Friday, July 31, 2015

Market manipulation goes global

July 30

Market manipulation has become standard operating procedure in policy circles around the world. All eyes are now on China’s attempts to cope with the collapse of a major equity bubble.

But the efforts of the Chinese authorities are hardly unique. The leading economies of the West are doing pretty much the same thing — just dressing up their manipulation in different clothes. Take quantitative easing (QE), first used in Japan in the early 2000s, then in the United States after 2008, then in Japan again beginning in 2013, and now in Europe.

In all of these cases, QE essentially has been an aggressive effort to manipulate asset prices. It works primarily through direct central-bank purchases of long-dated sovereign securities, thereby reducing long-term interest rates, which, in turn, makes equities more attractive.

Tuesday, July 28, 2015

The Likely Cause of Addiction Has Been Discovered, and It Is Not What You Think


The rats with good lives didn't like the drugged water. They mostly shunned it, consuming less than a quarter of the drugs the isolated rats used. None of them died. While all the rats who were alone and unhappy became heavy users, none of the rats who had a happy environment did. 

Issues, candidates matter more than strategic timing advantage


JULY 27, 2015

Last Friday’s release of the Electoral Boundaries Review Committee’s (EBRC) report has generated intense speculation as to when Parliament will be dissolved and the Writ of Election issued.

The report, which took about two months to prepare, came 11 days after Prime Minister Lee Hsien Loong announced in Parliament that he had convened the EBRC in May. Its publication was without undue delay — it was submitted to PM Lee on July 21 and published on July 24.

Predictably, the EBRC duly delivered on its terms of reference by reducing the average size of Group Representation Constituencies (GRCs) from five to 4.75, and adding an additional single-member constituency (SMC) and one GRC. In total, 89 seats will be up for contest in the next General Election (GE).

Monday, July 27, 2015

Singapore's 'Chinese dilemma' as China rises


JUN 1, 2015

How will Singapore fare, as a majority Chinese society in the region, with a China expected to be more assertive in the future?

Wang Gungwu
Chairman of the East Asian Institute and a professor at the National University of Singapore

THE United States talks about re-balancing to Asia; the Association of South-east Asian Nations (Asean) wants a strategic balance between China and America. After 50 years, Singapore has maintained, like Asean, that it does not want to have to choose between America and China in the region.

But what of China? What does China want?

As Singapore celebrates its Jubilee Year and looks towards the future, it has to do so with a hard-headed look at its biggest neighbour China. Singapore needs to have a realistic assessment of China's intentions, America's resolve, and the place of Asean and Singapore in the region, in order to chart its course in the geopolitical future world.

Imagining what life will be like in the next 50 years

This story was first published in The Straits Times on Jan 29, 2014

Chan Heng Chee

Chairman of the Lee Kuan Yew Centre for Innovative Cities, Singapore University of Technology

IF I am still alive in 50 years, I will have the prospect of living to be 150 or more. This is not a fanciful statement.

Already, the number of centenarians are increasing in many countries. According to United Nations estimates, there are 316,000 centenarians in the world today.

Dr Aubrey de Grey, the chief science officer at the California-based Sens Foundation, which studies the social implications of scientific rejuvenation research, suggests that there is a possibility that people may live up to 1,000 years with the new medical and technology innovations.

If that is the case, people in rich countries will live longer; people in poor countries will not have the same advantages.

Of course there is a debate about whether Dr de Grey has made a compelling case. But the fact remains that people do seem to be living longer.

How will people live their lives when they are a healthy 100, 109 or 120? Will they think of age differently?

SG100: 'Green' domes and ideas hub

Lim Say Boon

27 July 2015

An economist visualises Singapore as a vibrant ideas hub with climate-controlled domes to keep global warming at bay

Singapore in 50 years will likely be hotter but less crowded, highly skilled and even more connected to the international centres of capital, technology and learning.

None of the above is based on science. It is an optimist's view of the future, extrapolated from decisions Singaporeans will make over the decades in response to the challenges coming our way. Understanding the journey is more important than any deterministic vision of SG100.

With that optimist's lens in place, let us take a journey into the future.


By 2065, the debates of 50 years earlier over property prices, migrants and social benefits have become irrelevant.

National fiscal discipline or European solidarity

Jonathan Eyal
Europe Correspondent

20 Jul 2015

It's not just Greece at stake in the crisis. It's also the rival visions of Germany and France on what the European Union means: individual fiscal discipline or 'solidarity', with the rich helping the poorer nations.

LONDON • Greece was spared meltdown, at least for the moment. But only at the risk of opening up a much bigger dispute in Europe, between the European Union's two core nations: Germany and France.

As the crisis reached its peak, the French were adamant that everything should be done to avert Greece's bankruptcy, while the Germans argued that no great harm will come from Greece's eviction from the euro currency zone, and no further cash should be wasted on a Greek state which has elevated bad governance and ingratitude to the level of art.

In a classic European way, a compromise was eventually found: the French succeeded in keeping Greece in the euro zone, while the Germans succeeded in imposing on Greece some of the toughest and most humiliating economic conditions ever recorded in modern Europe.

Study Finds Gas Powered Cars Better for Environment Than Electric



A study published by the nonpartisan National Bureau of Economic Research found that on a per-mile basis electric cars were on average worse for the environment when compared to their gas-run counterparts.

The study concluded that on average per mile, electric cars were half a cent worse for the environment than gas-powered vehicles.

The environmental effects of the different vehicles depended largely on where they were driven. In urban areas, electric vehicles performed better, while the opposite occurred once the cars left the city. In Grand Forks, North Dakota, electric vehicles were 3 cents worse for the environment per mile, while in Los Angeles, they performed 3.3 cents better per mile.

Saturday, July 25, 2015

Exclusive: Singapore Prime Minister Lee Hsien Loong Speaks Candidly with TIME

On Aug. 9, 1965, Singapore became an independent state. A half-century of unparalleled prosperity later, this Asian trading hub faces very different challenges 

As Singapore gears up to celebrate the 50th anniversary of its independence, the city-state once dismissed as a “little red dot” at the midpoint of regional maps now serves as the epicenter of Asian-style development. By combining Confucian values with state-sponsored capitalism, Singapore in little more than a generation moved “from third world to first,” as a memoir of founding father Lee Kuan Yew puts it.

In truth, Singapore — a mix of majority Chinese and smaller Malay and Indian communities — wasn’t quite as backward upon independence as its boosters claim. The city-state’s economic development was unmatched by individual political liberties. The nanny state admirably manicured Singapore but it had little patience for dissonant voices. Still, as TIME’s anniversary special on Singapore reports in this week’s magazine, the “little red dot” claims outsized geopolitical influence in the region and is a magnet for migrants worldwide.

Singapore private home vacancy hits 10-year high

By Eileen Poh, Channel NewsAsia

24 Jul 2015 19:18

Latest URA numbers show there were 25,071 completed but unoccupied private homes as at Jun 30. This is higher than the 22,346 unoccupied units at the end of March and the largest number on record.
SINGAPORE: The vacancy rate for private homes in Singapore hit a near-10-year high of 7.9 per cent in the second quarter of this year, Urban Redevelopment Authority (URA) data released on Friday (24 July) showed, indicating there is an oversupply in the residential market.

Friday, July 24, 2015

Risks and Entrepreneurship - Why Singapore lags

First, a lament that Singaporeans are not risk-takers.
Then, a realistic/cynical view of entrepreneurs
Are we expecting too much of Singaporeans?

Thursday, July 23, 2015

Why we must have foreign patients

Jul 22, 2015,

Doctors need more patients to hone their skills, and Singapore patients benefit when a large pool of patients fuels biomedical innovation.

Jeremy Lim 
For The Straits Times

Medical tourism has been characterised as being about economic benefits and about attracting rich foreigners. Not any more - it's not about them, it's about us.

In 2003, then Acting Health Minister Khaw Boon Wan launched SingaporeMedicine, a national initiative to establish and enhance Singapore's position as the medical hub of Asia. The ambitions were bold: one million foreign patients a year by 2012, the creation of 13,000 jobs and a contribution of $3 billion to the economy, or roughly 1 per cent of gross domestic product (GDP).

Since then, SingaporeMedicine has disappeared from policy discussions, becoming an agenda policymakers appear ready to excise from the collective memory. The SingaporeMedicine website has even been taken down, and once bold signage in at least one public hospital proclaiming "International Medical Services" has now quietly shortened to an ambiguous "IMS".

What happened?

Wednesday, July 22, 2015

Effect of poverty on brains may explain poor kids' lower test scores

JULY 21, 2015

NEW YORK — The effect of poverty on children’s brains may explain why poor youngsters tend to score lower on standardised tests compared to wealthier students, a new study suggests.

“What was already discovered is there is an achievement gap between poor children and middle-class children,” the study's senior author Seth Pollak told Reuters Health. “Even when they move to better neighbourhoods, children growing up in poor families tend to do less well in school than their less poor counterparts.”

What's more, researchers have found in recent years that poverty is linked to worse brain development, said Professor Pollak.

“This study closes the loop and adds the missing piece,” he said.

The US, China and the productivity paradox


JULY 22, 2015

In the late 1980s, there was intense debate about the so-called productivity paradox, which is when massive investments in information technology (IT) do not deliver measurable productivity improvements. That paradox is now back, posing a problem for both the United States and China.

Back in 1987, Nobel laureate Robert Solow famously quipped: “You can see the computer age everywhere except in the productivity statistics.”

The productivity paradox seemed to have been resolved in the 1990s, when the US experienced a spectacular productivity renaissance. Average annual productivity growth in the country’s non-farm business sector accelerated to 2.5 per cent from 1991 to 2007, from the 1.5 per cent trend in the preceding 15 years. The benefits of the Internet Age had finally materialised. Concern about the paradox all but vanished.

But the celebration appears to have been premature. Despite another technological revolution, productivity growth is slumping again. And this time, the downturn is global in scope, affecting the world’s two largest economies, the US and China, most of all.

Over the past five years, from 2010 to 2014, annual US productivity growth has fallen to an average of 0.9 per cent.

Tuesday, July 21, 2015

Future China Global Forum

China will maintain 7% growth rate over next few years: Former Hong Kong chief executive

By Eileen Poh, Channel NewsAsia

20 Jul 2015

Speaking at the opening of the Future China Global Forum held at the Shangri-La Hotel, Mr Tung Chee Hwa says the Chinese economy has the ingredients for continued growth, including great elasticity, enormous experience and leadership competence.

Gifted Education Programme (GEP): Separating myths from truths


JUL 20, 2015,

It's not another rat race, and there is less segregration from mainstream pupils today

Dennis Chan
Deputy Money Editor

Every once in a while, I would read in the newspapers about calls to do away with the Gifted Education Programme (GEP).

Rarely have I read articles that defend the scheme.

I suppose this has something to do with the fact that, each year, only 1 to 1.5 per cent, or 500 to 550 pupils, in a cohort of about 50,000 are admitted to the GEP.

For the vast majority of parents, GEP does not figure at all on their radar. It didn't in my case.

Honestly, I had never heard of the GEP until five years ago, when the older of my two daughters, then in Primary 3, was shortlisted for a final selection test.

By the grace of God, Yanrong cleared the test and was one of 564 pupils selected for the 2011 intake.

As she had benefited from the programme, it is only right that I lend a voice in support of it. But instead of regurgitating the raison d'etre of the GEP, I would like to rebut some common criticisms.

Monday, July 20, 2015

China’s impossible dream: A capitalist stock market without large losses


JULY 20, 2015

The recent dizzying plunge in the Shanghai and Shenzhen stock exchanges has posed a unique test for China’s Communist rulers. So long as the markets were rising, the paradox of vigorous capitalist development overseen by the world’s largest and strongest Communist party confounded only academics and old-school Marxists. As the Chinese Communist Party (CCP) elite and their relatives, foreign financial institutions and some Chinese small investors (enabled by margin lending) made money on stocks, no one bothered to comprehend the mutant creature they were milking.

But now, as the realisation sinks in that Chinese stock prices will not keep rising indefinitely, the CCP is taking desperate, if clumsy, measures to control the correction. All new initial public offerings have been halted and much trading has been curtailed; the central bank has been asked to help the China Securities Finance Corporation induce investors to buy shares and thus stabilise the market. Indeed, even the country’s sovereign wealth fund has gotten in on the act.

But, unlike in other capitalist economies, money is not the only tool at the authorities’ disposal. If your brokers in China advise you to sell shares, they must be careful not to appear to be rumour-mongers, subject to official punishment. And there are reports that the sales of large holdings may trigger investigations by the authorities. Causing public disorder or financial instability can be a serious offence in China, where conspiracy theories about foreigners’ efforts to undermine the economy abound.

What Chinese officials desire is a capitalist stock market without the possibility of large losses that can shake confidence in the CCP’s credibility and control. But that is a market that no one has yet invented.

Things that could make the S'pore crockpot boil over

SG+50: Future Trends 2065

Ho Kwon Ping

20 Jul 2015

The high-costs trap. Youngsters pushing the limits of the law. And a political system unable to accommodate a rising opposition. These are risks to the Singapore system in the next five decades.

The most dramatic, almost rhetorical question posed by pundits about Singapore's next 50 years is the apocalyptic one: Will there even be a Singapore?

Let's just have SMCs and three-member GRCs

Jul 19, 2015,

Han Fook Kwang

Question: How many ways are there to configure the Group Representation Constituency (GRC) system?

Answer: Several hundred permutations, at least.

You could have most of the 87 seats as Single-Member Constituencies (SMCs) or go the whole hog with 14 six-member GRCs. Between these two extremes there are any number of combinations of SMCs and three-, four-, five- or six-member GRCs.

In the real world, though, the possibilities are more limited, but still Singapore has seen several combinations being tried since the scheme was introduced in 1988.

The truth of the matter is that tinkering with different GRC sizes isn't a productive exercise for any party any more.

The only consideration worth retaining is that of ensuring adequate minority representation, and the best way to do this is to revert to how it was first conceived in 1988, with a combination of SMCs and three-member GRCs.

Chinese Democracy Isn't Inevitable

Can a political system be democratically legitimate without being democratic?

MAY 29, 2015

The flaws in China’s political system are obvious. The government doesn’t even make a pretense of holding national elections and punishes those who openly call for multiparty rule. The press is heavily censored and the Internet is blocked. Top leaders are unconstrained by the rule of law. Even more worrisome, repression has been ramped up since Xi Jinping took power in 2012, suggesting that the regime is increasingly worried about its legitimacy.

Some China experts—most recently David Shambaugh of George Washington University—interpret these ominous signs as evidence that the Chinese political system is on the verge of collapse. But such an outcome is highly unlikely in the near future. The Communist Party is firmly in power, its top leader is popular, and no political alternative currently claims widespread support. And what would happen if the Party’s power did indeed crumble? The most likely result, in my view, would be rule by a populist strongman backed by elements of the country’s security and military forces. The new ruler might seek to buttress his legitimacy by launching military adventures abroad. President Xi would look tame by comparison.

Sunday, July 19, 2015

The Big Read: Despite push for public transport, a love for cars endures

Sunday 19 July 2015

[Vehicle Ownership, Public Transport, and the policies that work and those that didn't.]

It's true, teens can't be punished like adults

The teenage brain

Andy Ho
Senior Writer

Jul 18, 2015

Teens tend to take more risks because their brains are not fully developed yet

In the past decade, advances in neuroscience have given new insights into old problems, ranging from drug addiction and post-traumatic stress disorder to adolescent shenanigans.

For example, if the new neuroscience shows that a drug addict's brain is physically dissimilar to a non-addict's brain in ways that make the former more prone to addiction, then we must ask if his infractions of the law ought to be treated less punitively.

It is with such considerations in mind that The Straits Times is publishing a six-part series starting today, with a focus on what the new neuroscience says that is causing experts to revise how they approach these issues. This week, we focus on the teenage brain. Should teens be treated like mini-adults, deserving of society's harshest punishment, when they break the law? New neuroscience findings suggest not.

Act your size

By Invitation

David Skilling

Jul 18, 2015,

A small-country perspective on the Greek crisis

The Greek crisis rolls on even after last weekend's agreement. There are sharp tensions within Europe as well as growing doubts about the political and financial sustainability of the deal.

At the core of the crisis is a failure to properly understand the importance of national scale. Small countries are not scaled-down versions of large countries. Small countries face more policy constraints, are more exposed to shocks, and have a more limited margin for error. It matters that Greece is a small country, with a population of 11 million people.

This small-country perspective helps to explain the origins of the crisis, why it has been mismanaged and misinterpreted, and provides guidance on what might be done. The importance of national scale has been missed by three groups - the Greek government; the creditor institutions; and large-country pundits.

Saturday, July 18, 2015

Does democracy lead to good governance?

July 17

After gaining independence from Britain in 1947, India was something of a poster child for the virtues of democracy — in stark contrast with China, which became a Communist dictatorship in 1949.

Until the 1970s, it was widely argued that, while both countries suffered from extreme poverty, underdevelopment and disease, India’s model was superior because its people were free to choose their own rulers.

With China’s economic boom, however, the counterargument — that a repressive political system is more conducive to development — has gained currency. But while China’s recent performance has been spectacular, India’s model may well stand up better in the long run.

Thursday, July 16, 2015

A Universal Basic Income Is The Bipartisan Solution To Poverty We've Been Waiting For

What if the government simply paid everyone enough so that no one was poor? It's an insane idea that's gaining an unlikely alliance of supporters.

There's a simple way to end poverty: the government just gives everyone enough money, so nobody is poor. No ifs, buts, conditions, or tests. Everyone gets the minimum they need to survive, even if they already have plenty.

This, in essence, is "universal minimum income" or "guaranteed basic income"—where, instead of multiple income assistance programs, we have just one: a single payment to all citizens, regardless of background, gender, or race. It's a policy idea that sounds crazy at first, but actually begins to make sense when you consider some recent trends.

The first is that work isn't what it used to be. Many people now struggle through a 50-hour week and still don't have enough to live on. There are many reasons for this—including the heartlessness of employers and the weakness of unions—but it's a fact. Work no longer pays. The wages of most American workers have stagnated or declined since the 1970s. About 25% of workers (including 40% of those in restaurants and food service) now need public assistance to top up what they earn.

Spectre of 'Grexit' will return to haunt Europe

Jonathan Eyal

Europe Correspondent

JUL 15, 2015,

LONDON • The Greek Parliament is likely to approve today a package of laws demanded by the European Union as a precondition for negotiating a new €85 billion (S$127.5 billion) credit package designed to avert the country's bankruptcy.

However, it is difficult to see how this new bailout plan with its draconian political conditions can revive the moribund Greek economy; at best, Europe has bought itself a year's respite before the spectre of Greece's eviction from the euro zone returns with a vengeance.

The latest bailout deal is the toughest and most humiliating in the history of the EU. The Greeks are not only expected to overturn all the austerity-busting measures they implemented earlier this year, but also to increase sales taxes, cut pensions and accept the return of the hated international financial inspectors. The inspectors will not only monitor the country's performance, but are also empowered to veto any future measure which they consider unacceptable. In the words of one European leader, Greece has now become "a protectorate of Europe".

Yet the most humiliating provision is the requirement to place up to €50 billion worth of state-owned assets into a special agency, whose task will be to sell them, and use much of the proceeds to repay Greece's creditors. The move replicates almost exactly the establishment during the late 19th century of the so-called International Committee for Greek Debt Management, run chiefly by Britain and France, which took physical control of Greek ports and is remembered as an odious institution.

Tuesday, July 14, 2015

What it takes to keep the Govt on its toes

[From April 2014.]

Apr 26, 2014

By Tham Yuen-c

PEOPLE have increasingly come to expect checks and balances in Parliament, believing that it can keep the Government on its toes, panellists at a Straits Times roundtable said.

But whether the checks necessarily have to come from an opposition party was a point of contention between Workers' Party chairman Sylvia Lim and People's Action Party MP Hri Kumar Nair during a spirited discussion last Wednesday to discuss findings of a Straits Times survey.

Ms Lim said an opposition party would be able to vote against the Government in the House, as the WP has. And since the 2011 General Election, people have become more convinced that this has led to "better service" from the Government.

But Mr Nair countered that Workers' Party MPs had not taken a stand on many national issues, nor provided alternative views, and were less effective at challenging the Government than PAP backbenchers.

In the ST survey, the need for checks and balances on the Government was ranked very important by 35 per cent of those asked to rate the importance of six factors in their choice of MPs.

In contrast, fewer than 30 per cent of respondents had listed the other factors, including policies, candidate and party attributes, as very important.

Is China’s use of state control, money to stem stocks rout doomed to fail?

By Tom Mitchell, Gabriel Wildau and Josh Noble

July 13

Ms Ginger Zengge had a good feeling about the stock market. Though the Shanghai Composite Index had risen 150 per cent over the previous 12 months and just hit a seven-year high, she saw a “buy” signal that other investors had probably overlooked: President Xi Jinping’s birthday.

“When the index dropped on June 15, which happened to be Mr Xi’s birthday, I thought, ‘Yes, now is the time to buy!’,” said Ms Zengge, 26, who works for a security ratings company in Beijing. She bought more shares later that month.

Unfortunately for Ms Zengge, she decided to buy near the very top of a remarkable bull run in China stocks. After reaching a peak of 5,166.35 on June 12, the Shanghai index fell 30 per cent in only three weeks. By July 3, the Shanghai and Shenzhen exchanges shed almost 18.6 trillion yuan (S$4.1 trillion) in market capitalisation.

Monday, July 13, 2015

The Cheapest Generation

Why Millennials aren’t buying cars or houses, and what that means for the economy



In 2009, Ford brought its new supermini, the Fiesta, over from Europe in a brave attempt to attract the attention of young Americans. It passed out 100 of the cars to influential bloggers for a free six-month test-drive, with just one condition: document your experience online, whether you love the Fiesta or hate it.

Young bloggers loved the car. Young drivers? Not so much. After a brief burst of excitement, in which Ford sold more than 90,000 units over 18 months, Fiesta sales plummeted. As of April 2012, they were down 30 percent from 2011.

Don’t blame Ford. The company is trying to solve a puzzle that’s bewildering every automaker in America: How do you sell cars to Millennials (a k a Generation Y)? The fact is, today’s young people simply don’t drive like their predecessors did. In 2010, adults between the ages of 21 and 34 bought just 27 percent of all new vehicles sold in America, down from the peak of 38 percent in 1985. Miles driven are down, too. Even the proportion of teenagers with a license fell, by 28 percent, between 1998 and 2008.

The lose-lose political problem of AHPETC

Jul 12, 2015

The WP may be seen as playing the victim card, while the PAP may come across as being hectoring and moralising
Rachel Chang

Assistant Political Editor

The trouble at the Aljunied- Hougang-Punggol East Town Council (AHPETC) is the epitome of a "lose-lose" political crisis. By now, most voters wouldn't be able to tell you the specifics of the long-running saga - only that neither side comes off well.

In a way, the findings of serious lapses in compliance and governance at the Workers' Party-run town council have had an alcoholic effect on both the WP and the People's Action Party (PAP) Government, enhancing their least likeable characteristics and bringing them to fore.

The former has been sullen, silent and obfuscatory via its favourite victim card; the latter, comes across as hectoring, moralising, and addicted to the last word. The lapses found at AHPETC by the Auditor-General can be grouped into three categories:

Sunday, July 12, 2015

PM Lee tackles questions on governance at SG50+ conference

In a session moderated by Dr Fareed Zakaria, Prime Minister Lee Hsien Loong talks candidly on governance in Singapore and the limits to freedom of speech to maintain racial and religious harmony. 

Saturday, July 11, 2015

Ngiam Tong Dow & Ho Kwon Ping - "How Can Singapore Future-proof its Relevance for the Next 50 Years. "

DBS Asian Insights Conference
Ngiam talks about what scholars and civil servants and the civil service should do to future-proof Singapore. 

Ho de-romanticise entrepreneurship.

Friday, July 10, 2015

China, Philippines and Tension in the South China Sea

[News articles on the tension in the South China Sea, between China and the Philippines.]

China stems stocks rout, but market faces lengthy hangover


SHANGHAI — The increasingly frantic attempts by Chinese authorities to stem a stock market rout were finally rewarded yesterday as Chinese shares staged their best one-day gain in six years, but analysts warned the costs of heavy-handed state intervention are likely to weigh on the market for a long time.

The benchmark Shanghai Composite Index jumped 5.8 per cent, the most since 2009, to close at 3,709.33 after a choppy trading session where it had fallen as much as 3.8 per cent. About 600 stocks rose by the daily 10 per cent limit but trading in another 1,439 companies were halted on mainland exchanges, locking investors out of 50 per cent of the market.

The Chinese rebound helped to lift sentiment elsewhere in the region, with Hong Kong’s Hang Seng Index surging 3.7 per cent and Japan’s Nikkei-225 Index rising 0.6 per cent, although Singapore’s Straits Times Index closed 0.5 per cent lower.

Seoul: North Korean leader has so far executed 70 officials


SEOUL — Young North Korean leader Kim Jong Un has executed 70 officials since taking power in late 2011 in a “reign of terror” that far exceeds the bloodshed of his dictator father’s early rule, South Korean officials said today (July 9).

South Korean foreign minister Yun Byung-se, at a forum in Seoul, compared Mr Kim Jong Un’s 70 executions with those of his late father, Kim Jong Il, who he said executed about 10 people during his first years in power.

An official from South Korea’s National Intelligence Service, who refused to be named, citing office rules, confirmed that the spy agency believes the younger Kim has executed about 70 officials but wouldn’t reveal how it obtained the information.

Mr Yun also said that the younger Kim’s “reign of terror affects significantly” North Koreans working overseas by inspiring them to defect to the South, but he also didn’t reveal how he got the details.

How China is losing South-east Asia

Ravi Velloor
Associate Editor (Global Affairs)

JUL 3, 2015

The security dimension was that the US and Japan were making it harder for China to enter the Western Pacific through the Yellow Sea and the East China Sea. The South China Sea, therefore, provided a natural shield against their possible intervention.

The region may depend on China for growth - but that dependence is mutual, which is something China seems to forget.

A global crisis of water quality looms


JULY 9, 2015

A major global concern at present is that the world will run out of water to meet the needs of its burgeoning population. Since water is needed for every aspect of life, the fear is that there will not be enough water for an estimated 9.3 billion people by 2050 and their numerous water-related needs.

However, the most pressing global water problem of the future will be water quality and not quantity. The quality of water is progressively deteriorating in nearly all the countries of the world.

Even in developed countries such as the United States and United Kingdom, the situations are not very rosy. According to the US Environment Protection Agency, 40 per cent of the surveyed rivers are not fit for swimming and fishing. It estimates 850 billion gallons of untreated discharges flow into water bodies annually, causing seven million illnesses each year.

In London, whenever there is more than 2mm of rain, untreated raw sewage flows into the River Thames. This occurs once a week. Each year, 30 million tonnes of raw sewage are discharged into the Thames.

The situation is significantly worse in emerging economies and developing countries, where all water bodies in or around urban centres are already heavily contaminated.

In China, water from more than half of its largest rivers and lakes has been declared to be unfit for human consumption. More than half of groundwater in northern China is so contaminated that it is not even fit for bathing, let alone drinking.

Why Are Solar Panels So Inefficient?

by Steve Byrnes, Postdoc in Physics, Harvard University, on Quora,

Nov 4 2013

The second law of thermodynamics forbids a 100%-efficient solar cell. More specifically, Carnot’s theorem applies to photovoltaics and any other solar energy system, where the hot side of the “heat engine” is the temperature of the sun and the cold side is the ambient temperature on earth. (This is slightly oversimplified.) The result is, for a system with sunlight concentration (lenses and mirrors and motors to follow the sun as it moves in the sky), the maximum efficiency is ~85%, and for a system that does not track the sun, the maximum efficiency is ~55%. (For details see my calculations here.)

On an overcast day, tracking the sun doesn’t work, so ~55% is the theoretical maximum.

Pessimism about China's Economy

Opinion: China’s stock-market crash is just beginning

July 8, 2015

The underlying problem is that the investing culture is immature


Since the Shanghai Composite index dropped from a 52-week high around 5,178 on June 12, it’s been downhill all the way.

In just three weeks, stocks listed on mainland China’s most prominent exchange tumbled 30% from their seven-year highs. The even more speculative ChiNext Index has lost 42% of its value over 21 days.

Investors and traders who piled into Chinese shares over the past year, causing Shanghai to rise 150% and other markets to catapult even more dramatically, faced margin calls on their highly leveraged positions and started selling with both hands and both feet.

It was the biggest rout in this volatile market since 1992, and it prompted the Chinese government to take strong measures.

Last week, the Bank of China cut short-term interest rates for the fourth time this year. Regulators relaxed margin requirements and cracked down on short sellers, while state-run media tried to calm jittery investors with happy talk. That did little to stanch the hemorrhage.

Over this past weekend, government authorities and “private” Chinese brokerages and companies announced even more dramatic moves to prop up stocks:
  • Brokerages and mutual-fund companies said they would buy billions of dollars’ worth of Shanghai shares.
  • A state-owned investment firm said it would buy China-based ETFs.
  • Twenty-eight companies said they would put planned initial public offerings on hold, as IPOs had been the focus of the most intense speculation.
  • Regulators also increased the kinds of assets that can be used as collateral to buy stocks, to include — are you ready for this? — people’s homes. I’m not making this up.
The goal: Show retail investors that the all-powerful Chinese government had their backs and that the “Beijing Put” was alive and well.

Except it wasn’t. Shanghai opened up a strong 8.5% on Monday, despite Greece’s resounding “no” vote in Sunday’s referendum. But shares slipped throughout the trading day and closed up only 2.5%. On Tuesday, Shanghai slipped 1.3%, and on Wednesday plunged 5.9%.

That was a clear sign that the government had taken its best shot and failed. Which means that the most likely direction for Shanghai, Shenzhen and other mainland exchanges is down, down, down.

Morgan Stanley, which made a good “sell” call on China weeks ago, now expects Shanghai to fall as low as 3,250 by mid-2016. Citigroup analysts told clients the selloff has a “long way to go.”

I agree, but I think it could go much, much lower.

As I’ve written many times, China, Brazil, Russia and other emerging markets are suffering through secular bear markets that will last years. Since Chinese stocks represent more than 20% of some emerging-markets ETFs, the pain will likely continue well into this decade.

Secular bear markets feature sudden, violent rallies and mini–bull markets that fool people into thinking they’re the genuine article. In real bull markets, indexes repeatedly top their previous highs; in bear markets, they never do.

So it was an ominous sign when Shanghai hit 5,000 and then reversed sharply. The previous all-time high was over 6,000 in October 2007. We thus have an eight-year down trend.

Back in 2007, China was booming as the government rolled out massive new infrastructure ahead of the 2008 Olympic Games, which by any measure were a huge success.

But after the financial crisis, the Great Recession and a domestic real-estate bust, China is struggling to hit the government’s 7% economic-growth target. When the property market crashed, desperate Chinese authorities encouraged novice investors to channel their speculative energies into the stock market.

Now that’s reversing quickly, as massive margin calls swamp the government’s efforts to stop the rout.

The underlying problem is that while the Chinese economy has made great strides and become a global powerhouse, China’s investing culture remains backward and immature.

As John Mauldin wrote in his “Thoughts From the Frontline” e-letter this week: “Chinese individual investors are not primarily ‘value’ investors. Sky-high valuations don’t seem to faze them. They are primarily momentum investors who buy whatever is moving and sell whatever is falling.

“According to my friends who go to casinos and watch the Chinese gamble, they tend to jump on a ‘trend’ such as red coming up on the roulette table repeatedly — never mind that the odds are only ever 50-50. Red is seen as hot and therefore the way to bet. That carries over into trading styles. …”

When highly unsophisticated investors run into trouble, they panic quickly and try to get out at any price. The same inexperienced bettors who drove Shanghai up to 5,000 will take it way down, maybe to the last bear-market low above 1,700 — or maybe even lower, to 1,500, before it finds a long-term bottom.

When Shanghai was peaking at 5,000 in June, I gave you five words of advice: Get. The. Hell. Out. Now.

To which I’ll add five more: And. Stay. The. Hell. Out.

Howard R. Gold is a MarketWatch columnist and founder and editor of GoldenEgg Investing, which offers free market commentary and simple, low-cost, low-risk retirement investing plans.

China Steers Toward a Subprime Economy

JUL 6, 2015

By William Pesek

Everyone knows the Chinese government is desperate to keep stocks from crashing. But this desperate?

The regulatory tweaks aimed at supporting equities included this shocker: Homes are now acceptable collateral for borrowing to buy more stocks. Perhaps the least of the too-many-to-list problems with this idea is that property is difficult to liquidate when assets crash. The biggest is that China is sowing the seeds of a third financial time bomb to match its debt and stock bubbles.

China's Debt Bomb

Ginning up shares with central bank liquidity and regulatory inducements, as China has already done, is a slippery slope. Tying the future of the nation's housing sector to today's stock mania is lunacy. Why bother letting banks churn out subprime debt instruments, as Wall Street did in the 2000s, when you can turn your whole economy into one?

Memo to President Xi Jinping: Suppose some of the $4 trillion worth of debt amassed by local governments in recent years were to go sour (many already have, but you don't do transparency). And suppose that volatility in interest rates spills over into Shanghai and Shenzhen shares (hardly a reach). That would smack one bubble into another, bursting both and triggering a third shakeout in the one Chinese asset market -- home ownership -- that's not supposed to be a giant casino.

The good news is that many securities companies may resist betting the house on the market, or at least as much as they can in top-down Communist China. Why welcome such a risk-management nightmare in a nation that already has too many ghost cities? The wording of China's new rules -- and its list of "other assets" that can be used as collateral -- will force brokers to become experts in valuing everything from property, to antiques, to art.

The bad news is that the authorities in Beijing clearly are betting everything on a stock rally that's hasn't come: Stocks just sustained their biggest three-week loss in more than two decades. That's despite moves last week to loosen margin lending, cut interest rates, reduce reserve requirements, direct the state-run media to churn out don't-panic articles, you name it. Over the weekend, the government even suspended initial public offerings and set up a market stabilization fund.

Margin traders, who increased their leveraged investments nine-fold in the last two years, to about $322 billion from $35.7 billion, have been rushing to close those positions for a record nine consecutive days. And the Shanghai Composite Index's plunge below the symbolic 4,000 level signals even more selling. Further, a slide in iron-ore prices last week suggests that Chinese demand is slowing more sharply than the government is letting on.

All of this indicates that the government's recent stimulus efforts aren't working. At a time when Xi's team should be strengthening China's financial system, they're just making it more fragile. What's needed are decisive steps to shore up domestic demand, not more market froth.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

Wednesday, July 8, 2015

The Good Jobs Strategy

JULY 7, 2015

Joe Nocera

At the Aspen Ideas Festival — an annual summer gabfest that presents all sorts of interesting ideas, from the improbable to the important — one of the big themes this year was jobs. How will America close the skills gap? Where will the good middle-class jobs of the future come from? I heard pleas for infrastructure spending as a job strategy, and creating jobs by unleashing our energy resources. There were speakers who believed that innovation would bring good jobs, and speakers who feared that some of those innovations — in robotics, for instance — would destroy good jobs.

And then there was Zeynep Ton.

China stock market plunge: Why did it happen and what's next?

JUL 7, 2015,

SHANGHAI (AFP) - China stocks resumed falling on Tuesday (July 7) despite the government unveiling an unprecedented package of measures to boost the flagging market after a spectacular bull-run reversed course in June.


China's stock market surge started in late 2014 despite the country's gross domestic product (GDP) experiencing its slowest growth in 24 years.

The borrowing-fuelled rally began after China's central bank cut interest rates on November 21 for the first time in more than two years, and the launch of a scheme linking trading between the Shanghai stock exchange and Hong Kong bourse.

The rally continued in 2015 with the benchmark Shanghai index climbing to the symbolic 5,000-point level in early June, driven higher by margin trading, through which investors only need to deposit a small proportion of the value of their trades, generating bigger profits - but also bigger losses.

When it peaked on June 12 it had risen more than 150 per cent over the previous 12 months.

Total Defence remains a total effort

8 July 2015

It is not coincidental that both Singapore and the Singapore Armed Forces are celebrating their golden jubilees this year. The symbiosis of national and military survival binds them together inextricably. Without Independence, the SAF would have been unnecessary; without the SAF, that independence would have been ephemeral perhaps. For 50 years now, the SAF has underpinned a city-state's quest to prove that size is not destiny. Indeed, their common mission resonates with a stubborn refusal to heed the ancient dictum that the strong will do what they will, and the weak must accept what they must.

Tuesday, July 7, 2015

Chinese Investors Who Borrowed Are Hit Hard by Market Turn


JULY 6, 2015

SHANGHAI — With his stock market riches, Gong Yifeng bought a riverfront apartment here for his son and daughter-in-law. He can eat well and travel abroad. He can also afford to pay for his granddaughter’s education.

But the losses are rapidly piling up for Mr. Gong, a retired shipyard worker. With China’s stock market 30 percent off its highs, his portfolio is down more than $30,000 in the last few weeks.

“I don’t need a high-flying market, just a stable one,” Mr. Gong said.

Millions of ordinary investors like Mr. Gong, who piled into an ever-soaring Chinese stock market over the last year, are bracing for a roller-coaster ride.

With stock prices plummeting, the government announced plans over the weekend to help prop up the market. While big state-owned companies fared relatively well on Monday, smaller companies continued to slide. The fallout also spread to the Hong Kong markets.

The situation is putting ordinary investors, many of whom invested in smaller stocks, in a difficult place. This latest slump may be just another periodic price dip. Or it could be the beginning of a lengthy downturn, like the one that started in late 2007, when the market eventually fell about 70 percent.

For now, Mr. Gong, 65, is sticking with stocks.

Monday, July 6, 2015

For the Greeks, there is nothing worth celebrating

5 Jul 2015

Jonathan Eyal
Europe Correspondent

With most of the ballots in their referendum now counted, it is clear that the people of Greece have rejected the terms of an international financial bailout, potentially putting the debt-crippled country on course to leave the Euro single currency zone and plunging the rest of Europe into one of its biggest political crisis in decades.

The 61 percent share of the votes secured by the "No" campaign has confounded opinion pollsters who predicted a much closer referendum result, and represents a significant personal victory for Prime Minister Alexis Tsipras, who called on his people not to accept the higher taxes and pension cuts demanded by Greece's creditors, which include the European Union and the International Monetary Fund.

The people of Greece also seemed to have accepted their prime minister's reassurance that the snub which they have now delivered to the rest of Europe won't result in the country's ejection from the continent's financial institutions, but merely provide Greece with a better bargaining chip and the chances of a better deal which will provide Greece with extra credits, while imposing no further economic hardships.

The Next Safety Net

Social Policy for a Digital Age

By Nicolas Colin and Bruno Palier

As advanced economies become more automated and digitized, almost all workers will be affected, but some more than others. Those who have what the economists Maarten Goos and Alan Manning call “lovely jobs” will do fine, creating and managing robots and various digital applications and adding lots of value in service sectors such as finance. Those who have what Goos and Manning call “lousy jobs,” however—in sectors such as manufacturing, retail, delivery, or routine office work—will fare less well, facing low pay, short contracts, precarious employment, and outright job loss. Economic inequality across society as a whole is likely to grow, along with demands for increased state expenditures on social services of various kinds—just as the resources to cover such expenditures are dropping because of lower tax contributions from a smaller work force.

These trends will create a crisis for modern welfare states, the finances of which will increasingly become unsustainable. But making the situation even worse will be the changing nature of employment. Twentieth-century social insurance systems were set up to address the risks met by people who worked in mass industrialized economies—ones in which there were generally plenty of jobs available for all kinds of workers. The basic assumption behind them was that almost all adults would be steadily employed, earning wages and paying taxes, and the government would step in to help take care of the unemployable—the young, the old, the sick and disabled, and so forth. Social insurance—provided by the state in Europe and by the market in the United States—was aimed at guaranteeing income security for those with stable jobs.

[CPF will be threatened mainly by the lack of steady income to save for a retirement. If retirement adequacy is an issue today, it will be more so tomorrow. And if housing affordability is an issue today, it will be more so tomorrow when there is insufficient contribution to the OA to fund home purchase.]

In twenty-first-century digital economies, however, employment is becoming less routine, less steady, and generally less well remunerated. Social policy will therefore have to cover the needs of not just those outside the labor market but even many inside it. Just as technological development is restructuring the economy, in other words, so the welfare state will need to be restructured as well, to adapt itself to the conditions of the day.

Can China beat deflation?

By Yu Yongding -

July 3

At a time of slowing economic growth and massive corporate debts, a deflationary spiral would be China’s worst nightmare. And the risk is mounting. The producer price index (PPI) has been in negative territory for 39 consecutive months, since February 2012. The growth of China’s consumer price index (CPI), although still positive, has also been falling steadily, from 6.5 per cent in July 2011 to 1.2 per cent in May. And if past experience is any indication, China’s CPI will turn negative very soon.

In China’s previous protracted bout of deflation, from 1998 to 2002, persistent declines in prices were the result of monetary and fiscal tightening that began in 1993, compounded by the lack of exit mechanisms for failed enterprises. After peaking at 24 per cent in 1994, inflation began to decline in 1995. But gross domestic product growth soon began deteriorating rapidly. In an effort to revive growth in a difficult global environment and buffer exports against the impact of the Asian financial crisis, the Chinese government loosened monetary and fiscal policy beginning in November 1997.

But it was too little too late. By 1998, when CPI inflation began to fall, producer prices had already been declining for eight months, and remained negative for a total of 51 months, with CPI growth beginning to recover after 39 months.

China rolls out emergency measures to prevent stock market crash

July 5

BEIJING/SHANGHAI - China's stock markets face a make-or-break week after officials rolled out an unprecedented series of steps at the weekend to prevent a full-blown stock market crash that would threaten the world's second-largest economy.

The government is anxiously awaiting the market opening on Monday to see if the new measures will halt a 30 percent plunge in the last three weeks, or if panicky investors who borrowed heavily to speculate on stocks will continue to sell.

In an extraordinary weekend of policy moves, brokerages and fund managers vowed to buy massive amounts of stocks, helped by China's state-backed margin finance company which in turn would be aided by a direct line of liquidity from the central bank.

China has also orchestrated a halt to new share issues, with dozens of firms scrapping their IPO plans in separate but similarly worded statements over the weekend, in a tactic authorities have used before to support markets.

"After the 28 companies suspended their IPOs, there will be no new IPOs in the near term," the China Securities Regulatory Commission (CSRC) said in a statement on Sunday night.

An online survey by fund distributor over the weekend, which polled over 100,000 individuals, said investors believed stock indexes would rise more than 5 percent on Monday. But many of those polled didn't think the bounce will last long.

"You're going to need the central bank to open the floodgates to take us back to 4,500 points in Shanghai," said an investment manager in Shanghai.

Facing the waves

Low-lying Maldives adapts to constantly changing environment

Jul 5, 2015, 6:00 am SGT

Nirmal Ghosh
Indochina Bureau Chief

"It's like the islands dance," a young official of the Maldives' Ministry of Environment and Energy told me in an interview.

In Male, the densely built-up capital where there are no stray dogs and cats, garbage has to be taken away by boat, and electricity is fueled by imported diesel - and if the desalination plant fails, the city of more than 100,000 runs out of drinking water in less than a week.

Satellite photographs going back a few decades have shown that the Indian Ocean islands of the Maldives - clinging to a string of mountain tops barely protruding from the surface - are shape shifters.

Products of coral, and coexisting with the surging sea, they change shape seasonally, and over the years.

Sinking isles

Friday, July 3, 2015

COE cycles of boom and bust

3 July 2015

Christopher Tan
Senior Transport Correspondent

Since its inception in 1990, the vehicle quota system has followed a 10-year peak-and-trough cycle, where the annual supply of certificates of entitlement (COEs) could vary from 20,000 to 100,000.

Even if this fluctuation does not impair the effectiveness of the COE system in controlling Singapore's vehicle population, it is highly disruptive. For consumers, the price swings cause discontent, and trigger wasteful outcomes such as cars barely three years old being scrapped.

This is because when COE supply is on an upswing, the price of a new car could fall below the residual value of one bought two years earlier.

Singaporeans have misplaced sense of entitlement, says SICC head Victor Mills

From "overfussiness" and complacency to an inability to accept criticism, many things about Singaporeans' attitudes to work irk Mr Victor Mills. The Northern Ireland-born Singapore citizen, 55, who took over as chief executive of the Singapore International Chamber of Commerce (SICC) last June, speaks his mind to Walter Sim.

JAN 26, 2015,

A moonshot to save a warming planet

By Martin Wolf

July 2

Every silver lining has a cloud. The technologies that offer human beings comforts and opportunities that would have been unimaginable two centuries ago ultimately depend on an abundance of energy. Fire is the source of that energy. But the burning of fossil fuels, from which we gain so much, also releases the carbon dioxide that threatens to destabilise the climate.

For some, the answer to this challenge is to embrace poverty. But humanity will not — and should not be expected to — give up the prosperity that some already enjoy and others greatly desire. The answer lies instead in breaking the links between prosperity and fossil fuels, fossil fuels and emissions, and emissions and the climate. We must not reject technology, but transform it.

Wednesday, July 1, 2015

Is there an ideological cleavage in S’pore?

[Note the date of this article. It is from over a year ago.]


Singaporeans still support free trade and investment, meritocracy and free enterprise, but want to see a greater emphasis on fairness in society

FOR a very long time, Singaporeans appear to have had a shared belief in the following values and principles:
  • Free trade and investment
  • Market economy
  • Globalisation
  • Foreign talent
  • Meritocracy
Several recent events, however, have prompted thoughtful Singaporeans to wonder whether that consensus is breaking down.

Speaking in London on Thursday, Prime Minister Lee Hsien Loong hinted at the problem.

Unlike many other global cities, he noted, Singapore has no hinterland. This made getting the balance "between national identity and cosmopolitan openness, between free market competition and social solidarity" especially important.

Are the stresses and strains associated with the drive to be a global city producing a potentially destabilising ideological cleavage?

PM sets out challenges Singapore could face in next 50 years


In his Ho Rih Hwa Lecture Series speech yesterday, Prime Minister Lee Hsien Loong set out the challenges he expected Singapore to face over the next 50 years at various points, namely growing the economy, an ageing population and strengthening the national identity.

Survival of Singapore still dependent on NS

As the country looks to the next 50 years, Singaporeans must not allow popular or short-term benefits to undermine the fabric of the NS system. NS must prevail and remain credible. Photo: Tristan Loh


JULY 1, 2015

The Singapore Armed Forces (SAF) has started to commemorate “SAF50” — in conjunction with SG50, the Republic’s golden jubilee on Aug 9 — with a major SAF Day Parade, to be held today. While this is a time to rejoice, it is also timely to reflect on the role of National Service (NS). This is especially so, given the calls by some Singaporeans on social media and Internet forums for NS to be shortened or done away with, so that the SAF becomes an all-regular force. Others argue that enlistees ought to be given a choice on what they want to do while serving NS.

I wonder if 50 years of peace have lured some Singaporeans into complacency. Have we forgotten the constant threats that we face? Years back, it was the possibility that our water supply could be cut off. Today, it is the aim of militant groups to create an Islamic Caliphate in the entire South-east Asian archipelago.

I hope my three grandsons, now aged between three and 13, will serve NS in its current form, and that NS will at least continue for the next 50 years. Why?

SMU Dialogue with PM Lee

TPP pact among global issues raised at SMU dialogue


JULY 1, 2015

SINGAPORE — Questions on developments around the world dominated a dialogue Prime Minister Lee Hsien Loong had with students yesterday, even though his speech was largely centred on the country’s domestic challenges in the years ahead.

Over an hour, seven of the 12 questions raised by members of the 3,500-strong audience at the Ho Rih Hwa lecture organised by the Singapore Management University (SMU) were on external issues. These ranged from the Trans-Pacific Partnership trade agreement (TPP) to territorial disputes in the South China Sea and the United States Supreme Court’s ruling on Friday to legalise same-sex marriage in the country.

An SMU final-year economics student asked Mr Lee whether a political or judicial solution would better address a “thorny issue” such as same-sex marriage.

Singapore feeling impact of rapidly ageing population

July 1, 2015

Kelly Ng

SINGAPORE — Stressing how demographics would define the country’s destiny, Prime Minister Lee Hsien Loong said yesterday that the ageing population would cause profound problems for the country and that the impact is already being felt today.