Tuesday, March 24, 2009

Long Overdue Meeting

Once again, I happened to be the only thorn (sigh...) among the roses. On the far left, it's Irene and next to her, Winnie. To my left, there is Amanda, next to her is Connie and Jean on the extreme right.

This gathering on last Friday (20 Mar) was infact, long overdue and all thanks to Winnie, yes Winnie, my running mate who initiated the get-together of old comrades. And ya, one more thorn was supposed to join us but he (Vincent Kong) had a more important appointment with turf club, being an all important Friday for punters. Between horses and roses, he felt the former was more important for him. Thanks to him though, we had a good dinner at Bellini and much laughter too.

It has been ages since I last met Jean and Amanda, really I cannot remember when was that last time. Boy, both ladies still look gorgeous but no chance for me now for both of them are happily married with kids in tow. Err...friends forever!

I enjoyed the get-together albeit feeling bad that Winnie's car hit the kerb at tight corner in carpark, no qualm footing the bill like a gentleman and will be looking forward to the next gathering.

Ladies, this thorn is no ordinary thorn as it has its loving side too, save for the hair part. Till we meet again.

Wednesday, March 18, 2009

Perp Walks Instead of Bonuses

By Robert Scheer

There must be a criminal investigation of the AIG debacle, and it looks as if New York’s top lawman is on the case. The collusion to save this toxic company in order to salvage the rogue financiers who conspired to enrich themselves by impoverishing millions is being revealed as the greatest financial scandal in U.S. history. Instead of taking bonuses, the culprits should be taking perp walks.

I’m not just referring to the swindlers in the Financial Products Subsidiary of AIG who devised and sold those insurance policies on derivatives that brought the world economy to its knees. They do seem deserving of a special place in hell, and presumably the same divine power that according to Scripture labeled usury a high moral crime and threw the money-changers out of the temple will consider that outcome.

However, the enablers are the AIG leaders who, as New York Attorney General Andrew Cuomo revealed Tuesday, signed those bonus contracts a year ago to reward the very people “principally responsible for the firm’s meltdown.” That’s a cool $44 million divided among the top 10 shysters, even though the depth of their chicanery was well known to top management.

As Cuomo noted in a letter to Rep. Barney Frank: “The contracts shockingly contain a provision that required most individuals’ bonuses to be 100% of their 2007 bonuses. Thus, in the spring of last year, AIG chose to lock in bonuses for 2008 at 2007 levels despite obvious signs that 2008 performance would be disastrous in comparison to the year before.”

The lame argument that those bonus-baby employees needed to be retained in order to sort out the mess they had created was also shot down by Cuomo, who revealed after his office’s initial investigation had pierced AIG’s veil of secrecy that “[e]leven of the individuals who received `retention’ bonuses of $1 million or more are no longer working at AIG, including one who received $4.6 million.”

But the $165 million in taxpayer funds used to reward them is but a sideshow in a far larger drama of moral decay swirling around the banking bailout. It should not distract from the many billions, not paltry millions, of our dollars being diverted to reward the very folks who brought us such misery. Consider the $12.8 billion of the $170 billion that taxpayers gave AIG in bailout funds that AIG then secretly diverted to Goldman Sachs, a company that evidently has a lock on both the Treasury Department and the Federal Reserve no matter which political party is in power. It was the biggest payoff among those that AIG made to a score of foreign and domestic financial giants.

The bailout is a response to a banking crisis that resulted from the radical deregulation pushed by former Goldman Sachs honcho Robert Rubin when he was President Clinton’s treasury secretary. Another Goldman Sachs chairman-turned-treasury-secretary, Henry Paulson, in the Bush administration designed the trillion-dollar bank bailout that will go down as the greatest swindle in U.S. history.

It was because of Paulson that AIG was saved from bankruptcy hours after Goldman rival Lehman Brothers was allowed to go down the drain. Why that reversal of strategy in a top-secret meeting called by then New York Fed Chair Timothy Geithner, a Rubin protégé and now Barack Obama’s treasury secretary? Why was Goldman’s Lloyd Blankfein the only financial industry CEO in attendance? When that news leaked out, his role was defended as that of a noninvolved concerned citizen with expert knowledge, and whose firm had no direct monetary stake in the outcome.

That was a lie.

Goldman Sachs was into AIG insurance policies for at least $20 billion, which is why the firm got that $12.8 billion while Paulson was in charge. It took six months for the embarrassing facts to finally come out. The bailout program was administered by Neel Kashkari, a former Goldman Sachs VP; why are we not surprised at that?

Another pretend innocent in all this is AIG’s CEO Edward M. Liddy, famed defender of the $440,000 AIG executive retreat in Monarch Beach, Calif., held on the heels of the taxpayer bailout. His actions now are defended as mistakes made by a well-intentioned outsider who decided to work for a dollar a year after Paulson appointed him head of AIG. That is just garbage.

Liddy was complicit in Goldman Sachs’ role in creating this mess. As a director of Goldman Sachs, he was paid $685,770 in 2007 and would have come in for some questioning if the firm had gone down. Liddy even headed its audit committee during the five years before he resigned that seat to take over AIG in September 2008. As for his salary sacrifice, not to worry; in 2005, when he was still CEO of Allstate Insurance, he received $26.7 million in compensation.

What we have here is a rare glimpse into the workings of the billionaires’ club, that elite gang of perfectly legal loan sharks who, in only the most egregious cases, will be judged as criminals—Bernard Madoff, former chairman of NASDAQ, comes to mind. These other amoral sharks, who confiscated billions from shareholders and the 401(k) accounts of innocent victims, were rewarded handsomely, rarely needing to break the laws their lobbyists had purchased.

Sunday, March 15, 2009

Suburban Run @ North East on 15 Mar 2009

This run in Sengkang is only a teaser to the big race at year end, just 5km to test the ground. To our pleasant surprise, this event attracted quite a sizeable turnout and evidently, there are many fitness conscious Singaporeans, PRs and working expatriates out there where economic crisis is simply non-existent.

Missed taking Winnie's picture at the race venue for memento, took this one at Old Airport Road carpark where we headed for breakfast after the race.

The morning sun was quite fiery though we were flagged off @ 8 am and we didn't do enough warm-up due to long queue line for the toilet prior to the race. 5 km, yes but it was not an easy one owing to the weather. We ran the usual pace and finished around 32 mins (1 min of so to be taken off due to crowding in the front when flagged off).

At the finish point, we were given a nice medal (not some cheaply produced certificates at the last race, no name of the organisers mentioned) coupled with a stylish cap. On whole, it was not a bad race though I lament more volunteers could be properly assigned to guide the runners, coz at some point, it was somewhat confusing.

One down, more to go...but saving the best for last; for me, the 42 km and for Winnie, it's 21 km. Go for goal!

Sunday, March 08, 2009

Billions Dished Out In The Shadows

By Robert Scheer

This is crazy! Forget the bleating of Rush Limbaugh; the problem is not with the quite reasonable and, if anything, underfunded stimulus package, which in any case will be debated long and hard in Congress. The problem is with what is not being debated: the far more expensive Wall Street bailout that is being pushed through—as in the case of the latest AIG rescue—in secret, hurried deal-making primarily by the unelected secretary of the treasury and the chairman of the Federal Reserve.

Six months ago, we taxpayers began bailing out AIG with more than $140 billion, and then it went and lost $61.7 billion in the fourth quarter, more than any other company in history had ever lost in one quarter. So Timothy Geithner and Ben Bernanke huddled late into the night last weekend and decided to reward AIG for its startling failure with 30 billion more of our dollars. Plus, they sweetened the deal by letting AIG off the hook for interest it had been obligated to pay on the money we previously gave the company.

AIG doesn’t have to pay the 10 percent interest due on the preferred stock the U.S. government got for the earlier bailout funds because that interest will now be paid out only at AIG’s discretion, which means never. The preferred stock, which got watered down, carried a cumulative interest, meaning we taxpayers would have recaptured some money if the company ever got going again, but that interest obligation was waived in the new deal.

We’ve already given AIG a total of $170 billion—an amount that dwarfs the $75 billion allocated to helping those millions of homeowners facing foreclosures. And more will be thrown down the AIG rat hole because President Barack Obama is blindly following the misguided advice of his top economic advisers, who insist that AIG is too big to fail.

“AIG provides insurance protection to more than 100,000 entities, including small businesses, municipalities, 401(k) plans and Fortune 500 companies who together employ over 100 million Americans,” the joint Treasury Department and Fed statement declared while insisting that for that reason, plus the “systemic risk AIG continues to pose and the fragility of markets today, the potential cost to the economy and the taxpayer of government inaction would be extremely high.”

What about the cost of inaction by Treasury and the Fed before this meltdown? If AIG were so important to the American economy, shouldn’t government regulators have been looking more closely at its activities? They couldn’t then, and even now they don’t understand what AIG has been up to, because the company was allowed to operate in an essentially unregulated global economy in which multinational corporations have their way. As the Treasury/Fed statement concedes: “AIG operates in over 130 countries with over 400 regulators and the company and its regulated and unregulated subsidiaries are subject to very different resolution frameworks across their broad and diverse operations without an overarching resolution mechanism.”

Oh, really? And you’re discovering that only now, when you’re making us bail AIG out? It wasn’t that long ago that a couple of hustlers operating out of an AIG office in London were going wild making money off selling insurance on credit default swaps that no one could understand, but the company execs loved those huge profit margins. To challenge their maneuvering, as some in Congress attempted, was said by their defenders, including Geithner, to put them at an unfair disadvantage in the world market. Ignorance was bliss … until the bubble burst.

This was all belatedly conceded by Bernanke in his Senate testimony on Tuesday: “AIG exploited a huge gap in the regulatory system. There was no oversight of the Financial Products division. This was a hedge fund, basically, that was attached to a large and stable insurance company, made huge numbers of irresponsible bets—took huge losses. There was no regulatory oversight because there was a gap in the system.”

AIG used to be in the conventional insurance business, covering identifiable risks it knew something about, until it took advantage of deregulation and a lack of government surveillance to come up with contrived new financial products. Even Maurice Greenberg, the man who built AIG from the ground up over a span of 40 years before he was forced out amid corruption charges in 2005, admits that he didn’t understand the newfangled financial gimmicks that the company was peddling. This week, claiming he too was swindled, Greenberg sued in federal court, charging the AIG execs who forced him out with “gross, wanton or willful fraud or other morally culpable conduct,” over the credit default swap portfolio that was part of his settlement.

U.S. taxpayers now have ownership of almost 80 percent of AIG, but with the company’s once solid traditional insurance business now suffering a steep loss of consumer confidence, it’s not likely that even the formerly healthy parts of the company will be worth much. What we have here is all pain and no gain for the taxpayers roped into this debacle, which is proving to be the story of the entire banking bailout.

Saturday, March 07, 2009

Newton Active Run 2009

Ran this 10km race with my regular running partner, Winnie on 1 Mar, Sunday. For Winnie, it was her first attempt at 10km and prior to the race day, she was not sure whether she could finish the race not walking at some stage. We have had some training at East Coast in the evening after work, the two last covering near 6 km only - the longest run by far.

Quietly, I knew she could deliver around 1 hr 10 min or better but she felt too much pressure had been asserted on her if a target was set for her. She would prefer to run her own pace and to complete it only, relieving her of any pressure for best time. I left it at that but I remained confidence that 1 hr 10 min is not too far-fetched.

The race venue was at Sengkang, near Farmway LRT. We arrived before the flagged off at 0745 hrs, did our warm-up and joined all the runners in the men's and women's veteran category at the start-off. Finally, we were flagged off by Defence Minister Teo. Trying to retire to bed early the night before, Winnie could only manage two hour of sleep and physical fitness could be compromised as a result. Fortunately, it was a cool morning and the track was fairly level throughout, save for some slight uphill in the park.

At the 3 km mark, I could hear her heavy breathing and some bit of struggle but she kept running, keeping a steady pace. One step forward meant one step lesser to our destination, we kept running and never once, stopped for a breather. I was pleasantly surprised at her pace despite fighting sleep the night before. About 1 km to the ending, I took a glance at my watch. We were under 1 hour and by then, I knew we can hit the tape under 1 hr 10 mins. I kept it from Winnie for obvious reason.

Coming to the final 100 metre, the big clock above showed 1 hr 3 mins plus...and I finally said to Winnie, try to finish under 1 hr 5 mins. She got the message and made a final dash - clocking 1 hr 4 min, a fantastic finish to the tape.

For good measure, she finished in a creditable 26 position out of 65 in her category - women's veteran in her first 10 km race. Her timing could have placed her 603 out of 865 in men's category, 129 out of 175 in men's veteran category and 102 out of 285 in women's category. If she is not a super mum, who else is? Kudos Winnie, keep running.

A Trillion Here, A Trillion There

By Douglas Rediker

In England, home of the English language, the word "trillion" is rarely used. Instead, the phrase "a thousand billion" is used instead. I recommend that the US follows suit. It is not that I am an anglophile, but rather that I believe we have reached the point where the number "one trillion" simply fails to capture just how big it (and the financial crisis that causes us to use this number on a regular basis) really is.

A thousand billion is, I think, a far better means to express just how big this number really is. After all, the famous phrase allegedly uttered by Senator Everett Dirksen about "a billion here and a billion there and sooner or later you're talkin' about real money" was his way of expressing the same concept - about a number that is one thousand times smaller than the trillion dollar number that is increasingly being used to express our current predicament.

Try this out - Economist Nouriel Roubini, who correctly forecast the scale of the current crisis, recently estimated that total losses on loans made by US financial firms and the fall in market value of the assets they are holding will be about $3.6 trillion, with US banks and broker-dealers exposed to about half that amount - or $1.8 trillion.

Based on his calculations, approximately another $1.4 trillion will be needed to restore banks to the level of capital they had before the crisis. Are you still sitting down? You shouldn't be. These are enormous numbers that imply enormous problems. But the size of these figures is just not easily internalized by our brains.

Now see if this makes a difference - the total market capitalization of Citi, is now around $5 billion, while that of Bank of America is around $15 billion and Morgan Stanley is around $19 billion. The total fall in value of assets held by the US banking sector is around $3,600 billion creating a hole of about $1,400 billion. See what I mean.

As we increasingly read about TARP, stimulus, rescue packages and the rest, it is important to constantly remind ourselves that each trillion is actually a thousand billion dollars. Or, if you want to really put it in perspective, each trillion is a million million dollars (1,000,000 x $1,000,000).

I am sure that mathematicians and psychologists could explain why the numbers do what they do and the brain does what it does, but what is important to me is that we not lose sight of the size and scale of the world's current economic and financial woes. The numbers are big - really big. So big that I simply don't think that the word "trillion" does it justice.

So I, for one, will no longer use the word "trillion" but rather will revert to the "thousand billion." It's my tiny contribution to fostering a better understanding of the size and scale of the current problems confronting us all.

Thursday, March 05, 2009

New Port Challenge 2009

It's 'Drink & Drive' time, who gives a heck to cops, anyway...but there's a catch, it is only made possible in Nongsa, Batam island. Drink a peck before you drive away, ehh...we are talking about golf, and yes, golf for all races, religions and ages. Both genders are welcomed too.

Led by Batam View Beach Resort and its 3 partners, Turi Beach, Palm Springs Golf and Tering Bay Golf, this New Port Challenge 2009 is sponsored by, no doubt, New Port Duty Free Pte Ltd.

1-night accommodation @ Batam View or Turi Beach, plus 2 rounds of 18-golf game, lunch & gala dinner and fabulous prizes awaiting to be given away too. It is only $188 per golfer, unbelievable but it is real. To up the ante, lucky draw winner stands to walk away with S$2,888 hot cash.

Call our SIN toll free line, 800 6211 121 or email reservation@batamview.com for more enquiry or booking.

Note: Limited flights available, first-come-first-served hor!

Best Designed Float Award - Chingay Parade 2009

For the first time in Chingay Parade history, awards in various categories were judged by a panel of distinguished guests at the last Chingay Parade. And equally for the first time in our three consecutive years as lead sponsor of Chingay Parade, New Century Foundation has finally earned the accolade for the best designed float. A thank you & award giving ceremony cum dinner reception was held at MICA Building on 3 Mar. The guest-of-honour was Minister Lim Boon Heng who is also the deputy Chairman of People's Association.

Tuesday, March 03, 2009

NATAS Travel Fair 2009 - 27, 28 Feb & 1 Mar

Not wanting to be left out, Batam View Beach Resort worked out a deal with Global Holidays to co-share the booth at the three days travel fair. Led by their bubbly Magdalene Chong, the Batam View team worked tirelessly at the booth. This is the biggest travel event of the year, taking such a opportunity to showcase the resort is certainly 'god-a-given' under such gloomy economical situation.