The First Rule of Business

is to stay in business. Cash flow is just the commonest means to remain so. Be open and flexible to all options. Always in the market there is a short term fool willing to act in ways that make doing the business difficult and unprofitable. In such times, you cannot do well, but you must figure a way to survive. Hogging the media now, I wouldn't be surprised if BP which was out competing many of its peers crash and burn as a result.

If governments play it fair, which they aren't likely to, Goldman Sachs, Citi, Morgan Stanley etc., should also have short lives.

If the government is your enemy, you cannot win. It is better to look for some other business to do.

Thats it. It is the Idols

Ever wonder why you just can't persuade some people on certain things. Likewise they have the same problems trying to win you to their point of view. 99% of the time, it is the idols in our lives. They are the lenses we use to see the world. I was somewhat amused and disturbed as I imagine the terrible time pastors will have persuading their congregations.

There are business and political applications from the insights here. Stroke your audience "gods" and you will have your sale or vote.

Read the book if you want to understand this better. It is also available in our libraries, which is where I got my copy.

The Singapore Dream

There is the American Dream. Is there a Singapore Dream? Not there is, but there was. Too afraid to articulate it now because the future has become too uncertain, which is just simply a more positive spin to we no longer are able to look over the horizon like Dr. Goh was able. Government leaders speak of a brighter future not necessary for the people but for the country. Meanwhile the ideology here that community before the individual makes it convenient for the community, which I suspect is getting smaller in size to push ahead leaving behind many because we cannot slow down for them. Why? Because time and tide waits for no man.

Our leaders might still be good but they are also less able than those before. The trend is not encouraging. Families and individuals have to help themselves better. The government is getting less reliable. They expend the greater of their effort on Businesses, especially the MNCs with the naive belief that wealth created would trickle down. We are not many years far away to learn that is a false premise to run the economy.

A nation with a tired paradigm but unsure what to replace it with.

'Okay' for churches to go into business

What do you expect them to do? Pray? They have prayed more or less and they are convinced the way to go once they get to a certain size is to professionalize and if necessary go into business to satisfy their need for space and growth.

Between money and faith, the former usually wins. Afterward it becomes indistinguishable if it was money or faith.

Can't be helped. People are first and foremost human then Christians. If you still do not follow, i.e., unless they don't have a chance to be human, they will be Christian. In an affluent society like ours you have no lack of opportunities to be human. Once you have seized every opportunity, there is no time left to be Christian. So why pray for deliverance when you have top legal eagle Michael Hwang to act for you? Ok, may be to Mr. Hwang they also add prayer. I don't know.

Flooding more frequently

I thought it was quite an achievement as I listened to the recorded presentation on flood control at the Marina Barrage a few months ago. Forward a few months, it appeared the boast was quite empty.

The system assumes that the drains, canals and water ways would not be clogged. The PUB is in charge of the system but the NEA, a separate agency takes care of keeping our environment clean. I suppose the two do not coordinate their work.

When it floods, the PUB get the brickbats. The NEA has so far succeeded at staying invisible. The PM doesn't seem to address the issue directly. Might as well he had remained silent.

A last big flood at Bukit Timah, the Environment and Water Resources Minister spoke. This time Mr. Yaccob Ibrahim was very quiet.

One Iranian born shop keeper has $300K worth of Persian carpets ruined when flood waters entered his shop in Changi. He complained abut the useless canal at the back of the shop. I supposed he must have had so much confidence in the authorities, he didn't feel the need to purchase insurance.

In the new Singapore, we better learn to rely on ourselves a lot more than our parents lean on the government. Those who have understood Lee Hsien Loong's message of "safe to fail" a few years ago at the annual National Rally Speech are better off.

US: Double Dip?

It is getting less ambiguous: A Double Dip for the US economy. Across the Atlantic, the picture does not look pretty at all given that the Germans do not want to play ball. For now investors chose to ignore the dark clouds gathering. There has been talk of quantitative easing but I don't understand. Wouldn't this just add to a pool of trapped liquidity? What is needed is either biting the bullet (forget it) or more fiscal stimulus. Question is where is the money going to come from? I shall be watching for more wisdom on this.

Amazon.com delivers our order

We ordered a few books from Amazon.com in early May. Up till the 25th, we have not gotten delivery. Estimated time of arrival was the 16th. Two days ago we contacted customer service. The next day they responded and just now, the box of books arrived. Nice, but why it has taken so long?

Responding to my question, the delivery person told me Amazon.com has facilities in Changi South. I had thought Sing Post would make the delivery. I think our national post office has gradually been squeezed out of business.

Why all Science books? Well because they are either too overpriced or not available here. Just science books, the kids wouldn't read. It must be interesting and persuasive. That is why it is so hard to find the right books. I remember we used to own every titles of the Magic School Bus series when they were younger. 

Families 'worth the investment'

From the Sunday Times today, Families 'worth the investment'

And while most also favoured having their aged parents live with them, only just over half would themselves move in with their children when they got old.

But those who were aged close to or above 60 were more likely to prefer to stay on their own, said National University of Singapore sociologist Angelique Chan, who led the survey team.

She explained: 'Perhaps they don't want to be a burden and realise their adult children have their own children to take care of. They also want to age in-place, which we see in other older populations.'

I think the more important reason isn't the one pointed out by sociologist Angelique Chan. With the benefit of experience, the older folks realized that it is better to keep some distance and maintain a good relationship than try to get too close and end up with friction. Less is more.

Ours is a society where young people find their life partners on their own. No match-making here. When marriages are arranged by family elders, they will choose holistically for compatible families. Leave the young to themselves, they will mostly find someone that is compatible with themselves with little regard for the inter-personal dynamics of in-laws. Try to bring two very different families together, you must be really trying your luck here that they will get along famously. To be realistic, in-laws will keep a respectful distance from each other. Among the Chinese, the social intercourse between such families will be guided by Confucian decorum. Unfortunately this is often unsuccessful because many family aren't even unsure what is proper in the Confucian way.

MM Lee shows courage on the learning of CL

Unlike the PM and his Education Minister, the MM has guts.

In his first comments on the controversial issue of reducing the weighting of mother tongue in the Primary School Leaving Examination (PSLE), Minister Mentor Lee Kuan Yew said that Singaporeans must 'face the reality' that the English and Chinese languages do not have equal status in Singapore society.

'Many citizens objected when the Education Minister wanted to reduce the weighting,' he said, in Mandarin, during a dialogue at the joint conference of Confucius Institutes in Asia yesterday.

'But they don't understand. At the moment, the languages are already unequal. On paper they may count for the same, but in reality they do not.'

Respond to the facts, live with the reality or face the consequences.

MM Lee's remarks yesterday were in response to a question from Associate Professor Lai Ah Keow, an adviser to the Confucius Institute in Singapore, based at the Nanyang Technological University. A strong believer in bilingualism and even trilingualism, he lamented that parents in Singapore put too much emphasis on their children improving their English, at the expense of other languages.

Good luck to Prof Lai. In the end parents here will be realistic.

The PM and his ministers has backed down but it is a matter of time when the political ground becoes softer that they would reduce the weighting of Mother Tongue. If not, they would just find yet another of those clumsy equivalents to achieve the same.

This day again

Every year I remember the 26th day of June. These were the days I was discharged from the army. A few days later I would begin my studies for the next four years for my engineering degree.

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The new banks regulation

As expected it does not go as far as the 30s style Glass-Stegal act. Pull the banks back a bit, leave much to the regulators, which in a few years time can be bought clueless like the rating agencies were. Basically this is better than nothing and please don't ever think that the world is safer after this. Watch out for the next crisis.

For Singapore, I hope MM Lee never get the chance to merge the three banks into one. We can do everything right in Singapore but a one-mega bank only can with improper incentives, which rewards short term share price performance eventually sink us. Just look at what the government and the bureaucracy paid on GDP growth had rubbished productivity performance.

Business is business, but banking is banking.

How to punish a lying child

The child was expecting to be punished by her parents because that's what she had learned from the past but instead received forgiveness and no suspension of privileges. As the Father deals with us, we learn to do the same with our kids. I don't encourage this unless there is much prayer before. Imitating the Father is "humongously difficult". Hypocrisy is a micron away. Laziness is a master of disguise. Why am I writing this? Since there is so much prayerlessness, what I just said is mostly impractical nonsense. Therefore it is better to punish than to forgive the child until you learn to pray, pray, pray.

In a way this is not a message on parenting. It is a message on prayer and freedom.

Three banks is two too many

MM Lee strongly feels that we have still too many banks. I disagree.

Banks are not just any business entity. I am sure he knows this better than most. We are a small country, so having banks that go all over the world conducting business often exposed to and tempted with moral hazards especially when competing to out perform other banks is simply too risky. A bank like this fails, Singapore fails. Hasn't he learn a thing or two from UBS recent example?

Behavior does not arise from moral mandates but from incentives. I strain to see how we can create incentives for our banks competing internationally to be a success. Might as well just stay at home and in the region. I think the MM is wrong and Wee Cho Yaw is right.

It is incredible given DBS poor track record that he has the confidence to speak like this about bank consolidation and overseas adventurism.

Much ado over 150,000

150,000 visitors a day to the Marina Bay Sands. Why not? That is why Adelson was confident about setting up shop here. I am more concerned in the casino, how many would be locals. Is there a Plan B if the negative consequences turn out to be much larger than feared. I doubt there can be a Plan B. It would just be tough, tough, tough for the locals to accommodate and adjust as usual. This is now fully the scenario I painted in the mid-90s: Hotel Singapore. The visitors are the valued guests and many locals are servants.

Beware of religious explanations

I am about to begin reading Dan Ariely book, "predictably irrational". Is this book going to make some if the religious pet reasons we give to explain our behavior, I wonder look absurd?

Really, we musn't be too quick with, "the Bible says".


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Financial Bubbles

What is a financial bubble? There is no consensus actually. Therefore there will be much abuse of the term breeding confusion.

Those who love bubbles, they do so for obvious reason that they might make some good money quickly. The pessimists always think the bubble is going to burst sooner than later. In reality, nobody knows. About the furthest you can go is measure the energy of inflation or strain to grow some more.

Gutless Politicians?

Are we living in a world where courage is becoming ever scarcer? I wonder if Obama should not just listen to his Defense Secretary Robert Gates and keep Gen. McChrystal than just allow him to resign. Politics have triumphed over military considerations, and this might turn out to be very costly.

I wonder if Obama is not much more than an extremely eloquent President but too inexperienced to act with confidence. Speeches cannot substitute for effective action. The warnings of his detractors on the campaign trail that he is all words only, I wonder if it is not going to ring loudly true.

Back home, the government stood down from their plan to reduce the weighting of Mother Tongue in the PSLE. Some of my friends and I see this as lacking in political courage. The PM and his Education Minister were so clumsy in their withdrawal. The tail between the legs going out was unmistakable.

Big Business and Government

Will Singapore always able to prevent big business from influencing government? I doubt it. We will not allow it to imitate the forms that has occurred in other governments, but it will eventually happen. May be it is more accurate to say that it has when government almost consistently vote on the side of business with a naive assumption that what is good for business is good for everyone.

Time has passed sufficiently to show that the trickle down effect of wealth has not occurred here as well as elsewhere.

Politicians and Policy Makers

Politicians usually make lousy policy makers and vice-versa. Singapore has opted for using policy makers as politicians and making it hard for natural politicians to arise from other quarters. It works very well before but strains is showing and there is greater unhappiness. The work of government is getting harder as a result. May be we should think about how we might change course before it is too late.

Australians turning capitalists

From the WSJ,


The tax, which the government thought would win popular support by spreading the wealth from the booming mining sector, has instead backfired as the public worries it will damage Australia's credibility as an investment destination. Mining giants BHP Billiton Ltd. and Rio Tinto Ltd. warned billions of dollars of investment are at risk, and they have led a fight against the 40% levy, saying it would make Australia one of the highest-taxed jurisdictions in the world.


Kevin Rudd miscalculated that Australians would welcome the punitive resource tax that allows for redistributing the profits. There is more trust in the market than the government. He has now paid for it with the premiership. 

About Economists

Economists get it wrong because they are always behind the curve on human behavior. Anything else matters much less. It also explains why few are ever totally wrong. Each of us are right about how people behave sometimes.