Temasek Bonds

Ok, I am not an economics expert but I do not feel comfortable about the following article:

Temasek to issue US$1.5b 10-year notes due in 2019 with 4.3% coupon (By Irene Chan, Channel NewsAsia | Posted: 20 October 2009 1307 hrs)

My first understanding of Bonds are those of public bonds. That is, Bonds are typically issued to raise money for public projects that require a high start-up cost. Or start a war. This article prompted me to find out that there are actually private bonds (makes sense). These tend to be used to finance a project for the same reasons, high start-up cost.

So, what bugs me about this Temasek offering (other that I am a raving anti-PAP government lunatic)?

Net proceeds from the offering will be provided to Temasek and its subsidiary companies to fund their ordinary course of business.

Temasek is an investment firm. We have already been told that its business is none of our business. So, as far as I can discern, it is taking this money raised to invest. Why does this feel wrong to me? It feels like a ponzi scheme ... "invest your money with me, so I can invest some more".

To be fair, given Temasek's record, it *should* be able to get returns on the money above the 4.3% it is offering to people buying this bond offer, so as a practical matter it seems sound. I guess I'm just more fiscally conservative ... I expect the raising of money from bonds to contribute to some clearly defined project, so investors in those bonds know exactly what they are getting themselves into. Right now, anyone buying these bonds will only know Temasek will invest it somewhere else ...

Why Low Thia Khiang was wrong. Now, nobody has any clue what LUP is about.

This is really for archival purposes only. The response by the Ministry of National Development to Mr. Low Thia Khiang's quip about LUP does not square with anything previously discussed within the public domain:

"Ministry: MP Low wrong on lift upgrading" (Straits Times Forum, Oct 13, 2009).

Once I find some time, I'll try to dig up all prior discussion on the topic to attempt to properly make sense of this. Right now, this letter seems to contradict everything that has been said before ... why we have town councils, why town councils are required to maintain reserves, what are CDCs for, the suggestion that Potong Pasir's S$4.5M sinking fund cannot handle LUP for a few blocks etc ...

Meanwhile, the contents of the article are found below.

I REFER to last Saturday's letter by Member of Parliament for Hougang Low Thia Khiang, 'No basis for MP not to announce lift upgrading'.

The joint letter last Friday by the Housing and Development Board (HDB) and the People's Association ('Why grassroots advisers announce lift upgrading') should be read in conjunction with Minister for National Development Mah Bow Tan's explanation to the media last Wednesday.

As Mr Mah highlighted, HDB's upgrading programmes are carried out and funded by the Government. This is no different from other government programmes such as the building of roads and schools.

These programmes have to be implemented through government channels. In the case of HDB upgrading, this channel is the advisers to grassroots organisations, who are appointed by the Government. Opposition MPs are not answerable to the Government, nor are they obliged to carry out and explain the Government's policies.

The Government pays up to 90 per cent of the cost of the Lift Upgrading Programme (LUP), with the rest shared between the residents (5 per cent) and the town councils (5 per cent). Funding for LUP is possible only because of the Government and the Budget surpluses it has generated through prudent policies.

Opposition MPs are not responsible for generating budget surpluses. There is therefore no basis for opposition MPs to lead the LUP - a national programme funded mainly by the Government. Mr Low is mistaken when he cites the 'will of the people' expressed in general elections to justify why he should play a leading role in the LUP in Hougang. The will of the people expressed in general elections is to elect a government for the country as a whole; and not to elect separate local governments for each constituency.

Singapore has a one-level system of government. MPs, whether People's Action Party or opposition, do not constitute a local government in their constituency.

However, MPs do have a role in running town councils. Their role in town management and maintenance is clearly defined in the Town Councils Act, and does not extend to implementing government programmes such as the LUP.

Lim Yuin Chien
Press Secretary to the
Minister for National Development

Mah Bow Tan needs to be slapped ...

... for making me waste time to blog yet another entry because of him :P.

That little good-for-nothing minister is hiding behind nice-looking statistics that tell us *absolutely nothing* about the state of affairs in HDB housing. Here is what he says (I'll even cite this from the PAP website rather than the news) - "Hard to get that first flat? Not so" : National Development Minister Mah Bow Tan sets records straight on claims by couples.

1) He quotes 3 different pieces of data from 3 different data points. This is what he tells us:

Data Point #1 (Oct 7 2009) - 80% first try applicants offered BTO flat. 96% second try applicants offered BTO flat.

Data Point #2 (2007) - 67% of first try applicants reject offer.

Data Point #3 (May 2008) - 52% of first try applicants reject offer.

What conclusions can you draw? Absolutely nothing, unless you make assumptions about the relevant pieces of data for each data point.

2) His conclusions from the skimpy data above require huge leaps of logic, typical of PAP claims that "if the percentage of the problem is small, then there is no problem". Let me do part of his homework for him (he, or someone else, will need to fill in the blanks):

For any given application period,
F = first try applicants.
S = second try applicants.
O = other applicants.
X = flats offered.
Y = flats taken.

Using just Oct 7 data:
X = 0.8F + 0.96S + pO where p = fraction of other applicants who are successful.

Assuming May 2008 data applies to Oct 7:
Y = 0.48x0.8F + aSx0.96F + aOxpO
where aS = acceptance fraction of 2nd try,
aO = acceptance fraction of others.

Flats remaining available for next cycle = X - Y (assuming the decision based on demand is to build).
Number of first tries with no flat at the end of this cycle = 0.2F + 0.52x0.8F = 0.616F.

To make his conclusion, one needs to know at least F and S. If the numbers are small, then maybe it really isn't a problem for the "innocent" rejectees. But if the numbers are large, then 0.2F could very well be a serious problem. Why? Because a fraction of 0.616F will go on to become the next round's S figure. Again, we have no clue what fraction that is.

How many people give up? What are the numbers for X, F, S, p, O, aS and aO for the application cycles over the last 5 years? What are the trends? Are the S and O figures growing, indicating flat supply is not keeping up with demand?
How many of the "bad" F (0.416F) applicants go on to reject their flats when they become the S figure on the next cycle?

Where the rejections are concerned, how many of F, S and O got their first-choice of flats? How many rejected the offer because they were offered their 3rd or worse choices they could pick? How many were offered choices they had not even opted for in the first place (as is typical with NUS undergrad applications)? I remember very unhappy friends who got shoved into NUS Comp Sci merely because it had showed up at the bottom of the list of choices for their study major. How many applicants were "picky"? How many were simply not offered any reasonable choice?

Come on, Mr Mah, I'm sure you and your staff can do a better job than that with statistical data! Show me the meat upon which we can have a far more meaningful discussion!

Singapore's Population

I was not planning to blog about anything until I complete my Phd thesis ... but this just stunned me ...

S'pore population hits 5m (By Melissa Pang, Straits Times, Sep 28, 2009).

Two (well, three) things struck me:

1. Households

The number of resident households has also gone up at the same rate - by 1.7 per cent to an estimated 1,093,100 in 2008.

That's around 18,000 households. So, I have so many questions now ... how the hell are we housing everyone if the HDB is constructing only 8,000 homes per year? Is there a large enough surplus of flats? Is there a large enough supply of private housing? Are families now being forced to rent rooms just to have a roof over their heads? The Americans over-extended by trying to have more people to own homes but are we headed the other direction by trying to have fewer people owning their own homes?

2. Percentage growth in population

The latest figures indicate a 3.1 per cent growth over the previous year, with the resident population registering a 2.5 per cent jump.

Ok ... is it me, or is our population growing at a similar or faster rate than our GDP growth? Naively, this should mean our per-capita GDP should be stagnant. Given a huge chunk of our GDP goes into company profits, does this mean we are going to continue to see wages frozen for the foreseeable future while costs go up?

3. The spin ... oh, the spin ...

Soon after I read the article and refreshed the page to acquire the reference links to blog about it, I came across what must be the most blatant spin-article to "reassure" Singaporeans nothing is wrong (in the most un-reassuring way):

Population rises, slowly (By Zakir Hussain, Political Correspondent, Straits Times, Sep 29, 2009)

Just look at the language used ... speculative or stuffed with weasel words ...

The others are permanent residents (PRs) and foreigners. In this foreign pool of 1.8 million, the number of PRs grew faster - by 12 per cent.

It shot up by 55,000 to 533,200, partly because of many foreigners rushing to be PRs to avoid having to pack up and leave Singapore should they lose their jobs during the downturn.

... sooo, you are telling us that our Immigration policies have become so liberal that a foreigner can suka suka become a PR by saying "because I don't want to leave if I lose my job during the downturn"? Come to think of it, that only makes sense if these people want a shot at another job in Singapore if they lose one. Otherwise, why would they even want to stay in expensive Singapore? I wonder how many foreigners actually feel this way ... did Zakir Hussain actually research this "fact" or did he conjure it out of nowhere?

In contrast, the number of foreigners - which includes family members of foreign workers - rose less sharply to 1.25 million.

This is a rise of 5 per cent, which is much smaller than last year's 19 per cent increase amid a booming economy.

More than half of these foreigners are transient workers, many of whom do jobs or take shifts that locals avoid.

To be fair, I am reading what might be a non-existent sub-text with a classic spin ... "not as bad as last year's terrible numbers = 'please be grateful, you sorry peons'". Seriously though, I'm a little pissed-off by the last sentence. It reads to me rather like "many of whom are sitting around unpaid for non-existent jobs because the economy is so damn bad".

Finally, this takes the cake:

The bigger foreign pool is cause for cheer, said National University of Singapore sociologist Paulin Straughan.

'That we managed to grow the population in spite of a downturn and sustained low fertility rate is quite an achievement.

'This means Singapore remains an attractive destination for those seeking work,' said Associate Professor Straughan, who is also a Nominated MP.

Yay. I'm so very happy we can have more people to suffer through a downturn and have all those extra people to soak up all the jobs that become available when the economy recovers.

Being a foreign graduate student in the US who might seek a job here, I'm normally very supportive of foreign workers in Singapore complementing our workforce. However, all I can see in the future given how the government and employers in Singapore behave is that the majority of new jobs created when the Singapore economy recovers will go to this huge extra surplus of foreign workers because, let's face it, they are way cheaper than Singaporeans. At the very best, wages will remain depressed for a long time to come. Of course, that's what the establishment wants ...

Thoughts on Democracy by D.W. Eisenhower. Something to think about.

It is a link to a reply by President Dwight D. Eisenhower in response to comments from a dying war veteran. I found the link on an article linked by a reader on the Singaporean Mind blog article (MM Lee : PAP in power for 10 more years!) and found it very apt in some aspects in the context of the Singapore political scene. To think Eisenhower was a Republican! :P

http://www.eisenhowermemorial.org/presidential-papers/second-term/documents/1051.cfm

Good report/advisory, bad journalism (imho) and a messed-up consumer policy

Yes, the shameless ungrateful young blogger is back! This time, the following CNA article/advisory caught my attention:

Excessive methanol detected in two Chinese wine products (By Imelda Saad, Channel NewsAsia | Posted: 26 August 2009 2051 hrs).

Summary: Two Chinese wine products (detailed in article) has "excessive" methanol and is being "recalled" by Singapore's Agri-Food and Veterinary Authority (AVA). Symptoms of "excessive" methanol intake described. Consumers warned.

Perfectly good advisory.

Here comes the details and my beef with what ought to have been a news report:

AVA said on Wednesday excessive intake of methanol may cause visual disturbances, nausea, abdominal and muscle pain, dizziness, seizures and coma.

As a precautionary measure, AVA has also instructed the manufacturer to suspend production and recall all its Chinese wine products. Retailers have also been instructed to remove all the products.

Consumers who have bought any of the affected wines are advised to discard them.

First of all, the questions:

1. What is methanol and how is it related to alcohol people drink?

Well, I had to do some digging and this is what I found out -

From:
http://en.wikipedia.org/wiki/Methanol

... It is the simplest alcohol, and is a light, volatile, colourless, flammable, toxic liquid with a distinctive odor that is very similar to but slightly sweeter than ethanol (drinking alcohol) ...

... Methanol is produced naturally in the anaerobic metabolism of many varieties of bacteria, and is ubiquitous in the environment. As a result, there is a small fraction of methanol vapor in the atmosphere. ...

... Because of its toxic properties, methanol is frequently used as a denaturant additive for ethanol manufactured for industrial uses — this addition of methanol economically exempts industrial ethanol from the rather significant 'liquor' taxes that would otherwise be levied as it is the essence of all potable alcoholic beverages. ...

... Because of its similarities to ethanol (the alcohol in beverages), it is difficult to differentiate between the two (such is the case with denatured alcohol). ...

which did not quite cover everything I wanted to know (like "what the hell is this toxic substance doing in excessive amounts in a product meant to be consumed by humans?", so I dug even further:

http://en.wikipedia.org/wiki/Denatured_alcohol

and finally an abstract from a 2001 paper on the (US) National Institute of Health "Defining a tolerable concentration of methanol in alcoholic drinks." which says:

Methanol, a potent toxicant in humans, occurs naturally at a low level in most alcoholic beverages without causing harm. However, illicit drinks made from "industrial methylated spirits" [5% (v/v) methanol:95% (v/v) ethanol] can cause severe and even fatal illness. Since documentation of a no-adverse-effect level for methanol is nonexistent in the literature a key question, from the public health perspective, is what is the maximum concentration of methanol in an alcoholic drink that an adult human could consume without risking toxicity due to its methanol content? Published information about methanol-intoxicated patients is reviewed and combined with findings in studies in volunteers given small doses of methanol, as well as occupational exposure limits (OELs), to indicate a tolerable ("safe") daily dose of methanol in an adult as 2 g and a toxic dose as 8 g. The simultaneous ingestion of ethanol has no appreciable effect on the proposed "safe" and "toxic" doses when considering exposure over several hours. Thus, assuming that an adult consumes 4 x 25-ml standard measures of a drink containing 40% alcohol by volume over a period of 2 h, the maximum tolerable concentration (MTC) of methanol in such a drink would be 2% (v/v) by volume. However, this value only allows a safety factor of 4 to cover variation in the volume consumed and for the effects of malnutrition (i.e., folate deficiency), ill health and other personal factors (i.e., ethnicity). In contrast, the current EU general limit for naturally occurring methanol of 10 g methanol/l ethanol [which equates to 0.4% (v/v) methanol at 40% alcohol] provides a greater margin of safety.

Which answers the next question, but begs the question - "Just how excessive were the levels of methanol detected in the wines? Could industrial foul play be involved as evidenced in the milk case?"

2. What is an excessive amount of methanol for humans?

Answered by the abstract above, but wikipedia has another answer (which one would have to find out if the answers are consistent):

Methanol is toxic. If ingested, as little as 10ml can cause permanent blindness by destruction of the optic nerve.[4] The usual fatal dose is 100–125 ml (4 fl oz). Toxic effects take hours to start and effective antidotes can often prevent permanent damage.

Surprisingly, ethanol (found in alcoholic drinks) is administered as a way to mitigate the toxic effects of methanol consumption as described in the general article on Alcohol.

http://en.wikipedia.org/wiki/Alcohol

An effective treatment to prevent formaldehyde toxicity after methanol ingestion is to administer ethanol. Alcohol dehydrogenase has a higher affinity for ethanol, thus preventing methanol from binding and acting as a substrate. Any remaining methanol will then have time to be excreted through the kidneys. Remaining formaldehyde will be converted to formic acid and excreted.[6][7]

Perhaps my standards are too high, but those felt like pertinent questions to be answered with some level of detail in (what I deem to be) a proper piece of journalism ... e.g. "Methanol, when consumed, is toxic beyond 10 ml but occurs naturally in alcoholic beverages at X%, AVA found Y% which while not highly dangerous (??) is a cause for concern."

Finally, my ungrateful rant - "advised to throw it away"??!! You mean you are not going to act as a facilitator to get the companies to give me a refund for dangerous crap they just sold me? Am I going to have to privately sue them for any medical fees I incur if I fall sick drinking their wines? What is a consumer to do to get any justice from this?

Marital Rape - Singapore worse than Afghanistan?

This article on the BBC piqued my interest, particularly with recent activism against Marital Rape on behalf of women in Singapore: "Row over Afghan wife-starving law" (By Sarah Rainsford Page last updated at 15:28 GMT, Sunday, 16 August 2009 16:28 UK)

An Afghan bill allowing a husband to starve his wife if she refuses to have sex has been published in the official gazette and become law.

The original version obliged Shia women to have sex with their husbands every four days at a minimum, and it effectively condoned rape by removing the need for consent to sex within marriage.

Wait a minute ... Wha??!! The Afghans fought off something that is currently *permitted* by Singapore law?

It is funny how something that is regressive but actively pursued (in Afghanistan) gets so much media attention and yet, something that is regressive but "status quo" (in Singapore) gets nary a mention.


EDIT: As a reader pointed out, I had failed to roundly condemn the new Afghan law. Indeed I do. Starving your wife for refusing to have sex with you is simply barbaric. There is no other way of putting it. I do, however, want to point out that my original focus had been on how the Afghans previously had no immunity clause for husbands which came as a surprise to me, given that Singapore does!

To the opponents of any changes to Singapore Law: Husbands denied sex by their wives have legal options outside of raping them - go to a prostitute (don't be cheap!), go masturbate, seek a divorce. It is hypocritical to say "Government should not interfere in peoples' personal sexual lives" when the Singapore government selectively does so (against gay people and against guys who masturbate with their windows open).

An anti-marital rape law does not even have to be harsh initially - barring aggravated assault, send the man in for counseling for a first offense. I could accept that. As long as men in Singapore know it is wrong and illegal to abuse their wives this way.

On the flip side, something to think about now ... how do we deal with situations where the wife rapes the husband?