Just to pause the Temasek and GIC bashing for a short while...

I am quite surprised that everybody just focused on the fact that Temasek is investing another $3.4 billion into ML but not remember the fact that Temasek has been compensated $2.5 billion by ML due to an anti-dilutive clause.

Anyway, Temasek had little choice but to pump in $900 mil more into the company. The story is simple, as long as ML doesn't go bankrupt or gets taken over there's a very high chance (~90%) that the trade will breakeven or make profits no matter how low ML stock drops due to this clause. That's why Temasek is throwing in more money to save the sinking ship, coz if they don't and ML goes down. Temasek management will definitely have to face a lot of issues on accountability.

At this stage, by not pumping in more money and staving off ML's bankruptcy, that would be the worst decision Temasek would probably have made! What's the chance of a big US bank like ML failing? The risk/reward ratio probably justifies the liquidity injection and I agree with the decision.

However, to rush head in during the midst of the credit crunch and invest 10-20% of the whole fund in the financial sector, though armored with protective clauses may still be a tad aggressive for a sovereign fund answerable to the people.

But to give Temasek or GIC some credit, they had the option of injecting liqudity into Bear Sterns, Citigroup, ML and UBS during the height of the credit crunch. And intelligently they didn't choose Bear Sterns which of course got bought over a couple of months later.

Ok guys, you all can continue bashing Temasek and GIC now =)

Below are the details:-

July 29 (Bloomberg) -- Temasek Holdings Pte., the biggest shareholder of Merrill Lynch & Co., agreed to invest a further $900 million in the securities firm after getting compensated for its initial investment in December.

The Singapore state-owned investment company will use a $2.5 billion so-called reset payment for losses from its earlier purchase toward buying $3.4 billion of Merrill stock, it said in a statement today. Merrill said it will book the reset as an expense, as well as $5.7 billion of additional writedowns.

``It looks like a good deal for Temasek,'' Teng Ngiek Lian, who manages $2.6 billion as chief executive officer of Target Asset Management in Singapore, said today. ``It's quite cleverly structured to protect their interest from future dilution and lower price placement.''

Merrill's shares have fallen 55 percent since Dec. 24, when it announced that Temasek, which manages more than $100 billion, would invest as much as $5 billion in the third-biggest U.S. securities firm. The sale would push Temasek's stake beyond the 10 percent limit for foreign investors, and the Singapore company said a portion of its new stock requires regulatory approval.

Merrill was contractually bound to compensate Temasek and the other investors who bought shares in offerings in December and January. ``You must have some reward for the risk they are taking,'' Teng said. ``That deal was done under exceptional circumstances. It was a scary time.''

Shoring Up Capital

Merrill Chief Executive Officer John Thain is pushing to shore up capital as banks including Citigroup Inc. were forced to sell assets and seek new investors amid a global credit contraction that triggered more than $468 billion in writedowns and losses.

Other than Temasek, Government of Singapore Investment Corp., which manages more than $100 billion of the country's reserves, has invested about $18 billion in UBS AG and Citigroup following writedowns by the two banks.

Thain, 53, is trying to stave off credit-ratings downgrades and demonstrate to regulators that the firm can withstand losses. Standard & Poor's on June 2 cut Merrill's rating to A from A+ and assigned a ``negative'' outlook, indicating additional downgrades were possible.

Korea Investment Corp., a Seoul-based fund that manages part of the country's foreign-exchange reserves overseas, also said today that it converted $2 billion of preferred shares in Merrill bought in January into common stock at half the price it had initially agreed to.

Merrill on July 17 reported a second-quarter net loss of $4.65 billion, or $4.97 a share, on $9.7 billion of credit- market writedowns that totaled about $46 billion before today.

Thain cut about 4,200 jobs in the first half of the year and is selling assets to replenish the firm's capital. Merrill completed the $4.43 billion sale of its stake in Bloomberg LP this month and said it signed a letter of intent to sell a controlling interest in Financial Data Services Inc., a mutual- fund administrator valued at $3.5 billion, to an undisclosed buyer.

Invest.. of course must invest big and take risks ah. With 20 billion.. you can make 200 billion, the most you lose is only 20 billion or so. Anyway Singaporeans will never see the money, know how much there is or what's it used for..  So why you guys worry so much?

To me, if I am GIC chairman.. I will invest more than 20 billion! More like 50-60 billion.. if I am right and I make 100-200 billions, I and GIC becomes hero of Singapore. Lose already, nobody knows how much is lost anyway and I still get to keep my job and million dollar salary.

 

 

 

 

 

 

http://www.timesonline.co.uk/tol/news/world/africa/article3998942.ece

Mugabe visits Singapore for health treatment before he continues his presidential contest in Zimbawe. This is on Times Online. I doubt Straits Times will report such news since there's negative propaganda value in this.

After treating Burma's General Than Shwe and now Mugabe, it seems like Singapore is the place to go for these internationally infamous leaders. If they entrust their health with Singapore, I am sure they put billions of their ill-gotten gains in the Singapore banking system. This has ben speculated though there's no real evidence due to the banking secrecy acts in Singapore. I find it disconcerting that lives of genocidal leaders are extended through our medical system or their wealth is managed by our banks. I am sure it's good money for Singapore.

Though making money is the top priority for all Singaporeans, one really has to wonder whether there's a need to balance morals with wealth. Even if we do become the richest country in the world, I am not sure one should feel proud of it ...

So how about the population of Ireland? They stand at 4 million and have equivalent GDP to Singapore at best and yet contribute 5-6 times more than Singaporeans do? The Irish can't do maths or perhaps they understand the idea of generosity better?

Bigger population doesn't mean you can afford more.. I don't know where you learnt that logic from. If so, do have more kids in the future so you can afford more in life.

And even as a calculated move, donating $200k would put Singapore below other states (Malaysia, Thailand etc.. even Saudi Arabia donated USD$50 mil) in terms of bilateral relations. Which is not a good idea for a country that solely depends on internation trade for a living especially with China.

 

Singapore Govt donates $200k to China for Earthquake victims !! That's about 5 cents per citizen/resident, I am sure they collect more GST from us in a single purchase. So much generosity from one of the world's richest nations..especially since our stellar GDP growth was made possible by trade with China and 70% of our population share the same ethnicity.

Even Malaysia donated USD$1.5 million and Thailand $500k despite having poorer coffers. Is it right for Singapore, the richest SEA by a mile and biggest beneficiary of the China trade, to donate a sum that is equivalent to less than a month's pay of their Ministers? Even small countries like Ireland donated $1mil Euro (5-10x our sum!), despite having the same population as Singapore and with less connection to China.

The Govt can spend billions buying broken banks but would only offer a tickle of that amount to help. My Govt has embarrassed me as a Singaporean, might as well don't donate..Sometimes, it's good to be prudent with money but being too stingy just makes one look really stupid and uncaring.

This is probably in line with their nationwide no welfare stance. Hopefully one day when there's a disaster in Singapore, other nations will be more willing to help us than we were to help them! Good luck to us all!

I love being a Singaporean as I enjoy the following benefits.

1) Get free GST credits/dividend packages and $$ packages worth a few hundred a year without the need to pay higher GST taxes etc.

2) A passport that allows free travel everywhere

3) Freedom of speech

And I don't have the following downside of being a Singaporean

1) No need to do reservist, which will cause you your job.

2) Don't contribute to CPF, where the money is locked away from you forever.

3) Pay exhorbitant prices for homes that last for 99 years

 

The solution is simple. Be a Singaporean, but don't live in Singapore. You will fully appreciate the benefits of being a Singaporean.

 

 

Money is not the biggest factor in obtaining an overseas education. There are a lot of scholarships (non-govt, private ones), bursaries and loans that exists for deserving students. You just have to find one. If you don't have the ability to raise enough money for an overseas education, then it's probably not a good idea to have one. As you will probably get stuck with a huge debt that you will not be able to repay in the future. 

I know ppl who came from poor family backgrounds (i.e with families staying in 1-2 room HDB flats) and managed to go for undergraduate studies in US Ivy league schools for education without a govt scholarship or a full private scholarship. They get bursaries, apply for subsidised tuition with supplemented income from part time work during studies (20 hours a week).

So from personal examples, I think it's "affordable" for most people to go overseas university if they really wanted too. But the issue, is whether one will work themselves to the bone for such an education. That's when people say they can't afford an overseas education because they're not from a rich family etc etc.

 

 

 

 

 

Don't understand how rising wages is not the only way to counter a global inflationary problem. Singapore can't make costs lower because they don't produce food or oil. And the other way is to let the SG dollar appreciate.. but that is not sustainable in the long run.

Of course rising wages should theorectically be accompanied with similar increases in work productivity. But the Govt shouldn't expect people to work harder with similar wages, that is just exploitation.

And after the ministers have risen their wages by 25++% to an obscene 3-4 million, they have no moral right to demand the rest of the population to accept paltry wage rises. The ministers' high wages probably contributed 0.1% to 0.2% to the record high inflation rates this year. That's a job well done in excerbating the problem with zero hindsight.

To counter inflationary pressures? Let all the ministers take a 1 mil pay cut each.. that will bring inflation down a bit. Besides they don't need a new maserati or a district 10 condo every year.

 

 

 

If Japan a rich country experiences food shortage.. what are the prospects for Singapore?

With food/commodites prices rising each and every day i.e wheat rising 2-3 fold this year and oil prices rising 2-3 fold in 1-2 years. Unless your wages rises by 100% a year, there is no way anybody can survive the eventual high costs.And even if you have the money, there might be no sellers as the exporting countries need the resources themselves to quell foot riots.

The only way is to be self-sufficient in basic resources, which the Govt did do for water supplies (NewWater). But they probabaly need to use a reclaimed island to do some high tech agricultural food production to ensure a degree of self-sufficiency. 

Also increasing population in SG is definitely not helping the situation!! Let's see how the best Govt in the world (otherwise why are we paying them so much) will come up with a solution for this predicament.

Singapore is like a frog in a boiling pot at the moment... hopefully the heat is turned off soon.

Minimum wage should be set to McDonald's hourly rate or something. Even if you are a FT, McDonald's due to their CSR (Corporate Social Responsibility) initiatives, they will still pay their hourly flat rate of 4-5 dollars an hour.

 

- If you give people a Shit Sandwich, at least tell them why.. -