisers. There will be massive layoffs of crazy liberal woke employees to the extent of crippling operations. Advertisers will flee. In short, Musk's actions face a risk of Twitter imploding. Does he have some macro business plan that incorporates Twitter into some eco-system he is building? He has never hinted anything.

My assessment is Musk is already a government's man. By the way, Trump does not trust him and I wonder why. To understand the role of Musk with the government, one has to dig hard into NASA activities. Obama killed NASA's space discovery Project Consternation, ostensibly because the US$3b bill he could not stomach. But space was identified by Trump admin as the new frontier of military challenges.

"Space is the world's newest war-fighting domain.  Amid grave threats to our national security, American superiority in space is absolutely vital. And we're leading, but we're not leading by enough. But very shortly we'll be leading by a lot." .... Donald Trump

Trump created Space Force, the US 6th military arm, and put substantial personnel and budget behind it. Democrat detractors laughed at him. Joe Biden undid every project that has a Trump signature on it, but left Space Force alone. That should tell us about how seriously the US takes the space challenge.

So why did Obama kill NASA? I believe it was a planned move to protect the secrecy of a lot of projects. We can go into the realms of conspiracy theories again. Of extra-terrestrial engagements, re-engineering of ET weapons systems, etc. ET is no longer a fiction of imagination. The Air-Force has made some acknowledgements of their existence. (I absolutely believe in this from personal experience of sighting an ET event about 15 years ago.) And possibly covert military space technology that's against their laws. NASA has taken to outsource their research and development, exploratory projects, and rocketry technologies for satellite management. The reason primarily being to avoid Freedom Of Information interference. FOI does not apply to commercial enterprises. In this way, top secrets are better protected.

I'm guessing you already know where this is leading to. Yes, Musk's rocketry technology company Space-X.  Musk is for all intents and purposes, the government's partner in space exploration. This calls into question why would Musk take a collision course with the Biden admin to champion Free Speech by taking over Twitter. Perhaps Musk is confident that his stranglehold over NASA is so strong the government will not move against him even when he goes anti-woke. But simple logic says no one is foolish enough to poison the pool from which he draws his water. Musk is an anomaly and this is where my big data app breaks down. It cannot process. For the time being I like what Musk is doing at Twitter. Time will tell.

Over at Temasek, US$51m was poured into an Indian rocketry venture in September. Skyroot Aerospace last week sent their first test flight Vikram-S up into the atmosphere. It was in the air for 5 minutes reaching a height of 81.5km before splashng down into the Bay of Bengal. It has not yet reached space which is 100km out. Straits Times called Skyroot the most funded aerospace company in India and US$51 million got Temasek a 25% stake. Most Singaporeans probably look at it as high risk investments with questionable very long term returns plus terrible currency loss potentials.

But what do Earthlings know. Not all Temasek investments are profit seeking. Temasek does national service sometimes and invest in ventures that are not commercially driven but for some state economic agenda. This entry into rocket technology with a country that is politically neutral with Singapore is possibly with a view to establish security and better control of our assets in space. As Trump puts it, there are grave threats out in space. Consider this. In the ongoing war, Ukraine would have been completely without communications if Musk had not stepped in and offered his satellite services. There are thousands of satellites up in space, with all sorts of technological capabilities, both military and commercial. If a country puts a satellite up there, it better have direct control over it. Singapore has 19 at last count.


Get your pop corns. Sit back and watch more Truman shows Cut your imagination loose.

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SO YOU THOUGHT GIC, TEMASEK INVESTMENTS & MAS FOREX RESERVES ARE OUR RESERVES

In a Nov 7 Facebook post ex-GIC economist Yeoh Lam Keong commented on 2 issues. One related to the budget surplus which I covered in my previous blog. His second point was about national reserves which is what I address here.

Yeoh's post received a POFMA, the government's response is here.

Tan Kim Lian substantiated Yeoh's claims about the quantum of fiscal surplus and challenged the government to POFMA him. Tan seems to want to wear POFMA as a badge of honour. I had a bit of discourse with a commenter when I pointed out where I think Tan got it wrong. Unable to convince the commenter, I said I had brought the horse to the water and cut out. To which he responded he await the POFMA. He meant if Tan receives the POFMA, then I was right, if not, then I was wrong. I have no intention of clipping anyone's ego, but I am certain the government confines the issuance of POFMA only to those they feel whose views impact the public. Yeoh, being an ex-GIC economist, obviously carry that stature, that being the reason for the POFMA.

Although a POFMA seems like an imposing big cane of the government, there are no penalties. Make no mistake, opinions without malice is perfectly fine. POFMA recognises this. Despite the clout of POFMA I am glad for the exchanges for everyone learns something of national interest, hopefully. As a matter of fact, for its perceived notoreity, POFMA provides the publicity to spread the understanding.

In the same vein of furthering learning, I like to share my views on the government's clarifications in the POFMA.


MOF : "(7)  In his Facebook posts, Yeoh also expressed his view that “our reserves” would grow very strongly (i.e, at “the rate of $50-$100 bn a year”) for the next 5 to 10 years because of balance of payment (“BOP”) surpluses, leading to higher Net Investment Returns Contribution (“NIRC”) derived from the reserves, over the medium to longer term."

            "(9)(a) ... while BOP surpluses correspond to an increase in OFR assets, this increase in OFR assets does not result in an equivalent increase in the Reserves. This is because the increase in OFR assets may be matched by increases in MAS’ liabilities."

The NIRC is in relation to GIC and Temasek. The size of the investment portfolios and the earnings for the year of the sovereign wealth funds do not matter. NIRC is based on the expected long term rate as computed by the ministry and applied on the net assets (ie equity) of the 2 companies.

BOP surpluses means Singapore sells more to the world than it imports. More foreign currencies flow in to buy our goods and services. MAS mops up the foreign currencies to prevent a SGD appreciation. MAS purchase of foreign currencies are always sterilised, meaning it is with debt in the form of securities such as MAS bills. So BOP surpluses end up with MAS having more forex reserves and more liabilities, ie no increase in equity. MAS transfers forex reserves that are deemed in excess of their needs for monetary policy management to GIC for longer term investments. This increases the GIC investment portfolio. Just like MAS, GIC has increase in assets but also increased liabilities to MAS. There is no increase in GIC equity. Bottom line is, BOP surpluses do not translate to increase in the country's reserves.

Hence, Yeoh actually got it wrong on 2 points. (1) Increase in BOP does not lead to increase in reserves. (b) Increase in GIC investments does not lead to increase in NIRC.


MOF : "(8) The Constitution defines the “Reserves” as the total assets less total liabilities (i.e. net assets) of the Government and other entities specified in the Fifth Schedule to the Constitution, such as the Monetary Authority of Singapore (“MAS”). [1] The assets include the Official Foreign Reserves (“OFR”) held by MAS."

This MOF description left out something and is ambiguous in another.

(a) Entities include all statutory boards and all companies and organisations owned by the various wings of the government and stat boards. The numbers are extensive.

(b) The statement here leads one to think the OFR is a component part of the reserves. The OFR is a massive figure so a mistake of definition is significant when one envisions the reserve aggregate. The net assets of MAS forms part of the reserves. Suppose MAS has total assets of $100 of which $90 is OFR, and liabilities of $70. The reserves of MAS is only $30. The OFR of $90 is within the $30 reserves. Majority of folks make the mistake of assuming the entire OFR is reserves.

How much is our reserves?
I have reiterated in all my previous blogs on the national reserves. The book value of our reserves can be aggregated in a matter of a couple of days by aggregating the equity of all the entities of the government.

What are our assets that make up the reserves?
The reserves, as defined in the Constitution, is a conceptual aggregate. One cannot go out and pick out all the assets physically and specifically that make up the national reserves.

GIC and Temasek investments do not all belong to us
All social media posts and comments I have come across, without fail, incorrectly refer to the investment portfolios of the sovereign wealth funds as reserves. In all my blogs I have always pointed out these are not all reserves. Only the net assets form the reserves. Of the funds flowing into SWFs to be invested, those belonging to us are from land sales and budget surpluses.

President Ong Teng Cheong and the 56-man years engima
Most Singaporeans bo-chup about searching for truth and keep harping on a badly beaten and maligned horse. It's a 1999 story when President Ong spoke at a press conference of how the Accountant-General had told him it would take "52 man-years" to produce the value of the full list of physical assets of the Government. The misinformed continues to believe the government refused to provide the president with the size of the reserves arguing it will take 56 years to compute.

Very briefly, the truth of the matter is Ong asked in 1992 for information regarding assets owned by the government. He was provided the info within 2 months. Ong then asked for the value of the assets. As his job was to protect past reserves, Ong reasoned it was necessary to know the asset valuation in a change of government. That was when the Accountant General advised him it would take '56 man-years' to compute.

Detractors completely mis-understand the meaning of '56 man-years' as 56 years and are still absolutely blur as to the whole context of the matter.

Ong held the press conference to declare he will not stand for re-election due to his disagreements with the government's actions on certain issues as regards past reserves, where his opinions did not align with the government's. In this episode, it is heartening to note Ong took his responsibilities as the guardian of past reserves seriously, had the temerity to question the government, and not to stand for re-election as his opinions differed. That is the Confucianist gentleman of integrity and conviction and why Singaporeans love him. Unfortunately, Ong was an architect by training, and his dissent with the government's position was predicated on accounting principles that he could not accept. There was no hanky-panky. The government was absolutely above board. The Finance Minister Richard Hu explained everything in detail here.


MOH : "(9)(b) "Second, it is speculative to suggest that MAS’ OFR will continue to grow at the same rate as historical BOP trends. While MAS has had a steady accumulation of OFR in recent years, this took place during a period of unprecedented monetary easing globally. The same monetary conditions are now turning with global central banks tightening monetary policy aggressively. Trends in OFR accumulation will change against this evolving global monetary backdrop."

One particular prolific Facebook contributor, an ardent PAP fanboy, never fails to blow trumpet how a well managed Singapore attracts inflows of foreign currency which causes MAS to mop them up to prevent appreciation of SGD. Whilst that is true, MOH explanation here shows  clearly there is an exogenous causality to the appreciation of SGD. The monetary easing of foreign central banks also has an upward pressure on the SGD. MAS buys foreign currencies to press the SGD rate down. Result - MAS holding of forex reserves, ie OFR increases. Whilst the uniformed thinks that's good since more OFR means more reserves (wrong, as explained above) and increased investments in GIC, the downside is MAS carries a huge currency exposure, which in 2021/22 suffered a massive $8.7b loss in exchange. 


Conclusion:

I have blogged on reserves in the past and my writings have been consistent and in keeping with the government explanation above. So once and for all. let's not refer to the investment portfolios in GIC and Temasek as our reserves. Neither is the forex reserves of MAS. Only a portion of our reserves are in those portfolios. I think I have been the lone voice in social media to have stressed this point for years.

However, we can refer to them as reserves in the accounting sense which identifies funds not available for general spending but set aside for some specific purposes.


Read: My old blog where I explained what is national reserves

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THE S$30B SINGAPORE FISCAL SURPLUS DISPUTE

Currently the hot social media topic is whether we have a $30b budget surplus available The implication is the increase in GST rates is absolutely unnecessary, especially at a time when inflation is already hitting hard. There seems a deep-rooted feeling that government accounting of the budget surplus is way too conservative.

Ex-GIC economist Yeoh Lam Keong wrote on his Facebook Nov 7 on his estimate the surplus is $30b (he also wrote about the reserves) which was covered by online media The Independent Singapore. Both received a POFMA from the MOF. Tan Kim Lian wrote on his Facebook Nov 20 where he basically felt the $30b may be right, and he outright challenged the government to POFMA him.

I have also read opinions of Lee Hsien Yang, Yeoh Lian Chuan, Chris Kuan, and a few others. Whether they are correct or not is besides the point. People have a right to their opinions. It is good to see respectable leading personalities partake in such a conversation of national interest. If one has a different view, it is good to join in a healthy discussion. To quote myself in a previous blog, kiassu, kiassi and bo-chap is the fence-sitter's wine of oblivion. The internet is free. POFMA imposes no fines.

The government of course has a right to respond. The MOF's explanation to YLK's post is here.

I have some comments to the above gentlemen's views. As a preamble, and in sympathy with lay persons not familiar with government accounting, I share what I know. I have blogged on this before, but now I present in a pictorial which is easier to understand.

Government accounting is on cash basis. The balance sheet is simple. Assets comprise of only 2 a/cs - Cash and Investments. Liabilities comprise of several Funds accounts.

Basically, there are 4 types of receipts:
(1) Revenue - these are taxes, fines, fees, duties, NICR (net investment contribution returns) from GIS & Temasek, and a certain percentage of profits of MAS.
(2) Fiduciary - these are money belonging to others, mostly Stat Boards, but invested by MOF on their behalf.
(3) Debt - Proceeds from securities issued.
(4) Land sales

(5) All cash received are deposited into the govt account at MAS. They are recorded in the Income Statement. Govt Balance sheet has only 2 asset items. All cash received are debited in the Cash a/c.

(6) All Revenue cash are credited into the Consolidated Funds. All fiscal spending flows through this fund. The cost of running all the ministries are recorded in this fund.

(7) Apart from the operating cost of ministries, the government also spends on various programmes. All these spending programmes are approved by legislation. Eg Edusave, CDC Voucher, Pension, Medical Endowment, Development, etc. A special fund is set up for each programme. Appropriations are made from Consolidated Funds to each relevant Special Funds.
These funds have different timelines for spending, ie they do not follow the fiscal year. Some short term, some very log term. Some are endowment funds, ie the principal will not be spent, only earnings from the funds are spent.

(8) The Revenue cash less the budgeted cost of the ministries, less appropriations to the special funds, is the fiscal balance or deficit. This is transferred to GIC for investing.

(9) Fiduciary money are recorded in the Fiduciary Fund.

(10) All proceeds from securities issued are recorded in the Securities Fund. The government do not take on debt for fiscal spending.

(11) When proceeds of land sales, securities and fiduciary money are transferred to GIC, it is credited from Cash a/c and debited to Investment a/c

(12) When the ministries spend, it pays out of its MAS account. The amount spend is credited from Cash a/c and debited to Consolidated Funds.

(13) When money is spend under those special programmes, cash is paid out from MAS a/c. Cash a/c is credited and debited to the relevant special funds a/c.

(14) Some investments are made by the govt itself. These are mostly short term investments to park funds not required in the immediate future.

NOTE: No Funds is set up for land sales. The proceeds are simply transferred to GIC. Cash a/c credited and Investments a/c debited. MOF of course has apps that keep track.


Yeoh Lam Keong (Facebook Nov 7)

YLK: “... we have a $30 bn structural fiscal surplus that we have not even begun to publicly delineate clear spending big plans for.”

MOH explained the past several years, the average budget surplus is $2.2b and Yeoh is wrong about the S30b. A lot of government detractors started the usual venting and sharing without actually understanding what Yeoh meant. I am not sure of what exactly he meant. He could be saying :

(a) A lot of the appropriations were made out of Consolidated Funds into those special funds. But each year, a lot of these special funds were not spent in the fiscal year. Thus had they not been appropriated, the Consolidated Funds would have been left with a higher surplus. He estimated it to be $30n.
(b) The term 'structural surplus" has a specific meaning. The fiscal for the year could be subject to cyclical peaks which will be evened out in the short term by economic cycles. But sometimes a surplus (or deficit) could be due to long term structural changes. For example changing demographics. This causes structural surpluses (or deficits).
(c) Land sales proceeds were not treated as Revenue. Had the govt done so, the surplus will be much higher.

I'm guessing Yeoh was NOT referring to (c) because land sales was only about $8b last year and also the fact he mentioned 'structural'. Neither could he be referring to (b) although he used the term. Had he meant (b) I really would love his dissertation. I am guessing YKL meant (a).

(a) is something that Kenneth Jeyaratnam has consistently criticised. Funds have been appropriated for programmes which are further down the road, but in the meantime, people are struggling and GST is being raised.


Tan Kim Lan (Facebook Nov 20)

Several points the affable TKL made are technically incorrect. Basically Tan said the government did not follow 2 generally accepted accounting treatment. Had they done so, the surplus will be closer to YKL's $30b.

Tan : Land sales not reported as Revenue. "Instead, it disappears as transactions involving "past reserves"

Tan is right in that most countries report state land sales as Revenue. But as the above pictorial shows, it didn't disappear. Land sales proceeds appear in the Income statement and ends up in Investment a/c.

Tan : "Large transfers are made from surplus towards special funds.... hence reducing the surplus."

The right way to explain this is as per (a) for Yeoh's comment above.

I understand Tan is saying had no transfers been made out to Special funds, the surplus would have been much larger. So in fact, the government is transferring out of surplus to special funds and thus reducing the surplus. Here Tan is conflicting himself about accounting treatment because all countries use a consolidated fund and appropriations are then made out of this fund to special funds.

In effect, Tan subscribes to my comments (a) and (c) to YKL. If that were the case, Tan is again wrong that "the surplus will be closer to the "structural surplus" of $30 billion stated by Mr. Yeoh Lam Keong." The surplus would in fact be massively higher than the $30b had land sales been taken into Consolidated Fund AND no appropriations be made out to the special funds.


Lee Hsien Yang (Facebook Mar 2)

Commenting on Yeoh's post, Lee Hsien Yang Nov 19 shared his Facebook post of Mar 2.

LHY :"Singapore has historically run a massive budget surplus every year. The way the surplus is calculated does not conform to IMF accounting. Adjust for that, it would be even more of a surplus!".

He quoted from an article by Manu Bhaskaran (CEO of Centennial Asia Advisors) and Linda Lim (Professor Emerita at the Stephen M. Ross School of Business, University of Michigan) which stated "The different method used by the International Monetary Fund shows a fiscal balance roughly 5 to 7 percentage points higher in 2011-15".

It is not helpful to mention non-conformity with IMF accounting without explaining the context. It leads the unwary to ponder oh gosh, what other diabolical manner of creative accounting has the ministry pursued. The only issue in question is IMF recommends land sales be reported as Revenue. It is not about a right or wrong way. IMF's concern is about uniformity of reporting makes for easier comparatives, and the fact it helps in preventing leakages. Singapore makes a difference about reporting and recognising land sales. It is reported in the Income Statement. We just do not recognise it as revenue available for fiscal and thus not taken into Consolidated Funds.


Yeo Lian Chuan (Facebook Nov 20)

He believes the surplus is too conservative for the following reasons :

YLC: If you take the 50% of the real income of the reserves alone that is not part of NIRC, that’s already >$20bn a year

I hope he is not suggesting the sovereign wealth funds transfer 100% annual profits to the coffers. Every entity needs resource conservation for operations and build wealth. In any case, the long term return rate is set as a policy. There may be years in which the long term yields are higher than real returns.

YLC: "..the government undercounts income, by excluding all amortised land lease proceeds 100%"

This is the same criticism of not taking land sales for fiscal use. But YLC here is suggesting something different. YLC is a lawyer and here he is suggesting leasehold accounting. He said over 99 years, if the amortised aggregate for each year is taken in as revenue, the surplus would be higher. There is a problem here. Firstly, government accounting works on cash basis, not accruals. Secondly, what about freehold lands sold?

YLC: ".... the spread earned by GIC is not taken up as income or part of NIRC"

The spread he refers to is the higher returns made by GIC over the interest payments to CPF. Note quite sure what he meant here. Is he saying the investment gains should be taken up by the government? Of course it is, as part of the overall returns of GIC but in the form of NIRC. GIC investment funds are co-mingled.

The part I do not know is who is paying for the cost of the CPF funds? The govt who issued the SSGS, or GIC? If govt pays SSGS interest to CPFB, this do not affect the surplus because the payment is out of Securities Fund, not the Consolidated Fund. That will mean the cost of funds to GIC is zero, so the SWF reports higher returns. Does this higher returns from GIC mean more revenue for government budget? NO, the real returns make no difference to the budgeting. The govt is paid according to the computed long term NIRC rate of return.

YLC: "..".. when the government announces a major measure such as the GST assurance package, ....... the money is not due to be spent or sometimes even liable to be spent."

This is the same pet peeve of Kenneth Jeyaratnam about money lying in Special Funds.

YLC : "Fifth, the gains from these funds - which are worth over $1.22 trillion (repeat trillion) ....... are also not treated as relevant assets under the NIRC framework"

I think there is a fundamental misconception here. He is referring to the Special Funds. These are liabilities, not assets. The assets representing these funds are all co-mingled in the investment accounts. They could be with GIC, Temasek, MAS or even in the investments managed by MOH itself.

YLC : "Sixth, the Budget counts development expenditure as an immediate 100% expense even though it may yield an asset. According to the government’s reasoning, when land is sold that is merely a conversion of one form of wealth to another. Why isn’t this same logic applied to development expenditure or some of it. The total development expenditure in Budget 2022 was $17.35bn".

Govt accounting is reporting cash in - cash out and the balance is the surplus. The Development Fund represents money put aside for various projects. In the budget, the money for development projects is appropriated from the Consolidated Fund. It is not a fiscal expenditure as such. The Development Fund records the money spent for the projects. On completion of the project, the asset will be carried in the books of whichever government agency or ministry that eventually owns it.


Chris Kuan : ( Facebook Nov 20, Nov 21)

Chris often throws out gems in his posts. In this particular dispute, his basic point is how the surplus is computed is meaningless. We abide by the way the local jurisdiction wants to see things reported. That's sovereignty exercised. 



The gist of my comments here aligns with Chris. Our constitution dictates proceeds from land sales are to be treated as reserves and should not be available for spending. In so much as the Accountant General wants to reflect compliance with our constitution, the accounting treatment he has devised is brilliant in its simplicity. It is reported as income, but does not go into the Consolidated Accounts as spendable funds. The fact the IMF is able to compute our fiscal surplus according to their way of treatment indicates nothing is hidden. The hullabaloo over the surplus computation is meaningless.

My message to fellow Singaporeans. Keep on talking.

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TEMASEK'S SCHOLARS CONNED BY AN OVERGROWN KID IN SHORT PANTS

In the 1980s there was a company called Colour Touch (S) Pte Ltd whose principal business was wholesaler in carpets. It appeared on the scene sometime 1985 and within 2 years became the biggest carpet wholesaler in town. Soon it took on massive financing and many banks rushed in to provide loans upwards of S$20m. The boss sat in an oversized office fit for an international conglomerate, adorned with display pieces in gold. The company had about 6 sales executives (not managers) all provided with BMW cars. I was working in a bank and I wondered what sort of business a carpet trader can attract that kind of loans and bear those overheads. I narrate this with full authenticity as I had close relationship with people in the trade who knew the folks at Colour Touch. To my query what sort of margin is there in carpet trading that can support such loans, I was told it was a competitive market. The modus operandi was Colour Touch imports at a certain price, sells to a separate company at good discounts, said company was then able to outbid competitors at big projects. Colour Touch chalks up huge losses, bank sues company to bankruptcy, owners walk away with huge profits from the related company. The opulent office and the BMWs, and of course fine wines and diners, all out to impress bankers. The oldest con in the business, and it worked. Often.

Take away the complicated technology, high sounding literature of the crypto world, the boast of block-chains that mystifies even seasoned investors, then left in the Emperor's clothes, the collapse of crypto exchange FTX is not much different from Colour Touch.

Much has already been written about how FTX collapsed. I shall limit myself to the investment of Temasek.

Back in the days when I was in banking, we used to quip that in every big corporate failure, we will see Societe Generale right up there amongst the biggest lenders. Kenneth Jeyaratnam wrote eloquently about banana skins of investments and of Temasek's uncanny ability to find every one in the room and slip up on it.

Everyone is an expert with the wisdom of hindsight. Investment carries risks and all investors have to make a call on what they wish to invest in. Since outcomes are never deterministic, we cannot criticise Temasek as long as there was due diligence and investments made within their framework of risk and authorised investment parameters. That said, what is open to criticism are weaknesses in risk management system and when red flags prior to investment decisions were apparent but ignored or missed.

The only thing that we Singaporeans should have a say, policy wise, is whether we prefer reserves to be invested in the old-fashioned traditional 60-40 way and in solid assets. Or do we want Temasek to continue it's journey into equity fund management, a world of huge employee compensation, high risk assets of venture capital, often in early seed funding, huge unlisted portfolio, build concentrated equity with no board seats, offices all over the world, and lastly into leveraged investments. It all boils down to the risk-returns conundrum. I feel this is a national conversation we ought to have.

As for leverage, Temasek has been taking on debt since 2014, rising from S$9b to S$90b as at 31 Mar 2022. In 2022 debt increased by S$8.5b. I believe these are USD bond issues. The era of cheap money is over. With the Fed taking an aggressive stand against inflation, the USD interest rates are rising. Every 50 basis point increase is going to see a S$450m increase in Temasek's interest expense for the year. It's going to be a challenge just on debt servicing.

For those that kpkb Temasek does not perform due diligence, or forever dragging Ho Ching into the picture for responsibility based on the investment timeline, this isn't helpful. Temasek statement shows a 8 month process due diligence work into areas most laymen won't even know about --licencing, AML, KYC, sanctions, cybersecurity, etc, across many jurisdictions. Of course they did interviews, legal advices and technical specialists' inputs, the whole works.

There are only 2 things I am curious about the due diligence work. Temasek said:
- "..we reviewed FTX’s audited financial statement, which showed it to be profitable."
- "Separately, we also gathered qualitative feedback on the company and management team based on interviews with people familiar with the company, including employees, industry participants, and other investors."

Apparently Temasek was satisfied with the people and the financial statements they saw. Did Temasek review a different set of financials and vetted a different group of people or what? If you were to go look up various interviews of Sam Bankman Fried or SBF, beyond the technical gobbledygook of crypto-talk, he had been caught tongue-tied and displayed naivete and lack understanding in running a huge financial operation.

John Ray III has been brought in as new CEO to sort out the mess in FTX. Ray had vast experience in sorting out the mess of the Enron bankruptcy. This is what he had to say :

“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here. From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.”

This is a complete annihilation of Temasek's opinion on FTX financial status and personnel. However, I give myself an escape path. Perhaps by now their accounts have been totally messed up due to the upheavels of the past few weeks as FTX tried to prop up Alameda with fraudulent transfers. Perhaps months ago during Round B and C funding when Temasek was doing the due diligence, the accounts were in order.
 
On the issue of fraud regarding funds that went missing and transfers to Alameda Research, Temasek had this to say:

"Reports have since surfaced that customer assets were mishandled and misused in FTX. If these statements are true, then this amounts to serious misconduct or fraud at FTX."

Of course we cannot pin post-fact events on Temasek. However, in their due diligence, Temasek may have failed to appreciate Alemada - FTX link. FTX is a crypto exchange, Alemada is a giant crypto trader. Both are owned by SBF and Alameda is a price maker for FTT-USD, the native token issued by FTX. Both companies have insisted they deal with each other at arms length (very familiar term to Singapore Inc). In financial markets, the exchange is always separate from the market makers. This prevents trading against their own customers and price fixing. It is this relationship that brought the house of cards down.

The woes of FTX stems from liquidity problems at Alameda. Over extension of resources by Alameda into venture capital plays and counter-party credits took a heavy toll, especially from loans extended to Voyager Digital, another cypto platform. To support Alameda, FTX fraudulently transferred customer deposits to the latter.

The market has always suspected Alameda's big play is on FTT-USD, playing against their own customers, plotting the token price up. This was revealed when Coindesk.com got hold of a secret document of Alameda's financial status. On Nov 2 Coindesk published an article to reveal Alameda's bulk of assets as well as net capital, was nothing more than FTT-USD tokens that FTX issued from thin air. This report confirmed the lines between FTX and Alameda are blurred and suggests the trading giant may be insolvent. On Nov 7 Binance liquidated its holding of US$530m worth of FTT-USD tokens with Binance CEO Changpeng Zhao making a public tweet. This started the dowward spiral of the price of FTT-USD. As its token tanked, customers of FTX rushed for the exit door resulting in a run on deposits which the exchange no longer have.

If you want to take a whip against Temasek, it is this inability to see the FTX-Alameda link in their due diligence. FTX had super-charged to propel itself to the 2nd biggest crypto exchange in a matter of 1 year. How much of their transaction volume is fictitious? The industry is known for at least 70% of volumes to be 'wash trading', which is fictitious buy and immediate sales by same entities. Since FTX is a centralised exchange, transactions would not have been individually done on-chain and thus not transparent. Data analytics would have not been able to determine the wash trading. However, the trades are recorded on some order books, an examination would have revealed wash trading by Alameda. Temasek obviously failed to audit the order book which is inexcusable.

Temasek explained the nature of their technology investments :

"Our venture building efforts have been focused on programmable money, digital assets tokenisation, and decentralised identity and data."

This is at odds with the FTX exchange which is a centralised platform. The two biggest crypto exchanges FTX and Coinbase are both centralised technology. The centralised exchange is a model based on protection of private keys and then make lots of money charging fees on transactions. It works against the promise of blockchain technology and a reversion to something akin to the legacy banking systems that crypto and delfi want to replace. This is what Vitalik Buterin, founder of Ethereum, had to say about centralised exchanges:

“I definitely hope centralized exchanges go burn in hell as much as possible”...Vitalik Buterin 2018

 Temasek's investment in FTX is like promoting sustainability investments and then going out and fund a coal mining project.

Perhaps the most critical big picture of Temasek failure came from a high level insider who once explained there is no risk committee at board level. He said with reference to Temasek : “Every commercial organization of any reasonable scale, and in particular financial institutions, simply must have a dedicated risk management committee of the board that is fully independent of management. To not do so is simply playing Russian Roulette and is inexcusable in today’s volatile era and in light of the recent financial crisis ”.

To sum up, FTX collapse is the unraveling of the cascading effect of the Terra-LUNA eruption back in May, its destructive forces is still rumbling throughout the crypto ecosystem. The fall of Terra-LUNA pulled down the Singapore registered crypto hedge fund 3AC or Three Arrows Capital, which brought down Voyager Digital, which in turn caused huge problems at Alameda, causing the collapse of FTT-USD token price and a run on deposits at FXT. The legacy banking system has been heavily criticised for assets that are packaged and repackaged into derivatives and repackaged yet again, until risks becomes blurred and contagion effect occurs when one counterparty in the system goes bust. It is the same exact situation in the crypto world.

We trust our sovereign wealth funds navigate this complicated investment world with eyes wide open and especially be extra cautious with overgrown kids in short pants asking for a $ billion to burn. The investment environment may have changed, but the con is still the same.


My related blogs :
Temasek Tracking - making sense of risks
Will Temasek by played by the deep pocket syndrome

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ARE SINGAPOREANS SATISFIED PIGS OR FOOLS, OR DISSATISFIED SOCRATES?

"It is better to be a human being dissatisfied than a pig satisfied; better to be Socrates dissatisfied than a fool satisfied." -- John Stuart Mill

What drives you in life? The same as everybody else, most assuredly. Desires and needs are varied across the board, but it can be generalised to a singular metric of happiness. Everyone seeks happiness in their life, in one manner or another. Those with higher faculties seek contentment in more grandiose designs, the less endowed settles for more humble ones. To some, happiness is the power that looks down from the barrel of a gun. To others, the endeavor to build their Babels. To others still, it is in service to fellow humans. There are of course, those who seek happiness in pleasures of the flesh.

This is a utilitarian way of looking at life, measured in happiness and lack of happiness, which is pain. If the spectrum of happiness is an imagined utility ladder, then everybody is constantly moving up the rungs to happiness or down to pain.

The industrial revolution stratified society into four groups of ruling class, elites, middle class and the underprivileged. Modern history has been a continuum of political jostling of these groups, often with disastrous consequences in human sufferings. In peace times, people go about their lives, unwary of insidious power maneuvering and palace intrigues. In war, people march against encroaching enemies, or force-marched by draft to fight wars engineered by powers for causes eventually proven fraudulent. As Singaporeans, you fall into one of these classes. Are you satisfied, or dissatisfied in utilitarian terms of happiness.


Ruling Class

The ruling class has existed since time immemorable. There are those who inherited power, those elected to power, and those with power thrust upon them. Some govern with benevolence, others malevolence, but most somewhere in between. In every country, there exists a core of families that run the show. In some countries, the core changes as the ruler is replaced. In some, the core are families that earned their positions through centuries of leadership roles they played. This is the landed aristocratic class in Europe, notably in United Kingdom.

British historian Arnold Toynbee, whose book A Study of History influenced the students of the day in English universities. One such notable chap was a brilliant scholar Harry Lee. Toynbee had dealt extensively on the roles of a minority class, the landed English aristocracy, who put their personal interests aside to come together for country and King in times of crisis. This provides the continuity of leadership of their civilisation.

Lee Kuan Yew was concerned about this lack of political leadership for Singapore. In a lecture in 1971 he spoke about " New countries do not have this continuing hard core of people to provide for continuity in political leadership.........  these men have risen to the top by their own merit, hard work and high performance. Together they are a closely-knit and coordinated hard core. If all the 300 were to crash in one jumbo jet, then Singapore will disintegrate. That shows how small the base is for our leadership in politics, economics and security. We have to, and we will, enlarge this base ......" 

That speech gave an insight into LKY's earlier quiet political preoccupation of building the leadership base. The task continues. Unlike Toynbee's leadership class of people whose families made great sacrifices over the centuries to lead, PAP co-opts from the talent pool of scholars. Today, Singapore's answer to the English landed aristocratic class, is a networked and well connected group of insiders. Highly paid, access to vast opportunities to public projects, well supported by all sorts of incentive programmes, privy to national master plans, revolving doors to prestige appointments with pristine remuneration, a fall-back circled-wagons support when chips fall, all these and the price for happiness is loyalty to the brand.


The Elites

These are the economically successful citizens, the 10% who owns the 80% of the countries' wealth. They are better known as the bourgeoisie. This group always goes with the flow, riding on the coattails of the ruling class. Not one to stir trouble nor controversy. Rare do they sacrifice for country and King. Rarer still do they throw up leaders to fight for social causes. Do you see anyone from this group speak up against the horrible CECA foreign labour policy? Or anyone lament on the hardship of an ever growing population of food delivery and grab driving Singaporeans who got displaced by cheaper foreign labour? Or rising healthcare costs? Or timing of the increase in GST? Where are Ong Beng Seng, the Queks, Jumabhoys, Goh Cheng Liang, the Khoos ........

The relation of this group to the middle class and underprivileged is, in the best of times, mutual welfare, in other times, exploitation. Their relationship to the ruling class is money. In other countries, influence buying is standard fare. In corruption-free Singapore, they say this never happens, although sometimes they give discounts. In some countries, the elites jostle for political power. The billionaire elites in the western world today are all buying into the globalist march to a new world order under their control. This is never the case in Singapore where elites have political apathy, or bo-chup.

Once their wealth is threatened, elites turn on the ruling class. The true perfidious chameleons arise. But these are treacherous people who entertain no thoughts of taking on the King personally, no, not them.  With their wealth, they play both sides, the ruling and middle classes. The Rosenberg, Schwab families for example, aided Hitler when it was in their interest. The French Revolution of 1780s is classic illustration of the devious treachery of the bourgeois. Once Singapore Inc's Keppel corruption case broke into an international affair, they threw some low level managers under the bus and the problem goes away.


The middle class

Division of tasks made possible by the industrial revolution gave rise to the massive middle class, where there was none before. The middle class form the biggest demographic in all countries. This is the mainstay of stability in any country. Where countries are run well the middle class is generally satisfied with their economic well being and there is political stability. Where social dissatisfaction explodes, this class is the hotbed of revolutions.

The tragedy of the middle class in social revolutions is their lack of leaders and ideologies. Their play gets hijacked by the elites. Sooner or later, the revolution always devours its own children.

On the other hand, any palace conflict for control of a country always turns on the middle class. Destroy the middle class and the economy and social structure collapses. It is a tactic to break the tyranny of the majority. The middle class drops to the poor under-privileged class, totally dependent on government handouts. The new ruler steps in bearing gifts of promises of bread and butter. The poor will own no property and be poor but happy with socialist handouts. Dystopian rulers enter the palace with long knives to chop off the heads of the higher educated and intellectual folks amongst the middle class - the teachers, professionals, etc. Pol Pot chopped off a few million heads. As did Stalin. The Chinese, to their credit, sent folks to re-education camps.

Biden's policies are working towards the collapse of the US middle class, this being as clear as daylight in the recruitment of 87,000 armed Inland Revenue agents. The subjugation of this class can then be followed by full scale socialism and totalitarian takeover.

Are we in Singapore also witnessing a planned collapse of the middle class? It sure looks like it. The public housing price levels and schematic of CPF paying off mortgage loans has been fine-tuned to the plimsoll line. It knocks off about 30% of median household income, living one with just about survival level, almost going underwater but just. The CECA policy of cheap foreign workforce disadvantaged Singaporean PMETs into the gig economy, forcing a wholesale restructuring of the labour market that is hollowing out the middle class. A swelling number now increasingly dependent on breadcrumbs from the government.


The under-privileged

In every society there exists the economists' 30th percentile, a huge mass of the poor, under-privileged class. Some of these are physically or mentally impaired, some old and feebled, some retired and leaving off meagre pensions, some living through a bad patch in life and trying to make the best of it, some uneducated who simply have no chance of holding on to a good job, and some given to a hedonistic life sunk in indulgence of alcohol, gaming, drugs, and sex. Then there are the plain lazy buffs who just want to live off welfare. In India, there is the caste system with the 'Untouchables'.

This is the class Henry Kissinger referred to as the 'useless eaters'. Hillary Clinton calls them the 'deplorables'. LKY preferred to use the Marxian term 'lumpen mass'. To Hitler, these are the genocidal markers.

This is the class that most supports socialist promises of redistribution and handouts. Unable to help themselves, they are totally dependent on the government. Dystopian regimes love them for they are the easiest to control. It is the reason why western countries are currently pursuing policies that are engineered to collapse their middle class and cause a massive shift to the poorest class..


A Pig, a Fool and Socrates

John Stuart Mill, famous English philosopher, economist, and political thinker, wrote 'Utilitarianism' in 1863. The prefaced quote of this blog came from his book where he dispelled what he called the 'swine doctrine' against utilitarianism.

In the most basic terms, utilitarianism is a moral theory of looking at any action from the point of view of whether any utility, or gains, is derived. Utility is traditionally taken as pleasure and absence of pain. An action is considered morally right if it generates more pleasure and lesser pain compared to alternatives. Pleasure, or happiness, is taken in it's most broadest sense. It could be intellectual, spiritual, physical, sensual, social, aesthetic, etc.

One objection to utilitarianism is that it is a theory that recognizes no higher purpose to life than the mere pursuit of pleasure. Such a theory is unfit for humans. Mill's called this objection the 'swine doctrine'. The reference to pigs seek nothing but to chomp all day long.

The reference to Socrates is of course about his quote 'An unexamined life is not worth living'. One has to question and seek answers about life and the world around us.

The meaning to that quote of Mill is, should humans be like pigs, eternally hungry and simply be happy as long as they have something to eat, anything literally. Or should humans be fools living in ignorant bliss. In Singapore linggo, be KIASSU, KIASSI and BO CHUP (read my previous blog). The swines and fools don't question nor seek the truth and are satisfied. Or should humans be like Socrates, lead an examined life and seek. Those that seek will be dissatisfied since not all answers in life will be revealed.

Should the ruling class, the PAP parliamentarians, be pigs and fools, questioning nothing and be satisfied?
- Like when Minister Khaw stood in parliament on 15 May 2013 and declared PAP owned the AIM consultancy company. That contravened The Societies Act, punishable with de-registration of a political party.
- Or don't they ask what did Nancy Pelosi seek in private when she visited Singapore in August on her way to Taiwan. The question has pertinence now that it has come to light South Korea is shipping arms to US for Ukraine, shortly after Pelosi's stopover in Seoul on her Taiwan trip.
- Or how about Temasek's huge investment in the crypto exchange FTX, now that stories are breaking that indicate company founder, Samuel Bankman-Fried, funneled cryptos to Ukraine as aid and round-tripped it back as donation to the Democratic Party in US. There is also suspicion US aid money sent by Congress to Ukraine could also have been round-tripped back via FTX to fund Democrat midterms election.
- Or where's the report on the KKK Hospital's test on mRNA vaccines for children?
- Or MPs in your meet-the-people sessions. Don't you see a rise in PMETs coming in for assistance and complaints of jobs lost?
- How about asking why is it HK MRT is able to subsidise fares, but SMRT is unable. Both operators are public listed companies.
- Most importantly, an existential issue. Surely you are well-read and have seen studies from all over the world of the rise in health issues relating to the genetic vaccines, more specifically rise in deaths, cancer, still births, blood clots, etc. What is the status quo for Singapore?

I could go on. Perhaps a million dollar pay cheque keeps one satisfied quite easily.

As for the elites class, you big tycoons, CEOs and chairmen, surely you are smart enough to see a structural change going on in the labour market. Surely you see our local talent pool being hollowed out. Surely you understand the long term implications for the nation. You are the folks with visions and world views and understand a few steps ahead of the ordinary folks. You are no pigs nor fools, but the impossible satisfied Socrates as long as a pool of cheaper labour is made available to you. Your happiness lies in the kachang of your cash registers.

As for the middle class, if kiassu, kiassi and bo-chup are your food of love, enjoy biting into the negativities and be satisfied. The middle class is the most powerful in the land. All rules, policies, and objectives must be for the benefit of the majority, subject to rights of the minorities never be trodden. That is the social contract of a democratic society. I am not preaching any social activism, neither do I see a government in degradation. The Singapore government is primarily doing great, when we see in perspective to what's going on around the world. But there are certain areas of governance where concern is justified.

To a query by opposition leader Pritam in parliament recently, Minister Indranee retorted "It won't be helpful or meaningful to" provide the breakdown of the development cost of HDB flats. This is on a level similar to Hillary Clinton's exclamation "What difference at this point does it make!" in the Congressional hearing on the US embassy in Benghazi incident. Both seemed innocuous but they are reflective of the dismissive arrogance of power who has forgotten they are representatives of the people.

Society must remain vigilant to a dystopian creep when truth or quest for truth, is dismissed. There is no one coming to help us and so participation in social discourse is an obligation. Ignorant fools live in temporary bliss on borrowed times of their children. Pigs live in ignorant bliss on the swill because beyond gorging, they understand nothing else. Socrates is dissatisfied with not having all his queries answered but he is happy in having stood up and asked.

Cogito, ergo sum, I think, therefore I am.

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KIASSU, KIASSI, BO CHUP -- SINGAPORE'S WITHERING TRINITY OF MALADIES

Kiassu, kiassi and bo chup are quintessential Singapore lexicology. These are Hokkien dialect terms which Singaporeans of all races are familiar with. All three have negative connotations, and I am ahgast that some writers suggest these are cultural embodiments of Singaporeans. These Singapore local catch phrases or terms are human traits that are certainly to be found in every other country.

Before kiassu, there was FOMO, the fear of missing out. Standard English dictionaries describe FOMO as a sort of social anxiety, a nagging feeling that others are living more fulfilled lives and having more fun. It is a noun for a state of being.

The Oxford English Dictionary carried the term 'Kiassu' in 2007, but it does not mean the word has gone into the English vocabulary. OED describes it as a term that refers to a person who is "governed by self-interest, typically manifesting as a selfish, grasping attitude arising from a fear of missing out on something." I beg to defer this interpretation. As a native speaker, I think I have the right to profess some Hokkien exegesis.

The literal translation 'kia' is fear and 'su' is to loose. Kiassu is more than FOMO. and much more nuanced than the OED description. Firstly, kiassu is a noun, it does not describe a personality flaw, but rather, it describes the specific action taken. Secondly, it is not an 'attitude' arising from a fear of loosing out, but rather, an anxiety. It is thus a defence mechanism, not an offensive preemptive action as the OED interpretation suggests. And thirdly, the act is the response to the anxiety. This act is arguably but not invariably, negative and selfish. It is tainted with excessive consumption and denies opportunities to others. But it could also be ethics neutral, amoral, and even positive.

Some simple examples to illustrate. :

- In early days of the pandemic, the shelves ran out of masks. (Note this happened all over the world). This was manifestly kiassu. There is the fear of virus. Folks rushed out to buy in excess of their needs. The nuance here is the bi-amplication of the act which is (1) buying in excess of what's needed, and (2) in doing so, denies opportunity to others.

- To prepare for a parade the next day, the recruit polished his boots for 5 hours. The fear of being called out and loosing his credit ratings drove him to polish excessively for what is a 15 minutes job. However, there is nothing selfish about it although the negative aspect of kiassuism is always present. A fun parade commander may choose to set a new standard for shining boots. The recruit sabotages his mates.

- With a test coming up, a student hogs the library space and books so his mates had less access to critical materials. This is typical kiassu. The drive is exam anxiety, there is selfish dictate to deny access to study materials to others, and a hoarding of excess materials. However, there is a positive effect in commitment and effort to study.

It is the act of excessive buying of masks, over polishing the boots, and hoarding of library books that is the manifestation of kiassu. Do these three acts colour the entire being of these three persons? Are they wired such that all stimuli will trigger a kiassu response? To interpret kiassu as a personal attribute implies a non-empirical claim. The Hokkien vernacular is more forgiving, attributing kiassu to only the acts in question.

Kiassi literally translated means fear of death, 'kia' as for fear, 'si' as for death. Death is an exaggeration. It is simply an act, or an omission, to avoid a perceived personal risk. The English equivalent is risk aversion. The nuance in Kiassi is the tinge of cowardice in taking a certain course of action, or avoiding to act. A typical example in Singapore is a huge crowd in an opposition rally seldom translate to votes. Most people who would have voted the opposition do not do so because of the unfounded fear they may be penalised in some ways, such as application for hawker permit rejected, children's school choice frustrated, etc. Kiassi is also a trait that is associated with a specific act or omission. And it also does not imply total negativities for as we know, risk aversion is sometimes an inner voice of restraint.

Bo chup simply means apathy. There are no nuances. It is apparent kiassi has a lot to account for bo chup. A risk aversion withdraws one into a cocoon of indifference or apathy. If I were to ask, do you know what the 3 maladies mean and which is the worst? and your answer is "I don't know, and I don't care because it doesn't affect me", then you would have answered the question.

There are of course many Singaporeans who have contributed their wealth, ideas and time in service of the less fortunate, or some other worthy causes. One such person I have great respect for is Gerard Ee. Many do so quietly and nonchalantly and in a disinterested manner. On the other hand, there has risen a new phenomenon of philantrophic capitalism in the West. Philanthropy is given a bad name when people like Bill Gates, George Soros and many other billionaire progressive liberals seek to use their wealth to further more economic and political capture disguised as voluntary funding.

It has been my observation in the past that if one were to suffer some mishap in public in Singapore, such as in an accident, it is more likely the one to offer assistance is a Malay or Indian. Chinese tended to be more bo chup in public, which could be due to our reticent nature. In private, their generosity is as good as any others. However, I am glad the young today appears to have improved, compared to my generation.

The term bo chup as we apply locally is more in relation to apathy generally, in anything and everything, small and big. In my time, I have done small little things, like stopping my car in the middle of the road to help an invalid to cross to the other side, given lifts to total strangers along un-serviced roads, bought food for distribution to homeless old folks and street kids in Manila, etc. Have you done some little deeds like giving your seat to elderlies or handicapped. I am inspired by people like Gilbert Goh who has been seen often distributing food to the needy.

Apathy is not limited to lack of civic consciousness or volunteerism. It includes a lack of interest in pretty much everything generally outside of a person's narrow world of existential concerns. I have educated and successful friends and relatives and I cannot have a conversation about UFOs, of US politics, Clinton body counts, etc. A kind explanation is some people are very focused in their world and they have no time for anything else. Those with extreme religious fervor tend to belong to this group.

“Tolerance and apathy are the last virtues of a dying society.” ... Socrates

Apathy births tolerance. In of its own, tolerance is neither positive nor negative, it all depends on context. Being colour blind is good, but tolerating drug abuse is not. Tolerance borne out of sheer laziness due to indifference is nothing to cheer about, unless one appreciates a hobo who hasn't taken a shower for weeks. The epitome of hippie culture is apathy and tolerance. Try living in Woodstock for months with a mass of naked bodies and no comfort rooms in sight. When the need to get the next fix is the only motivation in life, decay is inevitable. Witness the decadent streets of San Francisco, Los Angeles, Philadelphia and other liberal cities in US.

"The price of apathy towards public affairs is to be ruled by evil" .. Plato

But everybody is entitled to what interests them and what don't. It is not for me to question nor complain. However, no man is an island. Living in a social construct demands of us to be concerned with the framework of how our community is organised. It is in the national interest, and a social responsibility, that we cannot bo chup about public affairs, which encompasses politics. Public apathy corrupts and disinsentivises governments to low levels of public service delivery. One cannot bo-chup at the polls and then wonder why foreigners are taking away local jobs.

“If an elephant has its foot on the tail of a mouse and you say that you are neutral, the mouse will not appreciate your neutrality.” ~ Bishop Desmond Tutu

I have well-educated successful people asking me why do you bother with this, why waste your time if you can't do anything about it, It has always been that way lah, there is nothing anyone can do. What do you get out of it. Have food on the table is priority, etc etc. The typical bo-chupie. Even in the face of injustice being done to some, one gets no response from this mindset of indifference. Apathy is the fence-sitter's foul wine of oblivion.

“The refusal to take sides on great moral issues is itself a decision. It is a silent acquiescence to evil. The Tragedy of our time is that those who still believe in honesty lack fire and conviction, while those who believe in dishonesty are full of passionate conviction.” ... Bishop Fulton J. Sheen

It is appropriate that I close with the quotes of 2 brilliant clergy as I touch on ethics and morality. Everyone has the right to mind their own business but a minimalist principle ought to cover public affairs, ethical and moral matters as issues one cannot bo chup. To Sheen's quote, I would not say all, but most ordinary honest, hard-working folks simply want to get on with their lives. They are trustworthy in nature and outlook and tend to be indifferent to the affairs of governance, leaving everything to the hands of others. Sheen is right that these folks tend to have less fire and conviction. The dishonest, who has agendas and schemes, these are indeed full of passionate conviction. Lee Kuan Yew once said he had high respect for the communist cadres whose conviction can sustain them for the years of hardship in the Malaysian jungles.

A parallel can be seen in the US where the apathy of conservatives allowed progressive liberals insidiously and slowly over decades, to capture the megaphones of media, entertainment industry, institutions of learning, as well as various agencies of the government. The agenda of the left almost succeeded in turning the country socialist. Now at the edge of the cliff, the American conservatives have awoken from their slumber of apathy. A grassroots level of conviction to actively participate in protecting election integrity warrants a red tide in this mid-term election. Bearing poll cheating by the Democrats, the Republicans are expected to gain back control of both houses to re-chart the destiny of their country away from the disastrous policies of Joe Biden.

Kiassu, kiassi and bo chup are the withering trinity of maladies prevalent in Singapore. They are not our cultural traits. But they are badass traits that we should not be proud of. There is nothing to be proud of when the Oxford English Dictionary puts them out for mention.

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MY FELLOW SINGAPOREANS, I TOLD YOU SO

Call me a pseudo-intellectual, conceited, arrogant, patronizing, pretentious, full of hubris, under.Dunning-Kruger effect or ignoramus conspiracy theory addict, for the many blogs that I penned. I am driven by civic-mindedness and a social obligation to speak up on areas of concern. The value that I want to bring to the discussion is to present ideas, opinions, or sharing views that I feel have not been brought up in the public square. In the areas as it concern Singapore, my beloved homeland, I have raised several issues which, pardon the humility, are eye-openers. It saddens me that voluminous discourse in the social media are skewed toward the nitty gritty and the mundane.

I do believe I have raised quite a few critical points and issues but they have gained little traction. Do not get me wrong. I am not here for the accolades or to accumulate a million 'likes'. I would have loved some other more qualified people, those keen on public interest, or better governance, to pick up and bring the discussion to a higher and more meaningful level. I do have a small following who appreciates my out-of-the-box approach to examining a topic, but my outreach is puny and ineffective. And very sadly, I have been told my website can no longer be accessed in networks in some learning institutions. That's the unfortunate cause-and-effect when inconvenient issues are raised.
A look back at the various blogs to humbly re-state my points :

1. Retail electricity
I raised the point in 2019 the retail pricing system is not sustainable. The Singapore electricity system was operating under the unrealistic status of the short run marginal cost curve below the long run marginal cost curve. The SRMC at some time was running in excess of 30% below the LRMC. This gap allowed the retailers to price at huge discounts to tariff. In a more perfect market, that is, no massive excess capacity, this gap disappears and the retail pricing collapses because the inability to price below tariff makes retailers almost redundant. This was exactly what happened in the aftermath of the massive jump in gas prices end 2020.

On high tariffs, there is nothing the government can do to control the energy composition which is predominantly exogenous forces at work. I have stressed it is only in the regulated part of the electricity system that one can scrutinise to extract relief. And this is the grid operation. The use-of-system rate at S$0.0594 per kWh before GST seems disproportionately high which contributes to almost 50% of SP profits. Unless this revenue is in a sinking fund for future infra developments, it is up for debate for a reduction.

The status of SRMC significantly lower than the LRMC has been very pronounced since 2013. This is brought about by massive over capacity. The situation creates negative spark spreads. Spark spread is the power generation cost (USEP) less fuel cost. A negative spark spread makes it impossible for gencos to turn a profit. This is not sustainable for the country's economy in the long run. It was an albatross on the neck of the Singapore electricity system for years.

After the 2020 gas price increase, the SRMC skyrocketed. The USEP increased substantially and thus wholesale prices were driven up, moving the spark spread into positive territory. This happened with only a slight decrease in the supply cushion. The extreme elasticity to a small downward movement in supply cushion indicates high possibility of price fixing or collusion in the auction market. I have written about profiteering which the EMA is not paying attention. This financial year, watch out for gencos' bumper net profits in the billions.

(Read here). 

Let's stop whining : Each time tariff goes up, we cuss about SP's billion $ profits. As I explained, SP sales to non-contestable consumers are all fully hedged, meaning they make zero profits. SP profits are from overseas and operating the Singapore grid.


2, SMRT
The SMRT as operator, relies on revenue from farebox collection, augmented by some rental and advertising income. The operator has no means to subsidise fares in inflationary cost movements. The heart of the weakness in our system as compared to the most efficient system in the world, the Hong Kong MRT, is SMRT has no benefit of Land Value Capture. This critical opportunity for revenue is loss as the government rejects delayed gratification opting instead for immediate national reserves build up by selling land in the vicinity of the train stations to private commercial developers. I brought this up 4 years ago.

(Read here).

Let's stop whining : Each time there is a fare increase, we cuss at SAF generals and SMRT making huge profits. It's a structural problem. Note technical issues and management competency is not my major concern.

3. AIM Saga
Regarding the sale of the computer system of the 16 town councils, I highlighted 3 years ago 2 serious points. (1) It was a lie. The town councils had no ownership of the software Oracle Financial 11. They have merely licensing right to use, not ownership. (2) Khaw said in parliament that PAP owned the consultancy firm AIM. Either he lied (PAP never owns AIM) or PAP has breached the rule of parbus (no political parties in business) under pain of being struck off the Register of Societies.

(Read here and here).

Let's stop whining : The brickbats have all been political and sympathies to the opposition taking over the Aljunied GRC ward. The 2 core matters I pointed out are astounding serious revelation that need closure..

4. CECA
I highlighted the dangers of CECA in ways no one spoke about. These were - (1) we are importing geo-politics, bringing with this a cultural-homogenity shock. Amongst these issues, I raised one particular point which some whisperers said in the week the blog was published, the cabinet held a meeting to discuss. I am sure it was just a coincidence. The specific point was the influx of Hindu Indians are encroaching into the space of our local born true blue Singaporean Tamils. (2) I wrote about the hollowing out of our knowledge base as local PMETs get replaced in significant numbers.

(Read here).

Let's stop whining : All the noises in social media are centred on locals getting displaced. It is a huge problem the government refuses to acknowledge. It is a political time bomb. I appreciate people have been hurt and families suffered. But for me, far more important is the long term national interest impaired by the 2 issues I wrote about. Subsequent to my blog I have noticed several others have written and touched on more or less similar language I used for the 2 issues. I'm not taking credit. It's just a good coincidence.

5. National reserves
Social media discussion has been fragmented in terms of definition and quantification. I have written extensively on this and tried to wrap the idea around Singaporean heads the simple meaning of 'national reserves' grounded on ownership. This is in line with a careful reading of the constitution where it references past reserves. It should be what we own collectively. To this extent, so-call reserves funded by debt do not belong to us. Recognising this differentiation means accepting the hard cold fact that the actual national reserves are never to be anywhere near what several local pundits have consistently indicated, nor what foreign financial data points tell us. I have consistently stressed all those massive figures put out there by various parties are way out of wack.

(Read here and here).

Let's stop whining : Stop the incessant barrage about cheating and money disappearing. Try to understand what is and what is not our national reserves. For example, so many have this erroneous  idea MAS forex reserves are part of our national reserves. We have not defined and identified them, how can we even try quantify.

6. A compliant court
The suggestion of corruption or a court that is compliant to the ruling party is not helpful. It is in fact a  dangerous treading on defamation if one has no evidence. I have explained that in every country, the judiciary has an ideological base on whether its persuasion is on the red light or green light theory. Those that lean to Red light feel the courts should check the powers of the Executive (government) and they tend to be confrontational.. The US and Philippines are two examples The green light takes a more constructive approach.  UK and most commonwealth countries are examples. There is no right or wrong. It is an ideological divide. Singapore court has tended to be green light theorists with the underlying belief that the government knows best what it is doing.  Chief Justice Chan SK basically laid out in 2010 the message not to seek the courts to change bad laws - do that through the ballot. Put it another way, do not seek redress for bad government via the courts, do that through legal political process. Judiciary review is thus very rare. It is only done when the court is convinced the government's action is 'irrational' as to have 'Wednesbury unreasonableness', or extreme bias. 

My opinion is, the only platform for active debate by concerned citizens is the establishment of some mechanism to allow an independent body to trigger judicial reviews. If I were an opposition figure, I would want to own this platform.

(Read here).

Stop the whining : Stop the outcry about political bias each time we see a court decision we don't like.

7. HDB prices
Leaseholds are wasting assets that are written off to zero value. There is nothing to argue. As to affordability, I show 2 survey reports that indicate the widely held perception of non-affordability is perhaps misplaced. More importantly, I suggested 2 revolutionary ideas that HDB might consider to manage both the supply and demand side to insert some means of 'just pricing' to lower prices. These are (1) HDB assumes the dictates of a market-maker and (2) the setting up of a resale HDB market for permanent residents.

(Read here).

Let's stop whining : Stop chanting leaseholds run out to zero and HDB flats returning to government, CPF running out. Encourage debate on ideas that can better manage prices and improve affordability.

8 Hyflux
The demise of Hyflux was due to the failure of it's Tuaspring power generation plant. What happened at Tuas does not seem to have been adequately explained. Its management seemed to put blame on the increase in oil prices. The actual reason is Tuaspring opened for business in 2016 and ran smack into an industry facing massive over capacity since 2013. This over capacity has depressed generation prices from 2013 to current times. The spark spread has been in negative territory for years making profitability impossible. It is fair comment that Hyflux moved out of its core competency of water technology into a commodity market and at the start of a learning curve, not cognisant of the complexity of the power generation situation when Tuaspring came onstream.

In my opinion, relief for investors of the perpetual bond issue lies on pinning accountability on the issue manager (DBS?) on inadequacy in explaining the risk exposure in the Offer Information Statement.

(Read here).

Let's stop whining : Retail investors got burnt. A bad investments is what it is. Stop blaming the government for poor economic forecast upon which Hyfly made its investment decision.


Conclusion

I have other fun blogs. The above are serious ones where I shared views not raised by others in the social media, at least not the online media and other platforms I visit. I would think not even in academia. In the common interest of our nation, my humble wish is more debate to expand on the issues and ideas I outlined above. The least we should do, is to wise up and avoid whining on nitty gritties, which unfortunately persists to this day. Let's not miss the wood for the trees.

This platform has withdrawn it's subscriber widget. If you like blogs like this and wish to know whenever there is a new post, click the button to my FB and follow me there. I usually intro my new blogs there. Thanks.