‘You can feel like you are on holiday’

‘You can feel like you are on holiday’
By Kitty Go
Financial Times

Published: December 8 2007 00:22 | Last updated: December 8 2007 09:54

Austrian Christian Rhomberg, 51, is the co-founder and director of the 97 Group, which he established in 1982. He now owns and manages 12 restaurants in Hong Kong and Shanghai. He is also executive director and founder of Kee, one of the city’s most exclusive dining clubs.

I came here with the foreign service as deputy Austrian trade commissioner. Hong Kong has been my home for 25 years, since I was 26 years old. I fell in love with the entrepreneurial spirit of the city and it inspired me to open my first restaurant, 1997, with some friends in 1982. I was young and I found the city very mysterious, sexy and exotic, especially coming from Austria, which was the complete opposite. The reason I wanted to leave Europe was because I wanted to go somewhere completely different, to an exciting and vibrant place that had a lot of growth potential.

When I was in my 20s, I met friends in nightclubs but I couldn’t find one I really liked, so I opened one myself. When I first arrived in Hong Kong choices for dining and drinking spots were confined to hotel outlets and a few pubs but not trendy western cafés or restaurants. My friends and I talked among ourselves and decided we should open one because that was what was obviously missing. My office was in the financial district yet, for an international city, at that time, entertainment was virtually non-existent.

In Hong Kong, to make a successful party you have to surprise people with a unique location. Five years ago, for the Kee anniversary, we rented a warehouse and an amphitheatre to host a party for 2,500 people. We had a circus and an Hermès fashion show amidst gardens, fountains and elaborately decorated stages. Ten years ago we found an old fashioned, sleepy amusement park, which doesn’t exist anymore, in Lai Chi Kok. There was a Chinese-themed garden with ponds, tea houses and a replica of the Great Wall. We didn’t tell our guests the location until the last minute and they came in costume. We flew in top impersonators of Michael Jackson, Madonna and Elton John from Las Vegas to perform.

Unfortunately Hong Kong has become very serious in business and people work too much. In my first 10 years of operation, we had a lot of business people coming in for leisurely lunches. These days, people rush back to the office. Business is very exciting, yet demanding, nowadays. I really wish the city would invest more into making it clean and green in terms of air and water quality. I don’t think it would require that much work – just a little more vision on the part of the government. Singapore and Sydney have shown us that there is a lot of potential [for cities] to be beautiful. Doing so will really make Hong Kong the “pearl of Asia” or the Monte Carlo of China. I think that would be really nice. In Monte Carlo you can still swim in the harbour between the yachts so why can’t we do that here?

I am from Innsbruck and grew up as a good skier and I am very much a sportsman. I still have family there and we have a beautiful home there. Normally I spend two to three months of the year in Europe and I am also working on something very different for that market. We have a beautiful property there with two lakes where we will build a transcultural health centre for preventive health and also a museum. Since I come from Austria, I like nature and, with a little effort, there are lots of walks in Hong Kong. Every morning I walk on the Blacks Link trail for an hour. On weekends I take my kids to [one of] the many country parks or we go out with friends on boats. You can really feel like you are on a tropical holiday in Hong Kong but you have to make a little bit of effort. Equally, the city is not a cultural desert; there is a lot of theatre, concerts and exhibitions where visual arts are expanding very quickly.

The quality of living in HK is expensive and then you also have to make an effort. Right now the market it very “brought through”, so there are not as many opportunities as in the early days. The fun in my business is to constantly reinvent ourselves and that makes it exciting. Kee is a sophisticated restaurant during the week and a trendy nightclub on weekends, which is a concept we chose on purpose. These days, there is every concept, every cuisine and entertainment you can imagine hosted in very interestingly designed venues.

You have to be up to date with global trends because the Hong Kong market is very demanding. In general, the western-oriented market has developed and become very sophisticated. In the beginning there were a handful of restaurants and bars similar to what we have in our group. These are operated both by foreigners and local Chinese who have travelled and wanted to do something they saw abroad.

Ideally, you should own your own property. When it comes to business it’s important to find the right location and, if you can’t own your own property, have a partnership with your landlord. Otherwise you will be exposed to exorbitant rent increases every three years.

Austria’s main business is tourism, yet there is very high taxation and bureaucracy that make it very difficult to make money there. Of course it’s also not as dense as Hong Kong. Innsbruck has 150,000 inhabitants and a third are students, so it is a good place for small cafés, bars and restaurants. And the Austrians love to eat and go out as much as the Chinese so this is not the problem. Having good staff is a problem in Europe. Europeans don’t want to be in the service profession so you have to work with a lot of foreigners but for a good restaurant to work you have to really work with local people.

The Other Derivative Problem

By now everyone can recite how crummy mortgages got packaged into asset-backed securities, and how, after the tastier tranches were sliced off, the meat by-products got sent along to the CDO sausage factory to be made palatable again. Now CDO investors are puking up all over town.

But there has been another derivatives party going on, where the bubbly is still flowing to a large extent. That, as many will relate, is the explosion in credit default swaps (CDS) that has appeared over just the past few years.

Structured finance has been around since the 1980s, but the CDS market is essentially brand new. The CDS was invented in the mid-1990s but it was minor until the last four years. Since 2003, this market has exploded in size by 10x, to a total notional amount of about $45 trillion. Yes, that’s trillion with a “t”. This market has never been tested in any kind of economic downturn, not even the most recent one of 2001-2002.

The credit-default swap is insurance against a credit accident. The seller of CDS receives a small monthly payment. If the insured bond fails to perform, the buyer of CDS receives a large one-time payment from the seller. At first, in the 1998-2002 period, this was mostly a way for holders of bonds to insure themselves. However, in recent years, the CDS market has become a way for CDS buyers to wager on credit deterioration, and a way for CDS sellers to act like banks.

Banks are a wonderful business, when everything is working right. They have returns on equity that can range from 15% to as much as 25%. These are the kinds of returns that get hedge funds, and their investors, interested. However, it is difficult to enter the banking business. You need offices, branches, depositors, employees, advertising, and so forth.

Banks traditionally profit on the interest rate difference, or “spread”, between the money they borrow, from depositors for example, and the money they lend, to corporations for example. They may lever up ten to one, supporting $100 billion of assets on $10 billion of equity. Thus, if their spread is 2%, and they are levered 10:1, their return on equity is a juicy 20% (actually more like 24% because of the return on the underlying capital).

The CDS contract allowed hedge funds to act like banks. The monthly premium on the CDS is a spread between the equivalent Treasury yield and the implied yield on the underlying bond. This can be considered payment for the risk of default, which the Treasury bond presumably does not have. Imagine you’re a fund with $1 billion in capital. You could try to borrow $9 billion – from whom? – and then buy $10 billion in bonds, and enjoy the spread, like a bank. However, that $9 billion would probably have a higher interest rate than a Treasury bond, because the fund also has risk. And, the maturity of the borrowed money would likely be very short, while the bond has a long maturity, introducing duration risk (this didn’t seem to scare the SIVs however).

The CDS solves these problems. You just sell CDS on $10 billion of bonds. This doesn’t cost any money. You don’t have to put up any collateral. You don’t have to hire a single bank teller or loan officer. You just call your broker, put in the order, and start getting your monthly payments, just as if you had borrowed $9 billion (at the same rate as the Federal government) and lent $10 billion.

And the fund manager who made this one single phone call? If we assume a 20% return, and $1 billion of capital, he collects about $60 million per year. Which explains the explosive growth of the CDS market in the last four years.

Ah, there’s something. You “call your broker.” Actually, you call your dealer. It’s not so easy to just find a buyer for your $10 billion notional of CDS. This is an over-the-counter market. This is where the big broker-dealers, like JP Morgan, Bank of America, and Citibank step in. Over-the-counter markets are lovely for dealers because of the fat spreads – there’s that magic word again that pricks up bankers’ ears – between bid and asked in this market. So, what happens is you sell the CDS to your dealer, such as JP Morgan? JP Morgan then sells CDS – of its own issuance – to its customers that want to buy CDS.

So, you see that JP Morgan now sits in the middle, like a banker should. JP Morgan is “long” the CDS you sold to them, and also “short” the CDS it sold to someone else, and is thus theoretically hedged from risk while collecting the spread between the prices it bought and sold at. This is a lot like bankers’ traditional business of pocketing the spread between the rate it borrows and the rate it lends.

So, it should be no surprise that the big broker/dealer banks (JP, BofA, Citi) account for 40% of the CDS outstanding. Hedge funds account for 32%. This reflects banks’ monkey-in-the-middle dealer strategy for CDS. The remainder is likely insurance companies, synthetic CDOs, CPDOs, and other weird fauna that will soon become extinct. (Thanks go to Ted Seides of ProtÈgÈ Partners for aggregating this information.)

Now, that 32% of CDS sold by hedge funds has a notional value of $14.5 trillion. This means that, if all those bonds underlying the CDS were a total loss, the funds would have to pay $14.5 trillion. Not very likely. However, if there were only a 5% loss – not so impossible these days – the CDS-selling hedge funds would still be on the hook for $725 billion. Hedge funds, all together, have estimated assets of around $2.5 trillion. However, only a small fraction of those are CDS-sellers. Let’s take a guess at 10%, or $250 billion of capital. (It’s probably less than that.) How do you pay a $725 billion bill with $250 billion of capital?

There’s an easy answer to that: you don’t. So, who pays? The banks, remember, are in the middle. If the CDS-selling hedge fund doesn’t pay up on its $725 billion, then the bank is unhedged regarding the CDS that it sold. In this case, the banks would be liable for $475 billion. This is known as counterparty risk.

That’s four-seventy-five billion. More than four times the entire capital of Citigroup – capital which has already come under pressure from losses elsewhere.

So, what happens if there is a CDS counterparty-risk event? Do the big banks go bankrupt? Probably not, although there would be much wailing and gnashing of teeth. Instead, they would probably get a nod and a wink from the government to simply ignore their own CDS obligations. The counterparty risk shifts to CDS-buyers.

The CDS buyers can take the hit, because they aren’t really out any money. They paid their monthly insurance bills, but never got a payout after the credit market car crash. So, in a sense, this drama would likely end in more of a whimper than a bang. In fact, everyone got off OK: the CDS-selling hedge fund manager made a killing in management fees, before the fund went bust; the bank made a killing in dealer income, before kissing their obligations goodbye, and the CDS-buying hedge fund manager raked in the fees on the enormous mark-to-market profits of his CDS portfolio (20% of the aforementioned $725 billion), before these profits were eventually shown to be uncollectible. A perfect Wall Street happy ending.

However, the kind of situation in which large banks ignore multi-hundred billions of legal obligations is very extreme. The last time something like that happened was in the early 1930s. At that time, they called it a “bank holiday,” which has a nice festive ring. The celebration included a devaluation of the dollar, the first permanent devaluation in U.S. history. At least president Roosevelt had the good sense to repeg the dollar to gold at $35/ounce, parity it maintained until 1971. Feel free to make your own guesses as to what Paulson and Bernanke might try.

Regards,

Nathan Lewis

Governments

Betting against gold is the same as betting on governments. He who bets on governments and government money bets against 6,000 years of recorded human history.

~Charles De Gaulle~

China says falling US dollar is a concern

12 December 2007 1700 hrs

XIANGHE, China: China said Wednesday that a weakening US dollar was a bigger global economic concern than the value of its own currency, as it rejected calls for the yuan to be allowed to rise very quickly.

Chen Deming, vice minister of commerce but slated soon to rise to head the ministry, argued that “excessively fast appreciation” of the Chinese currency, called the yuan or the RMB, would be in no one’s interest.

“In my capacity of vice minister of commerce, (the Chinese currency) is not the key issue. Currently my focus is more on the depreciation of the US dollar and its possible impact and repercussions for the world economy,” he said.

“I sincerely wish to see a scenario where the US economy is getting stronger and the US dollar is getting stronger.”

Chen was speaking at a briefing on the sidelines of the third Sino-US Strategic Economic Dialogue, a two-day event bringing together Cabinet-level officials from both sides at a venue an hour’s drive from Beijing.

A continued weakening of the US dollar has negative consequences such as a rise in the price of oil and the erosion in the wealth of countries that hold their assets in the US unit, Chen said.

US Treasury Secretary Henry Paulson said at the dialogue earlier Wednesday a more flexible Chinese currency would also benefit China, making it easier for the government to handle some of its own domestic economic issues.

Chen said China was not opposed to the yuan appreciating but warned that a too rapid rise would cause trouble in global markets.

“If we were to see excessively fast appreciation of the RMB, then it would create repercussions to the global economy and global financial markets. I don’t think it would do anyone any good,” he said.

“Remarks by some people around the world, including in the United States, that they favour appreciation that is as fast as possible, are not responsible.”

US critics have argued the yuan is kept at an artificially low level, making Chinese products cheaper abroad and giving Chinese exporters an unfair advantage.

Singapore to invest almost US$10b in Swiss bank UBS

I wonder whether GIC has thought about the full extent of the upcoming financial meltdown. UBS must have approached GIC because no one in the U.S. was prepared to be the single largest shareholder of UBS, which, according to the rumour mill, is technically bankrupt.

Singapore to invest almost US$10b in Swiss bank UBS

Posted: 10 December 2007 1625 hrs

SINGAPORE : The Singapore government’s investment arm announced Monday that it will inject almost US$10 billion into Swiss bank UBS.

The Government of Singapore Investment Corporation (GIC) said it would inject 11 billion Swiss francs (US$9.74 billion) into UBS, which on Monday announced further writedowns of around US$10 billion (6.8 billion euros) due to the US sub-prime mortgage crisis.

GIC said an undisclosed strategic investor in the Middle East is injecting an additional two billion francs into the bank.

“We made this significant investment in UBS because we have confidence in the long-term growth potential of the bank’s businesses, particularly its global wealth management business,” GIC’s deputy chairman and executive director, Dr Tony Tan Keng Yam, told a news conference.

GIC has committed to subscribe to 11 billion Swiss francs worth of mandatory convertible notes that will pay a coupon of nine percent until conversion into ordinary shares about two years after issuance, UBS said.
Depending on the conversion price, Dr Tan said GIC’s total shareholding “could amount to possibly around nine percent of UBS equity”.
GIC currently has less than 1.1 percent of the bank’s equity, he said.
“Nine percent is a large stake. I think we would be the single largest shareholder in UBS,” Dr Tan added.
GIC executives said the move marked a departure for the firm, whose practice has been to take relatively small public equity stakes for portfolio diversification.
“It is a departure from the norm in the sense that it is a larger than usual stake but we made the decision based on our confidence in the long-term prospects of UBS,” said Ng Kok Song, GIC managing director and group chief investment officer.

He and Dr Tan emphasised that GIC does not seek a say in management and said it would be premature to talk of GIC’s obtaining a seat on the UBS board.
“We’ve got no desire to control the business of the bank but as a large investor, as a large long-term investor, we would like to work with the board of the bank, the chairman and the management to create maximum value for all shareholders,” Ng said.

UBS, Switzerland’s largest bank, in October reported its first quarterly loss in five years after its third-quarter results were hit in the financial crisis caused by the ailing US home loans market.
On Monday the bank said in Zurich that it has revised the assumptions and inputs used to value US sub-prime mortgage related positions, resulting in further writedowns of around US$10 billion.

UBS said it expected to post a fourth-quarter loss and may record a net loss for the full year 2007.

“I don’t think that either UBS or any bank can say with absolute certainty that this is the last of the writedowns,” Tan said.
But he added UBS “have taken a very aggressive writedown” and acted before the market develops problems.
“Our intention is to remain a responsible, supportive investor in UBS, hopefully for the long term,” Tan said.

He added that UBS approached GIC about a possible deal, and then “at their own initiative” contacted the other investors whom he declined to identify.
GIC was established in 1981 to manage Singapore’s foreign reserves and now manages “well above” US$100 billion, making it one of the world’s largest fund management companies, its website says.
“The group strives to achieve good long-term returns on assets under our management, to preserve and enhance Singapore’s reserves,” it adds. – AFP/ch

Charlott Vasberg

I bought a new bag today from Harvey Nichols. The most rock-and-roll tote bag in the universe, this leather shopper from London sensation Charlott Vasberg is also ingeniously designed for busy city-dwellers. Features unusual handle details and zip pockets aplenty, including an open-and-shut bottom compartment for your much-needed backup pair of slippers.

Sim Kee Boon

ST Nov 11, 2007
A keen golfer with a mean swing

By Terrence Voon

MR SIM COULD NOT bear to stay away from golf for more than a week.
THE man who built a world-class golf course from a plot of barren land had a mean golf swing himself.

Mr Sim Kee Boon, who died on Friday at the age of 78, was an ardent golfer who could not bear to stay away from his favourite pastime for more than a week, say his staff and friends.

Even when he headed the civil service and, subsequently, Keppel and the Civil Aviation Authority of Singapore, he still found time to tee off on weekends. One of his favourite putting grounds was the Garden Course at Tanah Merah Country Club (TMCC), which he founded in 1982 at the behest of then-prime minister Lee Kuan Yew.

His interest in the game first developed in the 1970s, when he joined the Ministry of Communications as permanent secretary.

‘He was one of the few perm secs who knew how to play golf,’ recalled TMCC captain Goh Hup Chor, who knew Mr Sim for over 20 years.

Mr Sim’s wife, Jeanette, also a keen golfer, is the club’s current lady captain.

According to his friends, Mr Sim’s handicap was as low as 11. Though it went up to 22 in the past few years, his technique remained as good as ever.

‘He was a short hitter, but he hit the ball straight. He hardly ever got into trouble on the fairways,’ said TMCC events director Edwin Khoo, who used to play a few rounds with his boss.

Mr Sim’s regular golf ‘kakis’ included former finance minister Richard Hu and TMCC president Tan Puay Huat.

‘Whoever won the game would pay for meals after that,’ said Mr Khoo.

Mr Sim played golf the way he ran TMCC as chairman – with precision and a keen attention to detail.

Said the club’s marketing manager, Ms Han May Leng: ‘He once came up to me and told me to fix the signages on the golf course because they were slightly tilted. He wanted them to be straight as an arrow. For him, everything had to be first-class.’

Mr Sim led by example, even picking up litter on the club grounds. He was often seen in a T-shirt or short-sleeved shirt – a dress code he also imposed on all male employees at the club.

‘His reasoning was that if you’re in a shirt and a tie, you would stay in the office and never get out to see how things really were at the club,’ said Ms Han.

Under his charge, TMCC membership rates rose from an initial $20,000 to $190,000 now. The Garden Course was named the No.1 course in Singapore for three years running by the United States-based Golf Digest magazine.

Though he demanded nothing but the best from his staff, Mr Sim also dished out compassion in equal measure. They recalled how he would often ask about their health and their families – a personal touch that made him a popular figure even outside the club.

Said Pan-West retail manager P.M. Samy: ‘Whenever he came to my shop, he would never fail to ask about my work, my family and my life.

‘He was a real gentleman – both humble and approachable – a man who had golf in his blood. His passing is a great loss to golf.’

S’poreans owe pioneer civil servants a big debt: PM Lee
Paying his respects, he says those like Sim Kee Boon saw the country change and made change happen
By Peh Shing Huei


SINGAPOREANS owe the pioneer generation of public servants such as Mr Sim Kee Boon an ‘enormous debt’, said Prime Minister Lee Hsien Loong yesterday.

‘There was a certain cut of the people who were of that generation,’ he said, after paying his respects to the former civil service head who died on Friday.

‘They grew up, they saw the country change, they made the change happen.’

They were ‘the last of the Mohicans’: a phrase which another former civil service head, the late Mr Howe Yoon Chong, had used to describe himself and Mr Sim, both of whom were among the founding group of top administrators.

‘In a way, that’s true,’ said Mr Lee. ‘That generation of public servants, we owe them an enormous debt.’ Mr Howe, who was also a Cabinet minister, died three months ago.

Mr Sim was 78 when he lost his 17-year-long battle with stomach cancer on Friday.

MM Lee’s tribute to Sim Kee Boon
MINISTER Mentor Lee Kuan Yew paid his respects to the late Sim Kee Boon last night. He released a condolence letter to Mrs Sim and a tribute to her husband.

Letter to Mrs Sim

After retiring from the civil service in 1984 – which included a five-year tenure as its head – he joined Keppel Corporation as its executive chairman and turned the loss-making outfit into one of Singapore’s leading conglomerates.

From 2000, he was also a director of Temasek Holdings.

Mr Lee, who was accompanied by his wife Ms Ho Ching, said Mr Sim was not just doing a job but was sharing his experience, wisdom and perceptiveness as well.

While paying tribute to Mr Sim’s work in building Changi Airport, Mr Lee also praised him for setting the tone of the civil service and leading it to achieve many things.

‘Not everything was done personally by himself. But the leader’s job is not to do everything by yourself. It’s your job to enable other people to work and to be productive and he achieved that,’ he said.

‘He’s not a flamboyant person. He doesn’t put himself on a high pedestal. He’s very easy to get along with, chatty, gregarious, but very sharp mind, very clear what needs to be done.

‘And if you are dealing with a touchy situation, not just in Singapore but with our neighbours or with some other countries, you can depend on him to understand what the issue is, what the other side is trying to achieve, how we can get what we need and maintain the relationship.’

Minister Mentor Lee Kuan Yew and several other Cabinet ministers, including Foreign Minister George Yeo and Defence Minister Teo Chee Hean, as well as former deputy prime minister Tony Tan, who is also SPH chairman, were among those at the wake yesterday.

The wake, which continues until Tuesday, is at Mr Sim’s home at 114 Watten Estate Road.

Steve Friedman

If you are not constantly working for constructive strategic change, then you are the steward of something which must erode. Competitors will leapfrog over you, and clients will find you less relevant. If that was your approach, why would you even want the job?

– Steve Friedman, Former CEO of Goldman Sachs

Some quotes

“A gentleman is not to be found in the office before 11 and never stays beyond four.”

– Alfred de Rothschild, quoted in The World’s Banker – The History of the House of Rothschild by Niall Ferguson

“You could be somewhere where the mail was delayed three weeks and do just fine investing.”

– Warren Buffett, quoted on Global-investor.com

Blue Ocean Strategy

The “ocean” refers to the market or industry. “Blue oceans” are untapped and uncontested markets, which provide little or no competition for anyone who would dive in, since the markets are not crowded. A “red ocean”, on the other hand, refers to a saturated market where there is fierce competition, already crowded with people (companies) providing the same type of services or producing the same kind of goods.

Their idea is to do something different from everyone else, producing something that no one has yet seen, thereby creating a “blue ocean”. An essential concept is that the innovation (in product, service, or delivery) must raise and create value for the market, while simultaneously reducing or eliminating features or services that are less valued by the current or future market.

More info: http://www.blueoceanstrategy.com/downloads/bos_web.pdf

Work is love

Work is Love made visible.
And if you can’t work with love but only with distaste,
It is better that you should leave your work
and sit at the gate of the temple and
take alms of the people who work with joy.

Kahlil Gibran

The Hidden Dangers of Cell Phone Radiation

The Hidden Dangers of Cell Phone Radiation

By Sue Kovach

Every day, we’re swimming in a sea of electromagnetic radiation (EMR) produced by electrical appliances, power lines, wiring in buildings, and a slew of other technologies that are part of modern life. From the dishwasher and microwave oven in the kitchen and the clock radio next to your bed, to the cellular phone you hold to your ear—sometimes for hours each day—exposure to EMR is growing and becoming a serious health threat.

Read the entire article

Electromagnetic Radiation:
Intervention Recommendations from the Safe Wireless Initiative

To minimize dangerous electromagnetic radiation from your personal environment:
Keep your cell phone at least 6-7 inches away from the body while it is on. Continue reading “The Hidden Dangers of Cell Phone Radiation” →

Singapore Government investments de-linked from CPF funds

IN ‘CPF finances: Clarity needed to clear the cloud of confusion’ (ST, Sept 20), Ms Chua Mui Hoong questioned whether the CPF provides a cheap source of funds for the Government’s investments. Subsequent Forum letters also raised the matter of how the return on CPF funds is calculated, and what constitutes a fair return.

The interest members receive for their CPF money should reflect what they could earn by investing in the financial markets, in investments which have comparable risk and duration. All CPF balances are guaranteed by the Government and hence free of risk. Hence the Special, Medisave and Retirement Account (SMRA) interest rates will now be pegged to long-term government-bond yields. Furthermore, the first $60,000 of each person’s CPF balances, to be held for the long term, will attract an extra 1 percentage point in interest. This means that they will always earn at least 3.5 per cent interest.

No commercial bank or fund manager offers more generous terms on such investments. Members seeking higher returns can take out their funds to invest through the CPF Investment Scheme (CPFIS). However, 83 per cent of CPF members who invested their OA savings in the CPFIS from 2002 to 2006 realised less than 2.5 per cent returns – the base rate of the OA. Half of all members who invested experienced negative returns, losing some part of their capital sum.

The CPF Board invests members’ savings in special securities issued by the Government, which pay the CPF Board the same interest rates that its members receive. The Government pools the proceeds from issuing these securities with the rest of its funds, and invests them professionally for long-term returns. This is completely de-linked from the CPF Board and CPF members. Were this not so, CPF members would be exposed to the investment risks and could not receive guaranteed minimum interest rates.

Up to now, both GIC and Temasek Holdings have earned returns that exceeded CPF interest rates, on average over the years. But this does not mean that the Government is making use of the CPF as a ‘cheap source of funds’, or earning a ‘spread at people’s expense’.

First, the Government does not need more funds to invest. Even if it did, it could raise funds more cheaply by issuing treasury bills and government securities, instead of using CPF funds.

Second, Temasek and GIC achieve higher returns on average only by taking on more investment risks. Hence these returns are volatile – they can be low or even negative in some years. Furthermore, we cannot assume that GIC and Temasek will do as well in future. The past two decades have been an exceptional period for global financial markets. Looking ahead, we cannot rule out protracted market downturns, lasting several years. Most CPF members have small balances and will not welcome these risks. Neither will older members waiting to withdraw their retirement funds.

Third, Singaporeans benefit when GIC and Temasek investments do well. Every year, the Government draws part of these investment returns to fund the annual Budget. The revenue is spent on worthwhile investments and social needs, including subsidies for housing, education and health care. And from time to time, the Government distributes accumulated budget surpluses to citizens through CPF top-ups and other schemes.

The Government does not rule out the possibility of introducing private pension plans for those with balances above $60,000 and a higher capacity to take risk. However, it would be unwise for members with low balances to take excessive risks on their basic retirement savings.

The current arrangement thus enables all CPF members to earn fair and risk-free returns on their retirement savings, while benefiting from the good performance of GIC and Temasek through the annual Budget. This is the right way to help Singaporeans save for their old age, and enjoy peace of mind in their golden years.

Jacqueline Poh (Ms)
Director (Special Duties)
Ministry of Finance

Shambhala Meditation Center of Chicago

Fix your posture
Align it with heaven and earth
You are a lightning rod between them
Relax everything
Let your past dissolve into the earth
Let your future dissolve into space
Let the present moment dissolve into your breath

And then,
Forget everything you just did
Stare directly into space and relax your mind
Whatever happens don’t be concerned
The absence of deliberate action is the real message
We make too big a deal of practice

Relax
If something occurs, fine
If nothing occurs, fine
The moment is empty

– Vajra Regent , Shambhala Meditation Center of Chicago

CIA Cryptonyms

After watching The Bourne Ultimatum‘s use of the code BLACKBRIAR on ECHELON, I looked up the following CIA cryptonyms.

Operations and Projects

APPLE
ARTICHOKE: Anti-interrogation project. Precursor to MKULTRA.
AQUATONE: Lockheed U-2 Spy Plane Project
BIRCH
BLUEBIRD: mind control program
CHALICE: Lockheed U-2 Spy Plane Project
CHATTER
CHERRY: Covert assassination / destabilization operation during Vietnam war, targeting Prince (later King) Norodom Sihanouk and the government of Cambodia. Disbanded.
CONDOR: 1970s CIA interference in Latin American governments, some allege in the coup and assassination of Salvador Allende in Chile
CORONA: Satellite photo system.
DBACHILLES: 1995 effort to support a military coup in Iraq. [1]
ECHELON: worldwide signals intelligence and analysis network run by the UKUSA Community.
FIR
GUSTO: Project to design a follow-on to the Lockheed U-2 Spy Plane
HTAUTOMAT: Photointerpretation center established for the Lockheed U-2 Spy Plane Project
HTLINGUAL: Mail interception operation.
IDIOM: Initial work by Convair on a follow-on to the Lockheed U-2 Spy Plane. Later moved into GUSTO.
IAFEATURE: Operation to support UNITA and FNLA during the Angolan civil war.
KEMPSTER: Project to reduce the radar cross section (RCS) of the inlets of the Lockheed A-12 Spy Plane
LEMON
LINCOLN: Ongoing operation involving Basque separatist group ETA
LPMEDLEY: Surveillance of telegraphic information exiting or entering the United States
MHCHAOS: Surveillance of antiwar activists during the Vietnam War
MKDELTA: Stockpiling of lethal biological and chemical agents, subsequently became MKNAOMI
MKNAOMI: Stockpiling of lethal biological and chemical agents, successor to MKDELTA
MKULTRA: Mind control research. MKULTRA means MK (code for scientific projects) and ULTRA (top classification reference, re: ULTRA code breaking in WWII. Renamed MKSEARCH in 1964
MKSEARCH: MKULTRA after 1964, mind control research
MKOFTEN: Testing effects of biological and chemical agents, part of MKSEARCH
OAK: Operation to assassinate suspected South Vietnamese collaborators during Vietnam war
OXCART: Lockheed A-12 Spy Plane Project
PAPERCLIP: US recruiting of German scientists after the Second World War
PHOENIX: Vietnam covert intelligence/assassination operation.
PINE
PBFORTUNE: CIA project to supply forces opposed to Guatemala’s President Arbenz with weapons, supplies, and funding; predecessor to PBSUCCESS.
PBHISTORY: Central Intelligence Agency project to gather and analyze documents from the Arbenz government in Guatemala that would incriminate Arbenz as a Communist.
PBSUCCESS: (Also PBS) Central Intelligence Agency covert operation to overthrow the Arbenz government in Guatemala.
RAINBOW: Project to reduce the radar cross section (RCS) of the Lockheed U-2 Spy Plane
SHERWOOD: CIA radio broadcast program in Nicaragua begun on May 1, 1954.
THERMOS: Unclassified codeword used in lieu of RAINBOW
TPAJAX: Joint US/UK operation to overthrow Mohammed Mossadeq, Prime Minister of Iran
TSS: Technical Services Staff
WASHTUB: Operation to plant Soviet arms in Nicaragua

Countries

AE: Soviet Union
AM: Cuba (1960s)
AV: Uruguay
BE: Poland
BI: Argentina
CK: Soviet Union
DI: Czechoslovakia
DM: Yugoslavia
DN: South Korea
DU: Peru
EC: Ecuador
ES: Guatemala
GT: Soviet Union
HA: Indonesia (1958)
IA: Angola
LI: Mexico
MH: Worldwide operation
MK: Projects sponsored by the CIA’s Technical Services Division (1950s/1960s)
OD: Other US Government Departments (1960s)
PB: Guatemala (1954)
SM: United Kingdom
TP: Iran (1953)
TU: South Vietnam
WI: Democratic Republic of the Congo (1960s)
ZR: Normally prefixes the cryptonym for an intelligence intercept program. E.g. ZR/RIFLE, for a Castro assassination plot which was buried. (1960s)

Ludwig Von Mises

“What counts is not the data, but the mind that deals with them…. Galileo was certainly not the first to observe the swinging motion of the chandelier in the cathedral at Pisa.”

“It is characteristic of very great persons to move forward to highest accomplishment out of an inner drive; others require an external impulse to overcome deep-rooted inertia and to develop their own selves.”

See also: Amid Financial Excess, a Revival of Austrian Economics

Being a Christian in the Working World

Being a Christian in the Working World
Kwek Mean Luck, Cambridge 1992-1995
Channel, Easter 2006

When I was in the CCCF, we had a number of post-graduates, who would share with us the difficulties of keeping the faith out in the working world. Imbibing from their experience, one of the things we consciously sought to do was to prepare ourselves for entering the workforce as Christians.

It has been many years since Cambridge, and the Lord continues to teach and to guide. These are some of the lessons I have learnt:

1. Cambridge is wonderful, but I must give other experiences a chance – When we came home, we missed Cambridge and the fellowship we had there terribly. For some, our experiences in Cambridge seemed like the peak of our Christian experience. We felt like we were now in the valley in the working world. It takes time, but we must move on. Clinging to what was wonderful does no good for the present. For those of you who have years in Cambridge still, continue to make the most of your years there, as I am sure you are, and store for yourself wonderful memories. When you leave, give the other experiences a chance.

2. I have graduated but I still need teachers and mentors – I learnt much from the many people around me, some of whom played particularly strong roles in my life as teachers and mentors of what it means to be a Christian in the working world. Some of them were not Christians, but they served as examples of how a Christian should be living. Some were Christians, who also gave me Christian perspective on different things and shared with me their experiences. Find teachers and mentors to guide you in different aspects of your walk with God.

3. Living out our faith – I recall a story told at a conference. A new and young pastor was asked a question about a passage in Romans on predestination during a sermon. He mulled through what answer he should give on a difficult and delicate subject and decided to reply along the following lines: ‘Well you know, there are four gospels before the book of Romans, read through them and put into practice what is said there. When you have done that, we will be ready to discuss the answer to your very pertinent question.’ To deepen our walk with God, at some point we need to move beyond knowledge and start living out our faith.

4. Small things count – There is a saying that talks about how we need to be careful of our thoughts, for they turn into actions, then into habits and then becomes part of our character. It is trite but true. A constant struggle for us is how we are to maintain integrity of our Christian beliefs and faith throughout all seven days of the week. It is easier whilst in church on the weekends, but what are we supposed to do as Christians during Mondays to Fridays when we are working? We each need to find the answer ourselves, but it helps to start with the small things: how we react to a piece of work, how we treat people who serve or work for us at work, how we relate to our bosses, how we react when under pressure or criticism. It is not easy to be a Christian in the workplace, but it is easier if we start by practising a few small things, and build from there. Small things count.

5. He will never let you fall – Most importantly, know that He will never let you fall. I have gone through valleys in my walk with Him. There were times when I felt I was in the desert. Yet, He is also the one who said that He will bring streams to the desert and I have seen Him do so. I used to wonder if I am any less a Christian today than I was in university, since I feel less palpable passion in my heart. Yet, I am heartened that over time, he has replaced that passion with a calmer and stronger fire that has withstood the blowing winds. I do not know about tomorrow, but I know He walks with me. So too will He with you.

Pay lawyers more to keep them: Chief Justice

By Pearl Forss, Channel NewsAsia | Posted: 18 August 2007 2259 hrs

SINGAPORE: More young lawyers are switching careers, citing long hours, unrewarding pay and stress as reasons.

This causes a shortage of lawyers, and as the economy booms and the demand for law services goes up, the problem is becoming more acute.

How to address this problem?

“Pay them well,” said Chief Justice Chan Sek Keong, in his address to law students at the inaugural Singapore Legal Forum on Saturday.

“Our young lawyers enjoy a degree of professional and social freedom and mobility which lawyers of my generation have never experienced. Perhaps the solution is in the old fashion but still fashionable way of using carrots without the stick since the latter doesn’t work. Pay them well. Greed works most of the time, even for the large majority of people in affluent societies,” he said.

In recent years, even the best-paying firms in Singapore are seeing their young lawyers jumping ship to Hong Kong, where salaries for junior lawyers start at about S$11,650 a month.

In contrast, the big firms in Singapore pay junior lawyers just over $4,000.

A second law school has been established at the Singapore Management University.

Also, the NUS Law Faculty has increased its intake and firms are now allowed to hire foreign lawyers.

But the shortage has not eased yet.

Another issue of concern addressed at the Legal Forum is how to make the law more accessible to the public.

Laws may be available online but the language in which it is written makes it difficult for the layman to understand it.

So the Chief Justice said that he would ask the Law Academy’s publishing committee to study the feasibility of publishing simplified law books.

While access to the law is important, access to justice is even more so.

This need will be provided by lawyers who do pro bono work, that is providing service free of charge.

But such services are currently confined to Community Court cases, and this year, more convicted offenders are appearing in High Court appeals without lawyers.

In his speech, the Chief Justice also addressed the issue of restoring confidence in the law profession, particularly after the high-profile case of lawyer David Rasif who fled with more than $12 million in clients’ monies.

“We must be more discerning about what we read in the media. The facts do not suggest any loss of confidence in the legal profession,” said the Chief Justice.

“On the contrary, our large and medium law firms are generally held in high regard in Singapore and in the region. All the ethical and professional lapses that I have come across in my 40 years in the law have emanated from small law firms. It’s very unfortunate,” he added.

Although only a small minority of lawyers in these firms have committed breach of trust, the Chief Justice stressed that all law students must be taught the importance of ethical values.

The forum was organised by the UK Singapore Law Students Society. – CNA/ir