EastStop

The Swedish Vs Asian management styles

2009-01-25T11:36:00.000-08:00

This local Swedish article describes how the Swedes manage and lead in their organizations. As mentioned in the article, the Swedish management style is characterized by easy communication, low internal competition and anti-hierarchical organization structures.

Having been spending the last couple of months providing consulting work in a Swedish financial institution, the article pretty much sums up my experiences here. I am not exactly sure if I find their management style appealing. Having spend the earlier part of my life in Singapore, the experience here with the Swedes has been a totally new learning experience.
For one, decisions take ages to be made up, as it is management by consensus, not by pragmatism.
A decision which usually takes the Asian/Singaporean management a week to make would typically take two months for the Swedish management to do the same. In a Swedish organization, all related parties are consulted and if there are disagreements, decisions are postponed to a later date so that both parties can revert with even more information to justify their cases. There is no "ultimate" decision-maker who will preside over the issue, everyone involved is entitled to his/her views and unless everyone is satisfied, the issue will remain unresolved.
The article is also accurate in pointing out that the Swedes usually do plan ahead and try to anticipate all possible scenarios. But then again, there is only so much one can plan, there are some unknown unknowns which will only be made known when as the plan is being implemented.
Low internal competition also meant that there is little incentive for anyone to do better or aim higher than their peers, though on the brighter side, there is less politicking in the office. Personally, I think that part of the reason why internal competition is low is due to the fact that there is little monetary incentive to perform better than your peers.
Compensation in the front offices in financial institutions are typically calculated based upon profit numbers and very heavily performance calibrated. However, for this financial institution, compensation is primarily calibrated on hierarchy or seniority, little incentive for good performance.
I guess this management style is a exemplification of the Swedish society as a whole which places heavy emphasis on social equity.

The Singaporean Worker (vs the French)

2009-01-23T07:00:00.000-08:00

Having had the chance to work in a French bank for 5 months alongside the notoriously fun and leisure loving French, it is perhaps only natural that I put forth some observations here.

The French (excluding those snobbish types living in Paris) have a wicked sense of humor - sometimes judged a tad crude or sexual. But one thing is for sure, once they are comfortable with you, they can be ridiculously funny, made even funnier when they try their jokes in English. They are best mixed with a relaxed attitude towards work, and a take-it-easy spirit. Oh yes, and they will try their utmost to include you in their discussions by speaking in English and if they ever break into their native French, they apologise for it. This is truely something I can take back with me.

The generous welfare benefits for the French employee are another stark contrast to what we have in Singapore. A typical employee in a financial institution gets up to 45+10 (compulsory+voluntary) days of annual leave to compensate them for working longer that the stipulated 35 hours a week. The 9+3 months of paid maternity+paternity leave is another feature of the generous welfare given to the French. Not forgetting also the free healthcare and education right up to university levels. The costs of this all? A rather breath-taking tax rate of as high as 45%, not including the various fees, muncipal taxes, etc. And a shrinking (in deficit currently) social benefits pool which could basically mean that current generation may not get to enjoy the full pensions promised to them in retirement. So you gain some, you lose some.

Whilst talking to a group of them over lunch once, I asked what they thought of their equivalent in Singapore. What's said was not surprising at all - their Singaporean counterpart works really hard and long hours and has twice their workload. And I believe, more than likely not paid any more than they are. [There are 1.5 Singaporeans in the team supporting Asia and sometimes NY, compared to 4 French in the team. The Singaporeans who get off work at 10pm SG time will be heartbroken to know that the French office is almost empty by 6pm FR time]

So how do we explain this? Paying a premium for a group of workers who seemingly have less work over another? Perhaps the French are indeed more productive? Perhaps it is a lifestyle thing? Or perhaps it is due to the fact that it is a French bank?

There's an ideal amongst the French and it is that they believe everyone should be entitled to a certain quality and standard of living which from my vantage is quite high (you got to forgive a Singaporean who grew up in a three-room HDB flat and living in the heartlands). So to them, life and time outside work is extremely important and they will not spend more time than what they are paid.

I guess for Singaporeans, like one senior minister once remarked, working hard is something we cannot shake off...

When the underlying assumptions are wrong ...

2009-01-21T03:24:00.000-08:00

I read with interest the news from Credit Suisse Group which estimated that 200,000 foreigners will be leaving Singapore.
What are the implications of if such a scenerio happens?
I think of the property developers and the funds which are invested in the property market - this mass exodus of expats will be equivalent of a 'black swan' event. These expats, on average, earns more than most Singaporeans and have a much higher spending power. With their departure, the property market will be missing a critical source of investors.

Touted as Singapore's first hedge fund to venture into property management, this is gonna one helluva ride for their investors if the mass exodus of foreigners happens. Not to mention that this fund has also bought 100 units of a residential development along River Valley, expecting to rent out these apartments when the development is completed in the first quarter of this year. I wonder how many units can be rented out now ...

When Hedges dont work ..

2009-01-17T17:15:00.001-08:00

In a trading environment, traders typically hedge their exposure to minimize their exposure to price risk in the event markets turn against them.
The most efficient of all hedges is to have a back-to-back trade (meaning that the trader buys an asset and then sells the off the same asset at a profit) - effectively here, they would have earned a margin without any exposure to any underlying.

For Merrill Lynch, which just reported their 2nd Quarter 2008 results, their results is simply painful to watch. Merrill Lynch is sitting on a pile of Asset-Backed Securities CDOs (hedged position) which they hedged using CDS (Credit default swaps) (hedging instrument). Now, this is not the most effective hedge but it should still offset losses under normal trading environment.
Theoretically, if their CDOs tank, their hedges would make money.
But, as we are now living in unprecedented times, even their hedges lost money, exacerbating the overall losses. This makes for really painful reading. The reason that is that there is a severe deterioration of the creditworthiness of the financial guarantors of their CDS positions, which essentially wipes out all gains made on the position. What this basically means that the counterparty which the CDS were traded against is in a less financially stable position and that there is a higher risk that the trade may not be settled.
Ouch ...

Good Bank, Bad Bank

2009-01-16T09:07:00.000-08:00

"With lower risk and a streamlined set of businesses, we expect Citicorp to be our high-return, high-growth business over time. It will include "core" Citi and be a relationship-focused global bank to businesses and consumers.

Citi Holdings includes a great set of businesses with strong market positions. However, these assets do not sufficiently enhance the capabilities of Citi's core businesses. The leadership of Citi Holdings will focus on running these businesses well, tightly managing risks and maximizing the value of these assets by being alert to appropriate divestiture and partnership opportunities that may emerge." - Vikram Pandit

I wonder who's going to be leading the bad bank?? Nobody would want to be in-charge of this body-bag of toxic waste. First priority for this set of leadership is to find means to offload the toxic waste.

Here's a toast to a new financial landscape. Good bank = pure retail + commercial business. Banks will soon become like a utility company, just like your telecoms or water provider.

What do you do ...

2009-01-11T00:30:00.000-08:00

Problem:
When the heating/boiler in your little Paris studio apartment is not working?
The temperature outside is minus 7 degrees and your apartment is not well-insulated?
The apartment caretaker speaks only French and is away for the weekend?
Your French sucks?

Solution:
Boil lots of water to drink.
Put on layers of clothes to sleep.
Pray that the boiler comes back on soon ....

I wonder if this is due to the Russia-Ukraine gas dispute?

Is Singapore the new London?

2009-01-06T23:59:00.000-08:00

With deflationary pressures in full swing in the UK, it is not difficult to find a pint of beer for less than a pound (approx 2.10 SGD), lunch for a quid and endless clearance sales across all respectable retail chains like John Lewis, House of Fraser, Selfridges, and the list goes on ...
Now, compare this to the article in asiaone: 'Tourists find Singapore pricey' Either Singapore has yet to feel the full brunt of the deflectionary effects or that our economy is just plain resiliant. I doubt it is the latter.

Housing rents and prices have fallen off the cliff as well, especially those apartments near Canary Wharf. With the financial services industry in the doldrums, financial professionals are fleeing the Wharf - here supply outstrips demand. A 2 bedroom flat in Canary wharf, overlooking the River Thames cost about 360 pounds a week (about 3000 SGD a month). Now compare that to a two bed apartment in the Sail@Marina which costs about 5000 SGD a month upwards.

So, is London more expensive or is Singapore the new London?

I got a earful from property owners when trying to negotiate rent when I was back in Singapore last month...hopefully the market will now manage their expectations and they will be willing to accept a lower rent when I return ..

The Aftermath of Financial Crises

2009-01-03T23:06:00.000-08:00

So what happens after a financial crisis. To have a preview of the aftermath, it is necessary to look back into the past. Professors Carmen Reinhart of the University of Maryland and Kenneth Rogoff of Harvard, in a recent paper entitled “The Aftermath of Financial Crises”, investigated the end-game across various countries.

Some notable points brought up in the paper:

First, asset market collapses are deep and prolonged. Real housing price declines average 35 percent stretched out over six years, while equity price collapses average 55 percent over a downturn of about three and a half years.
Second, the aftermath of banking crises is associated with profound declines in output and employment. The unemployment rate rises an average of 7 percentage points over the down phase of the cycle, which lasts on average over four years. Output falls (from peak to trough) an average of over 9 percent, although the duration of the downturn, averaging roughly two years, is considerably shorter than for unemployment.
Third, the real value of government debt tends to explode, rising an average of 86 percent in the major post–World War II episodes.

It is also interesting to note in that when it comes to banking crises, the emerging markets, particularly those in Asia, seem to do better in terms of unemployment than do the advanced economies. This is mainly attributed to wage flexibility and lack of social safety nets in emerging economies which make the unemployed more anxious to get back to the work force.
In addition, the declines in real GDP are much higher in emerging markets than advanced economies, due to the abrupt exodus of foreign credit.

The paper presented is rather short and relatively easy to understand - highly recommended for all.

Bottom in Singapore Housing still Far Off

2009-01-01T05:11:00.000-08:00

The modus operandi of a slowdown as evident in the US and UK is as follows:

Equity Markets Collapse - Real Economy Slowdown (evident in drop in corporate profits) - Spike in Unemployment - Drop in Real Estate prices.

In Singapore, I think we are still in the second phase (real economy slowdown). The next shoe to drop is the employment rate. The Singapore government is pulling out all stops to prevent the unemployment rate from increasing. It remains to be seen if the measures work. Expect to see Singapore's unemployment rate to at least match that in the 2002 - 2004 slowdown.

The adjustments to real estate prices will follow but these adjustments will take time to work through. Real estate prices are usually 'sticky' primarily due to the fact that price discovery is usually delayed and information is not as readily available as exhibited in the equity markets. In addition, expectations of market participants in the real estate market are managed by estate agents who has every incentive to push prices up. Globally investors now have a slew of properties to chose from - London and New York property prices have dropped significantly (approx > 40% at SGD prices) - can Singapore still attract these investors?

A new life awaits

2009-01-01T00:00:00.000-08:00

A new life awaits, and I cannot wait to embrace life with all of me.

Singapore will be one of 10 slowest growing economy in 2009

2008-12-31T07:36:00.000-08:00

According to the Economist Intelligence Unit, Singapore will see it's economy shrink by 2% next year, making it one of the top 10 slowest growing economy in 2009.
Much of it, I believe is due to our reliance on exports to the US and Europe which will be facing even greater recessionary pressures next year.

Singapore and Iceland - why Singapore's USD 400bn war chest makes all the difference

2008-11-12T04:01:00.000-08:00

Iceland's banking problems started surfacing as early as January this year and the Central bank of Iceland had commissioned a report in April this year to investigate the policy options available. This report remained out of public domain but since the spectacular collapse of the island banking model in October, it is now no longer deemed 'confidential'.

Having read the report I cannot help draw comparisions to Singapore:
1/ A small country with its own currency
2/ Internationally active and exposed financial sector larger than its GDP (Singapore banks have combined liabilities of approx 300 USD bn compared to our GDP of approx USD 150bn)

In Iceland case, even when their banks are fundamentally solvent (in the sense that its assets, if held to maturity, would be sufficient to cover its obligations), such a small country - small currency configuration makes it highly unlikely that the central bank can act as an effective foreign currency lender of last resort/market maker of last resort.

In Singapore's case, our USD 400 bn warchest effectively acts as a backstop in the event the state takes over the banks, to replace bank debt with soverign debt. (This is indeed the nuclear option; otherwise, we will have to borrow from the IMF or World Bank.)

Viewed in another perspective, the constraint for any of our local banks to grow regionally or internationally is that the size of our warchest have to be increased in proportion to the size of the banks' liabilities.

Equity destructors ...

2008-11-05T21:54:00.000-08:00

Another financial structured product(Equity Accumulators) rears its ugly side for Asian investors.
Lesson to take away - nothing is for free...

Obama is the 44th President of the USA

2008-11-04T23:06:00.000-08:00

Obama's message of change had won over the hearts of the Americans. As previously posted in this blog, Americans have shown that change in the current administration is needed. Let's hope Obama and the American people can deliver the change he has promised.

A Recession with Inflationary + Deflationary pressures is heading our way

2008-11-03T14:31:00.001-08:00

From my little studio flat in Rue de Longchamp, Paris, as I take stock of the financial markets and what is to come:
The de-leveraging of excessive debt and credit in the financial markets is far from over.
Faced with a likelihood of recession, central banks around the world are cutting interest rates aggressively, very likely to spark inflationary pressures for raw materials.
Assets like properties, equities will suffer severe deflation of prices as consumers and corporates shore up battered balance sheets and try to recapitalize.
A new world awaits.

There is something wrong with the bailout

2008-10-14T14:30:00.000-07:00

Image courtesy of NYT

I am having trouble reconciling the numbers here:

Goldman Sachs 2007 bonus pool: 18.8bn USD

Warren Buffet to invest 5bn USD in Goldman Sachs with option to invest another 5bn USD more, apparently to give the company a 'vote of confidence'.

Goldman Sachs to receive part of 250bn USD capital injections from the US government.

I wonder what GS bonus pool for 2008 would be? Why didn't these GS folks save more for a rainy day - these guys were supposed to have foreseen the subprime meltdown!

Winners' Curse

2008-09-29T13:15:00.000-07:00

When the trio of RBS, Fortis and Santander won the US70 billion breakup of ABN Amro last year (during a period where almost every bank was getting pissed drunk on leverage), few would have envisioned the state they have ended up in now.

RBS suffered an almost 65% drop in its share price since the announcement of their take over of ABN investment banking services, on fears that the bank would have to find it increasingly difficult to boost its capital reserve ratio.

Fortis, a European banking and insurance giant had to be bailed out by the governments of the Netherlands, Belgium and Luxembourg. And worst still, as part of the plan, Fortis would have to sell off their stake in ABN Amro, most likely at a third of the price they had originally paid.

Only Santander remained in the clear, having sold part of their stake in ABN at a profit of USD 1 billion and keeping the South American operations. Currently, they are buying up assets on the cheap in UK - Abbey, A&L and B&B.

Indeed, a victorious bid in an auction may be great for the ego, but winners beware, the curse can be deadly.

Were MiniBonds/DBS Notes 'Safe' ?

2008-09-25T03:45:00.001-07:00

Pictured above is DBS credit ratings.

I am trying to put myself into the shoes of the Bank's relationship managers who sold the MiniBonds or the DBS Notes. What would I have said back in 2007 given the market conditions?

Back in 2007, Lehman's Long term credit rating by Fitch is AA- (DBS is now AA-). So the rating agencies are assigning an equal probability of default to DBS and Lehman back in 2007. To put it simply, placing a fixed deposit with DBS would be just as risky as selling protection on Lehman (if we discount the Deposit Insurance Act in Singapore).

So what does an AA- rating by Fitch mean? On their website, it says:
Very high credit quality. 'AA' ratings denote expectations of very low credit risk. They indicate very strong capacity for payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events.

So to a lay person (no access to credit market data), given the information available in 2007, it is not impossible for one to judge that Lehman was indeed a 'safe' counterparty and the risk undertaken then was miniscle.

The turn of events over the last month was truely astounding. To this date, Lehman's credit rating by S&P is still A, four notches above junk status.

Retail Investors - More handholding needed?

2008-09-24T13:44:00.000-07:00

The current debacle concerning retail investors due to the Lehman's bankruptcy brings to my mind a conversation I overhead in August last year.
Was on the trading floor of a Scandinavian bank back in August 2007 when the credit crisis first reared it's ugly head. Global equities suffered a 15% drop, credit markets froze, the bank's corporate clients started getting jittery and began calling in, presumably taken a larger than expected hit.

Head Trader: What are we gonna do with this xxx (client's name). They have been calling us non-stop.
Chief Trader: What do they expect us to do? Hand hold 'em? They are big boys and markets can go down. They should know the risks they are taking.

Do retail investors need hand-holding or in some cases, a bailout by citing ignorance? Are retail investors really that gullible? If someone gives more money for deposits, shouldn't one ask where the 'catch' is? If something is too good to be true, shouldn't one ask why it is so?

There will always be risks involved when dealing with money. Bonds issued by the Singapore government is good only if the government does not go bankrupt. Fixed deposits placed with a bank is only as good as long as the bank does not go bankrupt. There is always a probability that things will not go the way we expect, which is why we have to be prepared for the worst scenario.

Lehman Bankruptcy - Scenes from IT Ops

2008-09-15T11:50:00.000-07:00

I was onsite at a bank today and the IT Operations was slightly more busy than usual due to the demise of Lehman. So what happens when a bank's counterparty fails? Heres' a brief insight from the IT perspective:

a. They stop all payments sent out to Lehman - via their payment systems, SWIFT, CLS, etc.
b. They start filtering out Lehman trades in their P&L reports or meddle with the reports to reflect restructuring fees

There was relatively calm across the department as they appeared ready for this eventuality and were reporting back to work day before yesterday. Not exactly sure what's happening in their trading desks or the risk departments, must be quite a scene ;-)

Temasek - A closed-end sovereign wealth fund?

2008-08-26T09:33:00.000-07:00

Was just reading Temasek Holdings annual report for year ending March 2008. A couple of notable insights into the workings of this investment vehicle whose sole shareholder is the MOF (Ministry of Finance):

a. It's becoming harder and harder to make money - first time in five years where Temasek had a negative wealth added figure (Wealth added is a benchmark which measures the return against cost of capital) Bearing in mind that as the portfolio value increases, the absolute cost of capital increases as well, so Temasek has to make even more money in order to beat this benchmark.

b. Divestment out of 'emerging' Asia into 'stable' Europe. Guess the Asian economies are looking a tad forthy?

c. MOF does not inject capital regularly but instead on an ad-hoc basis. I wonder if Temasek allows any withdrawal of funds by MOF? From the report, it seems that MOF has never drawn-down any funds from Temasek so it could imply that the capital injections by MOF are excess funds after paying down CPF, pensions, dividends?

d. Would Temasek be better off paying a bigger dividend (to Singaporeans) if there are no worth-while investments, rather than chasing investments which on hindsight look a bit too expensive at the current climate?

The investment report is definitely worth a read - especially if you want some insight on Temasek's investment strategies, based upon value investing principles.

Reykjavik, Iceland - My First Marathon

2008-08-25T08:45:00.000-07:00

Yeap that's me across the finishing line. Thanks darling!

31 years, 8 months later, I finally fulfilled my dream of finishing a marathon. Braving the notoriously wet and windy weather in August in Reykjavik, Iceland, I trudged wearily across the finishing line, with a time of 4hrs 38mins.

This accomplishment is dedicated to my loving wife, a logistic supremo navigating the course effortlessly to provide much needed replenishment both for the mind and my body.
Darling, you were never far from me in this 26mile journey.

And not forgetting my family in Singapore, where in my darkest moments, the thoughts of you all carried me further than I could imagine.

The RMT workers go on strike

2008-08-19T00:57:00.000-07:00

On days like this, I wish I was travelling with them.
Let's hope the eurostar is not affected, else I will have to swim back to London...

Olympics Medals Count - A matter of perspective

2008-08-18T23:06:00.001-07:00

From the BBC:From the NY times:

Terminal 5 is working

2008-08-18T06:06:00.000-07:00

Gallant efforts by British Airways to dispel the negativity surrounding Terminal 5. Interesting to note that this effort is piloted by BA and not BAA Heathrow.

The Great Britain Sale - Every Pound has to go!!

2008-08-14T12:09:00.001-07:00

Over the last couple of days, the sterling pound dropped like a sinking anchor due to some really negative remarks by the Bank of England in the latest inflation report. The UK's GDP main contributors are financial services and construction, both are in a deep funk right now and is looking to get even worse. With the weakening pound, imports will get even more expensive, exacerbating the rate of inflation.
When wife and I came over, the GBPSGD exchange rate was 3.10 - Now, it has dropped over 20% to 2.63. Ouch!

Room for improvement - Straits Times Interactive

2008-08-13T08:55:00.000-07:00

Have been taking advantage of the two week free passes to the Singapore Straits Times online website to do some reading up. Unfortunately the whole experience was quite a let-down.

Having been fed high quality content websites like the NY times or the bbc online, I found it difficult to appreciate the online version of the Straits Times.

Some comments about the Straits Times online edition:

a. I cannot fathom why they wanted a print version of the SS. Hardly anyone would want to zoom in/zoom out of a 15inch computer screen to see a print version normally printed in broadsheet size. I found the whole experience tedious and was put-off by all the print-ads. My guess is that this is more likely for advertisers - SPH is using this as another avenue to entice potential advertisers.

b. Un-customisable front page. Start working on allowing users to customise what they want to see on the front page! Well, at the very least, allow a change of colours?!!!

c. Content, Content, Content. Organising the available content into a user-friendly user-platable online platform requires much thought and design. Here the online SS fails miserably - both in terms of the quality and the delivery. Quality-wise, well we can acknowledge that our writers appeal only to a relatively small market so it is acceptable. But delivery-wise, surely we can take a leaf out of the other websites? Why can't they embed streaming video together with the news article instead of directing me to another website?

d. Integration, Integration, Integration. The online SS content is distributed across various 'hip' sounding platforms like RazorTV, Stomp, Urban, DigitalLife, etc. To me at least, it is all very confusing. I want to read articles relating to lifestyle and I find content distributed across RazorTV, Stomp and Urban. They should be integrated into a single access point for the online user.

A poor effort indeed. Try harder Straits Times. Take a leaf out from BBC and NY Times.

Temasek has learnt its lesson well

2008-07-30T04:47:00.000-07:00

Diving into the details of the latest Merrill Lynch cash call, it is definitely a 'sweet' deal for Temasek. Temasek has learnt its lesson well since their Barclays intervention.
However, couple of things to note:
a. The 'reset' clause will no longer allow going forward; ie if there are further cash calls, Temasek will no longer be able to exercise the right to purchase more stocks at the new issued price
b. There may be more cash calls for ML going forward, looking at their current risky debt holdings

Hopefully, this will buy more time for ML to unload their risky debt at a better price.

Singapore bum investment decisions

2008-07-28T06:37:00.000-07:00

Here's a not-so-flattering take by the ft on the investment decisions undertaken by some of the Singapore companies.
Ouch...

The competition gets even more intense

2008-07-22T05:07:00.000-07:00

With the credit crunch in full swing, many US and UK based finance professionals are heading to Singapore's shores.
This mass exodus of 'talented' foreigners into sunny Singapore to escape or as a result of the mass culling in New York and London looks set to continue at least for the next few months.
With this exponential arrival of skilled migrants, there will be new opportunites to be uncovered but yet stiffer competition to be faced.
Local Singaporeans will once again, as usual, have to prove their worth in this rising tide of skilled foreign talents. Hopefully, the quality of our people will be enhanced through even tougher competition.

Capitalism and Greed

2008-07-12T15:08:00.000-07:00

It is immensely exciting to witness the near capitulation of Fannie and Freddie for it bears the following implication:

a. The US brand of capitalism is not insulated from disaster - the US will no longer be able to stand on a economic ethos high ground and preach the 'goodness' of their brand of capitalism

b. Much of the failings can be attributed to greed and human nature. The US financial systems have their internal checks and balances, but human greed cannot be easily checked nor balanced. How can we prevent financial institutions from leveraging to the tills, when everyone is doing the same?

The current de-leveraging process will take years to unwind, and the excesses built up over the last decade will take as much, if not more time to work off.

Expect the worst and hope for the best.

Did Temasek make a mistake?

2008-06-25T08:11:00.000-07:00

It is interesting to note that in the latest cash call by Barclays, Temasek only contributed a measly 200 million pounds. I think This has more to do with a diluation issue than having a real interest in buying the share at a 9% discount to the stock price as of Tuesday.
So, if we apply Buffet's definition of a good stock (of buying more when the price drops), then indeed Temasek's action may have the following implications:
a. That they may have paid too much last summer
b. That there may be more write-downs for Barclays and a further cash call

Ouch!

Conversations with a Taxi Driver Part 1

2008-05-28T15:07:00.001-07:00

On my many overseas trips, the journey from the airport to the city/hotel usually provides a fertile opportunity to strike up a conversation with the taxi driver.
These conversations provide a great insight into the people and the country - it is amazing just how people open up when 'boxed' up in a vehicle.

Description of Journey: From OR Tambo International to Jo'berg CBD (South Africa)
Journey Time: 40mins
Cost of journey: 350 Rand (approx 65 SGD)
Date: Sometime in mid May when the xenophobia violence broke out in Johannesburg townships
Taxi driver: 'Prince' - we called him the 'Fresh Prince of Joberg'
Background: Prince is a native South African and speaks English pretty well albeit with a strong Africana accent. Taxis in Johannesburg are usually unmarked and run privately, so it is important to find a driver whom one can trust, especially if it is the first trip there. Due to this reason, people like Prince are doing a roaring trade chauffeuring foreigners around.
Prince owns four Mercedes Benz, including a Mercedes 4x4 and a 300 series. Probed further, he revealed that Mercedes evokes the imagery of a dependable, reliable and classy ride. Beemers are a 'no-no', since they are usually targets for carjackers.
There is no available public transport to bring travellers from the airport to the city - the only option is via the taxis or minibuses. The airport is currently undergoing massive renovations in preparation for the World Cup 2010.
Interesting observations: En-route to the city, we came across several Nike ads which depicts athletes in various pledges of using their bodies as a 'weapon' to 'fight' the odds. This was how Nike South Africa defined their campaign: Every day is a struggle in South Africa, albeit a struggle for respect and dignity, or a fight for food or against crime, Nike feels it has a powerful message to share – that through sport, anyone can overcome anything."
Goes to show how violence is so ingrained in the South Afican psyhic/culture.
Conversations: Inquired about the xenophobic violence in the townships. Prince was particularly against foreigners from other parts of Africa who are taking away their jobs. Sounds familiar to what's happening back home in Singapore, I added. Folks back home in Singer are complaining about highly-skilled jobs taken over by foreign talents. Adding to the pain, even lower-skilled jobs are becoming scarce, due to influx of cheaper labour from parts of Asia.
Here, immigrants from Zimbabwe, Somalia having attracted by South Africa's brighter lights and better opportunites have poured into the country since the past decade. The outbreak of violence was the culmination of anger and frustration at the loss of jobs to immigrants, fuelled by the rising cost of living which have escalated at least threefold since the beginning of the year.
Funny Incident: Not just our designated driver, Prince has many other clients to attend to. So, on one occasion, he was not available and sent a 'stand-in' driver to pick us up. Our stand-in driver turned out to be a scholar and have little or no experience driving in Jo'berg. The car stalled twice as he tried to start the car in 2nd gear and we ended up 'cruising' in Jo'berg at a lesiurely 40km/h.

Loss of jobs to foreigners seems to be the common grouse these days, but this seems inevitable as the world gets progessively flatter. Especially for a open and small nation like Singapore without any natural resources, the effect will be even more pronounced for native Singaporeans when our government strive to attract the best into our city.

London Votes!

2008-04-30T01:50:00.000-07:00

It's funny how wife and I never had the opportunity to vote in Singapore but are now presented with a chance to do so tomorrow.
The face-off is between Ken Livingstone, the Labour incumbent versus the Conservative Party (read opposition) candidate Boris Johnson. We had polling cards, a leaflet explaining the policies which each candidate is proposing and what each of them stands for, sent to our flat.
The incumbent is riding on his past credentials and the fact that he had presided through the 'golden years' of the revival of London as a global financial center, a consequence of the policies his party has implemented. However, there is always a tradeoff for achieving such goals. Public transport is expensive, population growth has seen an exponential spike due to the attractiveness of working in London and the rising cost of living.
The voting will take place on the 1st May, which is not a public holiday unlike the rest of the world.
I can't help recalling my younger days in Singapore where my parents were voting ...

Olympic's Shame

2008-04-14T03:37:00.001-07:00

Wife and I were at Leicester Square, London on the 6th April to witness the Olympics touch relay.
The day started with a huge snowfall, pretty unexpected as this was 'supposed' to be Spring. The decision to go to Leicester Square was made due to the desire for a 'warm bowl of noodle soup' rather than for the Olympics touch. We were unaware of the huge fiasco surrounding the touch relay beforehand. It was only after lunch did we realised that protesters were trying all kinds of ways to extinguish and put out the Olympics flame.
The atmosphere at Leicester was supportive and we could hear shouts of 'Long live Beijing', 'Long live Olympics'. For a while, I felt proud to be a Chinese and felt no different from the Chinese supporters beside us from HongKong or China.

The Olympics flame, when it arrived, was heavily guarded with at least three rings of guards surrounding the touch bearer. It was hard to see the torch bearer or the flame - on hindsight, it was not difficult to see why there was so much security.

In retrospect, the protestors do have the freedom to voice their displeasure about their views on China's policy on Tibet and human rights but I question the method through which they raise their protests. It was heart-wrenching to see protestors trying to snatch or extinguish the Olympics flame - I am not sure what they are trying to achieve in carrying out those acts. Perhaps a more meaning action such as running alongside the relay team with their flags would bring across a stronger message which will gather more supporters to their cause.

This is a huge PR lesson for China indeed, it is not lost on me that translation between the Chinese language to English may not be perfect and subtle meanings may not have been conveyed by the English media. In addition, China's hardline approach towards the protestors is likely to fuel more anger and anguish. Perhaps a more reconcilatory tone from China may be the better way forward.

The cost of the appreciating SGD

2008-03-28T03:46:00.000-07:00

The SG dollar has strengthen against every other reserve currency since the start of 2004.

There was a report by the New York Federal Reserve in 2004 which quantified that for every 10 percent appreciation of the Singapore dollar against the U.S. dollar and other reserve currencies would result in a domestic currency capital loss of more than 10 percent of GDP.

Looking at the charts above, since the start of 2004, the SGD has appreciated more than 15% against the USD, more than 10% against JPY and GBP and remained unchanged against the EUR.

Given Singapore's GDP of about 140 bn SGD in 2006, these currency fluctuations would mean a loss of about 14bn SGD ... wow ... which may explain GIC's and Temasek's interest in the US banks - better to hold their stocks than to hold the USD.

The Importance of being fiscally prudent

2008-03-27T11:11:00.000-07:00

Looking at the crumbling asset prices in the US and around most parts of the world, it inevitably reinforces the virtue of being financially prudent, rather than financially savvy.
The past 5 years have seen unprecedented creation of credit and the world economy was awash with 'cheap' money. As a consequence, property prices have also risen to unprecedented levels and there was a time when investors were 'educated' on the benefits of investing in properties - the huge potential financial gains that could be made simply by placing a 5% downpayment on any property developments. Every 1% upside in the property valuation would result in a gain which is 20 times multiplication of the investor's initial outlay. Such is the lure of leverage.
However, the reverse of the situation is also true. A 1% decline would also imply a loss 20 times the initial outlay.

The sticklyness of property prices - marked by sellers' reluctance to sell in a weak market and aided by cheap refinancing options means that the current downturn would take more than just a couple of months to clear. In the meantime, there will be many false dawns but until the speculative element in housing prices is replaced by realistic pricing, it is still wiser to remain at the sidelines and hang on to pure cold hard cash.

Prepare for more pain ahead

2008-02-29T10:15:00.000-08:00

It is estimated here that total losses from the credit crisis will reach 400bn USD. The tally so far is about 160bn, so there is still more pain to come.

Recent reports were debating about the seemingly wide mismatch between the gloom in the credit markets and the sunny outlook in the equities universe. There is a bit of a spillover delay effect at work there and I guess today, with the Dow falling almost 200points, the markets are gradually converging.

There is definitely a slow down heading our way - tighten your seat belts and enjoy the ride!!

They don't seem to like our Money very much

2008-02-22T01:07:00.001-08:00

After spending almost 30bn USD to bail out financial institutions in the US, the Singapore sovereign funds still do not have much support from the US public.
In the survey done by Public Strategies Inc, the American public favours the Australias and the Norwegian sovereign funds but have strong negative sentiments for the funds from Asia and the Middle East.
Transparency and timely disclosure of the funds allocation may most likely be a reason for the Americans perception. I guess having good public relations with the international media help as well.

The star of a bank's back office

2008-02-11T13:30:00.000-08:00

In almost all operations and back office teams in financial institutions, these departments are considered primarily as cost centers and play a supporting role to the front office traders, the rock stars or money makers for the banks.

Having spent six years in the company supporting clients in the back office domain of processing and financial control, I have seen my share of gross wage and hours worked disparity between the rock stars and the backroom operators. This was the rule of the jungle - the traders rake in the big bucks with an army of support staff at their disposal, to ensure that the trades have been confirmed, the payments settled, their P&L verified.

In a dramatic turn of events, Jerome Kerviel decided that he had enough of the jungle rules and wanted to prove that he was also able to rack in huge profits despite his humble beginnings in the back office. He busted a 3.6bn pd hole in SocGen's balance sheet with his 50bn pd positions on European equity futures.

How he managed to deceive his managers and the risk departments will be thoroughly analysed, I can bet that his fraud will be pored over with just the same intensity as his banks' famous quants poring over their 5-factor pricing models.

In many ways, the back office is the last bastion of control for any banks. Any mismatched confirmations, unfixed trades or unsettled payments should have raised alarm bells. But as the rule of the jungle goes, the back office operators are too insignificant in the whole food chain - traders usually have the right of way and can easily brush off any mismatches with scant excuses or simply just by throwing a fit. It is perhaps the time now that the balance of power starts shifting more towards the back office.

Running in near zero degrees Stockholm

2008-02-05T11:08:00.000-08:00

When the company puts me up in a hotel without a gym during overseas missions, there is only one available option to get a good workout - get out for a jog. It's good for the body and a great way to get to know the city. Well, things are slightly different at this time of the year - any runs outdoors have to be carried out at near freezing temperature.
So I did all the preparatory touch ups - lip balm smeared all over my lips, two layers of gloves, a dry-fit skull cap, long running tights and drapping a windbreaker over my dry-fit singlet. Short of doing shuttle-runs in my hotel room, I felt prepared and ready to face the chill wintery night of Stockholm, Sweden. The temperature check was 1 degrees with a cool 4mph southeasternly wind. A short text message sent to my lovely wife to let her know that her hubby is undertaking something new, and for her to share in my excitement. I think on hindsight the text message for my sweetie was more of a safeguard - in case I did not make it back :-)
40 mins and a bucket-full of tears and phelm later, I made it back to the hotel. I did not exactly go according to the planned route, but I guess I met the objective - which was to make my way to the client's place.
Mission accomplished. I am really to tuck into some swedish meatballs.

A ratatouille car

2008-02-05T11:00:00.000-08:00

Spotted this car along Rue de Longchamp, Paris.

Revision to the Mean

2008-01-22T00:30:00.000-08:00

The global stock market has gone into a free-fall. Some notable statistics:

The Nikkei has fallen 35% over the last 6 months
The Sensex had a one-day plunge of 12% today
Temask's 2bn pounds investment in Barclays is halved, if marked to yesterday's market price
150 bn pounds was wiped out from the FTSE100 yesterday

This bloodletting in the equity markets was a delayed reaction from the wipeout in the credit markets a couple of months back. Some correlation or contagion effects I suppose. A couple of myths were dispelled here:

The decouping theory - Asia is still very much linked with the American economy, or rather investors, when in panic mode, will sell down whatever holdings, regardless of geographical fundamentals
Equities are at a historical low PE - I guess when growth slows, forward PE does not look too pretty

The current bloodletting is further acerbated by the short positions taken up by the hedge funds. I guess the smarter traders are making a killing out of this global rout. There is more to go but do watch for the bounce.

A sale of two cities

2008-01-09T12:56:00.000-08:00

It's interesting to see how the winter retail sales are played out in London and Paris. For one, the Paris sales are mandated by law that retail stores are only allowed to have 2 sales per year and there is a pre-determined date when the sale starts and ends. In London, the retail stores began slashing prices as earlier as christmas last year, in an effort to draw in the crowds and there is not really an end to the sale period - the sale ends offically when all the products on sale are sold out!
In Paris, the stores are pretty discreet about how the sale is being advertised. In most stores, there is hardly any signs to publicize about the discounts. In addition, the price cuts are still pretty subdued by many standards - usually a price discount of 20% is considered generous. I sense that there is a stigma attached to be seen buying discounted stuff in Paris, or it could be that most parisians have already made their way cross the Atlantic to partake in the London sale. Given the strength of the euro in the recent weeks, it is no surprise that the French have choosen to visit London during this sale period, to maximise their purchasing power.

Here's a pretty cool Paris sale site - there's even a recommendation on the different possible shopping circuits in Paris.

Obama's message of Change

2008-01-04T03:34:00.000-08:00

The strength of the American people lies in their resiliance and their ability to get back on their feet when the chips are down to make a change. In Obama, I hope that the Americans have found the leader who will be able bring the U.S back to its standings as a nation united.

I loved the speech Obama made in his Iowa victory.

I will be going short on whatever this fellow is buying

2007-12-31T23:03:00.000-08:00

Mike Norman, founder of the Economic Contrarian Update has this to say about the housing market back in 31st Dec 2006:

Question: What is your opinion on no-money-down housing developments, like those going up in the Poconos? — Scott (Fair Lawn, NJ)
Mike Norman: Scott, I think no money down is great. It's one of the ways that Americans are benefiting from trends like globalization and the rising use of technology. By lowering capital costs we have access to more credit and that helps the real estate market. As long as we don't enact policy that harms these macro trends, then there is little risk in these highly leveraged loans. As for the Pocono developments themselves, they may have run up too far too fast just as most other properties have, but long-term they're fine.

Mike Norman, again on Fox news, expounding his ever-optimistic view of the housing market. He might as well be renaming his company to the Economic Optimist instead.

Singapore is Tops again - in terms of Pay

2007-12-15T00:46:00.000-08:00

Article on the earnings of the top world leaders. Singapore is tops again - enuff said.

The Union Bank of Singapore

2007-12-12T01:43:00.000-08:00

The Singapore Investment fund (GIC) was reported to have invested 11 bn CHf in convertible notes in UBS. The terms of the deal are as follows:

a. Convertible note with 9% interest payment
b. Maturity period of 2 years
c. Upon maturity, if stock price lower or equal to 51.50 Chf, convert @ price = 51.50, Approx 213.6 million shares, equating a 10% stake
d. Upon maturity, if stock price higher or equal to 73.60 Chf, convert @ price = 73.60, Approx 149.5 million share, equating a 7% stake
e. If upon maturity, price is between 51.5 and 73.6, strike will equal price

Kinda like buying a call option strike at 73.6 + selling a put option strike at 51.5 with maturity 2 years.

What it means,

1. Great positive publicity for sovereign funds - providing a much needed source of liquidity and shedding the 'barbarians at the gate' image
2. Positive signalling effect for investors with investment horizon greater than 2 years for financial stocks
3. Dilution effect for existing shareholders - looks like some investors will not be pleased, expect to see some defensive moves from the board and the chief executive

Going forward,

Expect more capital injections to the investment banks as the credit turmoil continues with the liquidity coming from the Middle East, China and countries with huge foreign reserves.
A further depreciation of the US dollar if these sovereign funds liqiudate their holdings in US treasuries to fund their investments (if investments are to be paid in currencies other than USD)

Condolences to a fellow Singaporean rower

2007-11-25T07:53:00.000-08:00

I am deeply sadden to hear the news about the sudden passing our five Singapore dragonboat rowers in Cambodia, My thoughts are with their families during this difficult time. I am still in a state of shock as I type this entry.

Stephen Loh was a member of the Singapore national team since 1999 and I had fond memories rowing with him when I was still part of the Singapore team. He was a great team mate to have around, always dependable and was one of the fittest member in the squad. He has got a great personality and his smile and kind words never fail to lift my spirits after a tough workout.

I will miss him greatly.

Will we ever have this in the Singapore Parliament?

2007-11-22T09:19:00.000-08:00

Check out the exchange between Gordon Brown (the current UK PM) and David Cameron (the opposition leader).

'He's demonstrating no common sense at all. Would they see a Prime Minister who trys to control everything but actually can't run antyhing.' - David Cameron addressing Gordon Brown.

Gordon Brown's government is under tremendous pressure these couple of days due to the many failings which happened lately - the loss of 25 million UK citizens' bank data, the handling of the Northern Rock fiasco did not help the Labour party any bit.

I am impressed by the quality of the exchange - something I dont forsee taking place in Singapore at least for the next decade

St Pancras is a Star!!

2007-11-20T11:04:00.001-08:00

Had the pleasant experience of using the St Pancras station since last week and my verdict is that the station is simply fantastic! With the old Waterloo station, there was the usual feel that you simply wish to get in and get out into the train as quickly as possible - it was a functional place where people basically wait to get onto the train.

The St Pancras station was different - it evoked the same kinda of feeling as Changi Airport - where I wouldn't mind checking in half an hour earlier just to bask in the atmosphere. The new station went beyond fulfilling the functional need - I simply loved it!

And to top it all off, I was lucky enough to get complimentary drinks and canapes at the champagne bar in St Pancras. Wifey, we are heading to St Pancras this weekend! Yuppie!

Saying Goodbye to Eurostar Waterloo

2007-11-19T14:24:00.000-08:00

A typical week for me would be as follows:
Starting Monday
a. Crawling outta bed at 5.30 am in the moring - it gets tougher in winter .. I am finding it harder and harder to leave the cosy bed, especially with my wife beside me ...
b. Leave the flat by 6.00 am to catch the tube to Waterloo station - it's bloody cold and dark at 6 in the morning in winter
c. Check into the Waterloo Eurostar station for the 7.09am train to Paris - on some days I barely make it
d. Reach Gard du Nord in Paris at 10.59 am Paris time and make my way to the office

And on Friday, I make the return trip home across the Atlantic, usually reaching home at about 9 or 10pm London time.

The interesting thing to note is the different way I am treated by the immigration officers. The French officers usually take less than 20 seconds to waive me through the checkpoint. They take a look at my passport, have a look at my unwashed face and let me through. At the british checkpoint, it usually takes me between 2 to 5 minutes, a barrage of questions unleased upon me; what am I doing in the UK, what is my wife doing, how long will I stay in the UK, what's my occupation, why do I make that many visits to Malaysia (cos I used to be working for a Malaysia client); I have grown smarter since and I now know that a BIG smile usually works wonder.

I was this close to missing the train at Waterloo .... The train departs at 7.09am ... That was the last time I departed from the Waterloo station.
Beginning 14th Nov, the Eurostar departs from the St Pancras Station, which I think is long overdue; the train travels on the normal rail lines from Waterloo to Ashford, UK, which means travelling at a speed no faster than 70km/h until it reaches Ashford.

Check out the volatility on the FTSE this afternnon

2007-11-07T12:43:00.000-08:00

Check out the volatility on the FTSE index during the last 30 mins of trading. What can I say ... it's a see-saw, no, it's a roller coaster ride out there!

What happens in a market where there are no buyers??

2007-11-05T14:49:00.000-08:00

If a tree falls in a forest and no one is around to hear it, does it make a sound?
If there are no buyers in a market, will there be any prices?
We have not seen the end of the credit turmoil - check out the the interesting comments given by the CFO of Citi - some of his comments border on desperation and pure absurdity.
'No market to hedge CDO book' , 'No observable prices to judge prices', Citi is really in deep deep trouble here.
I am quite skeptical about our local banks as well - they did report holdings of CDOs on their books in August but Singapore accounting rules do not require them to mark these positions to market/model since these CDOs are held-to-maturity. The question is, if the underlying securities are marked down in ratings or have a higher risk of default, the cash flows from these CDOs will no longer be guaranteed. Expect more volatility ahead.

Losing Credibility

2007-11-01T04:08:00.000-07:00

It's a holiday today in Paris and I am working in the office. I like working in the office when it is the holidays as the quiet surroundings bring a sense of peace and serenity, especially when you have a big problem on your hands.

This week has got to be the most nerve-racking and morale-deflating week of my life. I have lost my credibility due to the repeated failed attempts to resolve a production issue on the client's side. The problem, in many ways, is complex, and it is not helped by the fact that I was working alone on this, together with the developer who seem to have as much difficulty as I have in deciphering where the issue lie.
As consultants, we are usually put on the firing line first and in my eagerness to move forward, I broke the one rule that should never be broken - I gave advise without first testing it on my end and the advice given was quite a disaster. The client was furious and the matter escalated to upper management. Guess my project manager had a pretty tough time with higher management yesterday, this client is not an easy one to deal with.

My credibility lost and my confidence naturally shaken. It's tough to pick up the pieces and try to move forward, but it's nevertheless a good learning experience. I am glad it is a holiday in Paris today. I miss a hug from my wife....

;-) Today also happens to be my fifth year working in this company ... Nice!

Teachers to be trained to teach Financial Literacy

2007-10-31T10:49:00.000-07:00

So, NIE is going to train 500 teachers to teach Financial Literacy over the next 18 months.

NIE is partnering with Citi Foundation to 'build a framework that provides a comprehensive and structured nationwide teacher development education programme to equip teachers in schools with the financial literacy skills,' said an NIE statement.

Prof Lee Sing Kong, Director of NIE said: 'First, we provide teachers with basic financial literacy skills of managing their own finances and thereafter, pedagogical training to empower them with engaging pedagogy to reach out to their students. Equipped with resources and engaging pedagogy for the teaching and learning of financial literacy in a fun and meaningful way, the teachers can apply the financial literacy principles in classroom teaching and enrichment activities for students.'

#interpretation# I think NIE better start paying these teachers a better salary in the event that these teachers decide to make a career change. hahaha...
Financial Literacy is defined in wiki as 'the ability of individuals to make appropriate decisions in managing their personal finances'. Wow. That's a lot of knowledge to impart in order for anyone to make 'appropriate' decisions.

Mr Piyush Gupta, Head of Asean, Markets and Banking and Citi County Officer, Singapore, said it is important to give children a head-start in the disciplines of financial budgeting, planning and investing, to help them better understand how to use financial resources available to meet their goals in life.

#interpretation# I am not too comfortable when financial institutions tie up to 'impart' knowledge to impressionable young people. These institutions earn fat margins on selling exotic and complex financial products - what other better ways to sell these financial products of mass destruction than to teach people how to buy them ...

Stamford Bridge, It's in the Blood

2007-10-30T13:53:00.000-07:00

Think me and wifey are on a spectator sports diet this couple of weeks. We are heading for the Chelsea/Everton clash next weekend at Stamford Bridge ... wow wee!

Our First Trip To Wembley Stadium

2007-10-28T15:28:00.000-07:00

Wifey and I just returned from the first ever NFL's international series match between Miami Dolphins and the NY Giants at Wembley Stadium.

The London weather was in her usual foul mood and there was constant rain throughout the match, resulting in seven fumbles and a missed field goal for each team. It was a first of sorts for wifey and I. First time at the Wembley stadium - the size and atmosphere was just astonishing, our first time at an NFL match - we were learning about the game as it progresses, and our first cheeseburger since arriving in London.

We took a train to the Wembley Park Tube station followed by a 15 minutes walk up to the main entrance of the Wembley stadium.

The pre-game show included performances by the British band 'The Feeling' as well as R&B singer Jocelyn Brown. John Terry and Lewis Hamilton made guest appearances for the coin toss.

The Gaints eventually topped the Dolphins 13-10, holding off a late challenge in the last two minutes of the last quarter.

Between American football and Soccer, I think I still prefer the latter. Next up, Stamford Bridge. Chelsea Vs Everton 11th Nov.

We are heading to Wembley Stadium!!

2007-10-25T13:20:00.000-07:00

Wifey and I are heading to watch the Miami Dolphins Vs the New York Giants at the new Wembley Stadium this Sunday!!
Hoorray!

SORA rates driven by Fed's liquidity machine

2007-10-25T01:04:00.000-07:00

The US Federal Reserve has pumped $25.5 billion in liquidity into the financial system so far this week, raising concerns of continued troubles in short-term funding markets.
The central bank released $8.5 billion in cash on Tuesday and $6.5 billion on Wednesday. The intervention came after the Fed pumped out $10.5 billion on Monday.
And look what happens to the SORA! (Singapore Overnight Rate Average). Singapore's soaking up all the liquidity. The possible explanation is this:

a. Singapore banks buys USD using SGD (last three days USD/SGD spiked up to 1.466 compared to the current 1.458)
b. MAS funds the SG banks SGD borrowings at lower rate to soak up the USD (lower SORA)

;-) a good way to profit if you know when the Fed is going to pump out more USD ...

Industrial Action by French Unions over Sarkozy's reform plans

2007-10-17T08:20:00.000-07:00

Well the French railway unions have decided to go on a strike tomorrow and friday. This strike will be pitting the railway workers against Mr Sarkozy's resolve to reform the current pension privileges enjoyed by some half million French civil servants. The pension privileges include early retirement at 50, shorter contribution period and generous pension payouts compared to other public sector workers.
The French unions have threatened to bring the transport system to its knees as in previous strikes in 1995 and 2003. This time may be different - as Sarkozy was elected on a reform-focused platform and is believed to have the quiet support of the rest of the nation.

This will be one strike that will seriously jeopardize my travel plans - gosh guess I may just have to find a Rugby World Cup Final ticket and stay in Paris instead! Wifey, is that fine with you?

MAS in Inflation fighting mode

2007-10-08T07:05:00.000-07:00

Wow, seems that MAS has began inflation fighting in Singapore. SGD is appreciating across all major currencies as at today.

USD is down almost 4% YTD
EUR is up 3% YTD, falling from a peak of 5%
JPY is down 3% YTD

If viewed at a one-month's window, all currencies are down against the SGD except for the kiwi. So you can almost guess who our major trading partners are ...

Automation - Boon or Bane?

2007-09-27T12:21:00.000-07:00

Having worked for 5 years in an IT firm for the finance industry, I cannot help but see automation from both sides of the coin. Financial institutions, since the turn of the century, have embarked on a cost-cutting imperative in order to boost their profit margins. The banks embraced technology wholeheartedly; catch-phrases like 'STP' (Straight-Through-Processing) were coined, to illustrate the ability of using technology to process trades from cradle to grave without manual intervention. The end result is increased productivity and more time or effort can be placed on eliminating exceptions to the well-oiled transaction process.

This increased automation of the finance factory invariably lead to job losses and also increased demand on highly-skilled workers who are both conversant in finance and technology. The increased faith and expenses in technology no doubt provides many rewards but most are oblivious to the dark side of this increased addiction to automation.

Increasingly, I noticed that the concept of STP is hijacked and many users are using this term loosely, relentlessly trying to increase their automation rate across all processes as much as possible. Automation works fine if processes follow a fixed and orderly path. Exceptions from this path can be easily identified and eliminated. However, if in the first place, the path is not predicable, and if there are thousands of possible credible outcomes, any effort at automation will be costly and dangerous.

I recalled an encounter with a client who was happily recounting their efforts at increasing their STP rate. As we dived deeper into their processes, it became apparently that there are some exceptions which are not captured and have serious implications. Jokingly I cracked up, "Yeap, looks like you have STPed your problems as well".

The age of inflation

2007-09-17T11:24:00.000-07:00

Mr Alan Greenspan gave various interviews ahead of his new book 'The Age of Turbulence'. In his interviews, he raised the following points:

a. The world economy looks set to enter into an inflationary phase. The last decade marked a disinflationary period due to globalisation - the integration of a billion workers from China to India to Russia had a disinflationary effect on the world economy. The result was low inflation with coupled with even lower rates producing a hefty increase in asset prices. In the next decade, the disinflationary effects will gradually ebb as the world economy reaches a new equilibrium with the additional resources
b. UK home prices look set to tumble. UK housing is more exposed than the US to adjustable-rate mortgages and these are highly interest-rate sensitive
c. Bubbles are inevitable - Humans can't seem to be able to learn from mistakes. "Human nature moves from euphoria to fear"
d. The Fed under his leadership does not prickle bubbles but instead allow a full deflation of the bubble as evident in the dot-com crash. I wonder how the Fed under Bernanke will respond to the current credit crisis - will he prick the bubble by holding rates or will he allow the credit party to continue?

The Fed convenes for a meeting tomorrow for a rate-setting decision. I am hoping that Bernake will not cut rates - this credit crunch needs to be worked off by hard labour and higher savings by the American workers/consumers, not by a bail-out from the Fed.

Life is about Trade-offs?

2007-09-08T16:59:00.000-07:00

On my previous trip back home, I had the pleasure of meeting up with a former lecturer in NUS who is now working at an investment bank as an educator. He was sharing with me about his thoughts on decision-making in life and how we actively seek to find a better alternative to our current status.
I didn't think too much about it till I went for an afternoon run today; my thoughts drifted and I started comparing the trade-offs coming here to London from Singapore.
Some trade-offs are easy to quantify: Taking a swim in an Olympic-sized outdoor pool under the nestling morning sun for SGD1 Vs Bumping into bodies in a quarter Olympic-sized heated indoor pool for GBP4. Singapore public pools wins hands down.
Other trade-offs are slightly difficult to quantify: Lying in Hyde Park under the warm summer sun and a cool nice breeze, watching stage one of the Tour de France. Taking nice long runs in the cool dry minty weather, allowing me to stay fresh and dry throughout the run. London doesn't feel so bad after all ..
However, there are some trade-offs which I can never put a price on: Watching my baby nephew grow up, the family dinners, having mum's hands around my shoulder when I am back home late at night for dinner..
Well I guess it is tough trying to work out which alternative is better and as I struggled up a long hard upslope, it suddenly came to me - there is no point trying to make sense of what I have missed out on, instead, focus on the present and make the best out of whatever decisions that I have made. With that, I gasped another mouthful of air and reached the top of that favourite spot of mine in Hampstead Heath.

Interview of Mr Lee Kuan Yew with the IHT

2007-08-30T04:57:00.000-07:00

I am not exactly sure when it began, but as I grew older, I am starting, more and more, to appreciate and admire MM Lee Kuan Yew's leadership in carving out a successful city state in an unstable and convulsing Southeast Asia. The underlying ideology for the Singapore political party as MM Lee remarked in his interview with IHT is driven by a pragmatic purpose - to make this place better and make it work. His interview with the IHT is definitely worth a read.

Subprime toxicity reaches Singapore shores

2007-08-28T12:52:00.000-07:00

So, one of DBS bank's off-balance sheet structure has difficulty finding investors. The bank had to inject emergency funds owning to the turmoil created by the sub-prime crisis in the U.S.
The bank had no obligatory provision set up initially as it thought that the structure would be funded wholly by investors. I guess now they are sitting on a pile of loans which nobody wanted and a chunk of credit risk which they did not factor into their books.

Inflation to rise in Singapore

2007-08-27T12:29:00.000-07:00

Trade and Industry Minister Lim Hng Kiang. -- ST PHOTO: ASHLEIGH SIM

Well, it is about time that the Singapore economy shows signs of heating, as evident in Mr Lim Hng Kiang's address to the Parliment on Monday.
I was just as surprised to find that our CPI has only increased at an annual rate of 1% over the last three years. Surprisingly, the teh tarik and the kopi had a price increase by almost 15% over the last year. Well maybe teh tarik and kopi just did not make it to the CPI basket. Guess the folks in MTI may have substituted hot beverages with hot tap water.

'We look at an inflation forecast of between 1 to 2 per cent this year, which is a little higher than our previous years, but definitely still reasonable, considering that this is more than 16 quarters of growth,' Mr Lim told MPs.

Given MAS' exchange rate policy for keeping inflation in check, expect a modest strengthening of the Singapore dollar against our main trading partners like U.S, EuroZone and Malaysia.

The best homecoming gift

2007-08-18T02:32:00.000-07:00

This has to be the best homecoming gift I have ever received from my sister. On the 4th of August, as I was flying back to Singapore from London, baby Galen was born, I believe, to celebrate my homecoming. ;-)
Baby Galen weighs a healthy 3.1kg at birth, and is extremely lovable. He's got big brown eyes, rosy little cheeks and a pair of really pretty feet.
As I type, little Galen is sleeping blissfully in his cot, his little chest rising each time he takes in a new breath. Time seems to pass a little more slowly and peacefully when I am around him.
I am wishing that little Galen will grow up to be a intelligent, honest and compassionate young man. Sleep well young Galen.

The hottest property market in the world

2007-07-30T10:51:00.000-07:00

It was a rude awakening, as if woken from a sweet dream that my Singaporean expat bosses lamented about the rising costs of accommodation. Housing rent and business rent has imploded in Singapore, giving her the distinction of being the hottest property market in the world according to Jones Lang LaSalle. (See the rate of increase as illustrated above)

It was reported that this price surge had taken the government by surprise, though I believe this bears testimony to the government's successful effort in re-making Singapore into a country of choice for foreign businesses as well as foreign talents. Kudos to the party-in-charge. They deserve their million dollar salary.

As for me, I watch in earnest at how Singapore has progressed and am ambivalent over her fantastic growth in the last year while I was away. I am proud to see her as a serious contender to Hong Kong, London or even New York as the most 'happening' city for work and play. On the other hand, I am getting increasingly clueless as to when I will be able to come back to our lovely shores and be able to afford a decent looking flat - most probably I will have to start looking at the properties in Johor Bahru ...

Nevertheless, I am counting down the number of days before I arrive back in sunny Singapore. Enough of croissants, President-brand butter, oats, I am getting ready for nasi lemak, oily noodles and good-o Tiong Bahru porridge.

I need to start learning French

2007-07-24T11:55:00.000-07:00

Had the pleasure (or misfortune) of being part of a discussion between two chief developers, a developer and a passionate project manager regarding issues around a new development. I was the only non-French speaking person in the discussion - my french never went beyond counting to ten and saying 'Oui' or 'Non' or maybe throw in a 'Je voudrais' - and my French colleagues were kind enough to entertain me. Our discussion went like this:

Chief developer A: So we are gathered here for ..
Chief developer B: Developer C, you look like you lost 20kilos, what happen?
Developer C: I lost a couple of pounds, not kilos. (in French) It is all becos of this joker sitting beside me (he was pointing to me)
*Laughs all around* I was acting blur. True, I was testing the development done by him, but no way I was pushing him that hard. Anyway he looked pretty good when he's slimmer.
Chief developer B: So whats the problem? (he was referring to the issues)
Project Manager D: Well, this is the list of reviews we have from the client (begins to go through the list of issues)
Chief developer B: attente, attente .. What are these problems? Why are we speaking in Engrish now?
Project Manager D: Because *my_name* can speaks only English, so ...
Chief developer B: I see, so you are the problem (pointing at me) ...
All: Hahahaha ...

They were nice enough to do the whole discussion in English, breaking once in a while to French when talking about something really technical, but giving excuses before they do so.

I guess it is about time I start picking up some French phrases. Will try to write one post in French ... hmmm...

Liberty on Wheels

2007-07-22T12:59:00.000-07:00

On my way to work, spotted something new on the streets of Passy, Paris. Nope, it was not an automatic dog-poo clean-up machine. I still occasionally get ambushed by a pile of dog-poo when I am not paying attention to where my feet is landing.

It is the new communal bike program which was launched early this week. Aptly named as Velib', a play of words 'Velo' (bike) and 'liberte' (liberty), there are approximately 10,600 of these grey-ish looking bikes installed at 750 docking stations each situated 300m apart.
Parisians' response to these bikes were pretty healthy, judging by the number of people I saw riding these bikes on my way to work. I am really eager to try one of these out this week - the handsome looking self-service docking machines apparently spew out instructions in eight different languages - all that I need is supposedly a bank card.

Tour de France, here I come ... check out the lovely basket at the front of the Velib', doesn't it look gorgeous?

It's Flooding in London

2007-07-20T09:42:00.000-07:00

The whole Circle line is suspended due to flooding.
And that's not all - the Bakeroo line is part suspended due to industrial action.
Bet this is goona be a wet and slow weekend. Better to stay at home ....

BBC Summer Series - Night out with the London Symphony Orchestra

2007-07-14T01:05:00.000-07:00

Against the backdrop of the tall, cold and erect office buildings in Canary Wharf, the BBC presented it's annual Summer Galas. Wife and I attended the evening's performance of 'The music of Hollywood' by The London Symphony Orchestra. We sat, at times lying on our backs on the nicely-trimmed grass park with a bottle of chardonnay and some chocolates from M&S.
The evening started with the familiar rendition of the 20th Century Fox FanFare, followed by classics such as movie themes from 'Out of Africa' (brought a drop of tear to my right eye), 'Jurassic Park', 'Superman' and not forgetting 'StarWars'.

It was a nice conclusion to the six months project I have done in Canary Wharf. Will be heading to Paris office for the next couple of weeks and prepare myself for the next assignment.

Durex Condom Tester - Have you got what it takes

2007-07-09T12:50:00.000-07:00

For a moment, I thought my eyes were playing tricks on me. This has got to be the best job in the world if there ever was one.

Some years back, when I went back for my reservist training in the armed forces, I would lie to my friends that I was a durex consultant, whose responsibilities include condom testing, running statistical reports to investigate which condoms sell best in Asia, what are the new flavors - ('durian' is my favourite) which will soon be rolled out in Singapore. Most, if not all, are taken in, and I will soon have a big crowd of reservists sitting round me in the canteen, listening me talk about my work as a durex consultant. A handful who knew me since junior college, having known me as a geek, remarked 'Of all the people (i think he meant losers here) I knew in school, you have got the best job, the best that any guy could want' - and they were so very green with envy. Picture their disappointment and anguish when I reveal that it was all a big lie.

But hey, to all my friends whom I have tricked in the past, guess I wasn't too far off the mark. Interested testers, please sign up here.

New Nike Ad - Woods pokes fun at Federer

2007-07-07T13:55:00.000-07:00

Watch for the final twist...

Nike Ad - Roger Federer And Tiger Woods

Le Tour De France Opening Ceremony

2007-07-06T15:42:00.001-07:00

Made a stop over at Trafalgar Square after work earlier this evening to watch the Opening Ceremony of the Tour De France. For the first time in the Tour's history, London will host the Le Grand Depart, which includes the Opening Ceremony and the Prologue Race. Stage 1 of the race will start from Central London and end in Canterbury.

The weather, which was a total letdown this week, was surprisingly cooperative this evening. The sun was peeking out from the clouds and it was just the perfect opening ceremony anyone could hope for.

The highlight of the opening ceremony was the introduction of the various teams and the cyclists. Here's one of the crowd favourite, Great Britain's very own son, Bradley Wiggins.

Team Milram from Italy, headed by Alessandro Petacchi. Loved the baby blue jerseys.

Team Discovery Channel - living in Lance Armstrong's shadow

Team Euskaltel-Euskadi. A Spanish team, mostly climbing specialists

Team T-mobile making their way to the stage in Trafalgar Sqaure where they are introduced to the crowd.

This cheeky chap has got his admirers - stopping to steal a kiss from the crowd. Bet this is something he wouldn't dare try when the race starts.

The great Tour de France Sale. Everything must go.

This is gonna be one exciting weekend.

Dr Live Freely encourages you to FLIP your property

2007-07-04T02:43:00.000-07:00

I have been watching the spectacular growth in the Singapore property prices for the past year. Before coming to London, wife and I were actually looking at a couple of apartments but due to our plans to move abroad, we decided not to commit ourselves to purchasing an apartment. The last time I checked, one of those apartment I was interested in, was sold en-bloc, the owner of another apartment is now asking for a price 40% above valuation.

So it is not surprising at all that everyone is trying to jump onto the property bandwagon, even this fellow here. A few points he made in his article which I do not agree with:

a. Mentions about the buzz and hype of the coming events - the assumption that these events will attract more investors is misleading. There is no clear correlation between those events he mentioned and the asset prices. There is a certain amount of risk to undertake if we are to assume that investors looking for properties will be drawn to Singapore because of an IR or an F1 race. In addition,, we are still not sure if there will ever be a night race due to safety concerns and we cannot be certain if the integrated resorts (IR) will ever be as successful as those in Macau or Las Vegas.

b. Suggests that anyone with cash should invest in properties and it is almost certain to make money. In the example he gave in the article, the investor has no intention of living in the property - the intention is to quickly offload the property before its completion date to a higher buyer. Everything works perfectly in a exuberant market but one of the key points which he seems to have missed is the liquidity of the market when the property holder wants to sell. In a market downturn, there may not be enough buyers to support the market.

c. 'Buy Low, Sell High' - isn't this the correct time to sell High? Why is he touting to buy now? Unless he is selling ....

With a population growth at about 1.275% per year, and with the supply of residential properties in Singapore growing at approximately 3% for the last two years , surely there will be an overhang at some point in time.

It is in the good times that bad decisions are made.

Pride London 2007

2007-06-30T16:33:00.000-07:00

"Dear, see only hor, cannot touch okay"
Beloved wife and I went down to Regent's Street today to catch the Pride London Parade. It's been a while since we ventured out of our tiny flat in north London.

Thousands of people turned up for the event, dressed up in mostly pink and outrageous and wild costumes.

The skies did little to liven up the carnival, and the march nearly could not take place due to the suspected terror plots uncovered the day before.

The Pink Brigade

Teachers Union making a stand. They are just one of the many unions participating in the parade.

Bus Top dancing, anyone?
Favorite was the Superman costume followed next by Wonder women. No prizes for guessing the preferred choice for the ladies.

A member of the London Olympics 2012 swimming team

Inspiration for the dress definitely came from here

The message sent out was clear - End Homophobia. Love One, Love All.

Leveraged to the Tilt

2007-06-29T13:43:00.000-07:00

This is getting a bit insane - the loose monetary policy in the US has created a monstrous surge in liquidity which has translated into an enormous appetite for assets ... varying from junk bonds to real estate to art pieces to commodities.

Check out the 'surge' in leveraged buyouts on the left.

This increase in demand for assets have also lead to inflationary pressures on prices. Which partly explains why central banks all over the world (Singapore excluded) are trying to tighten their monetary policy by raising rates. This increase in rates will have a dampening effect on the stock market. Worse still will be the credit markets - with each rate reset, the lenders are going to demand for more return on the risky assets which they are holding.

Hang on to your seats - it is going to be quite a wild ride for the next half of the year.

Severe delays are reported ...

2007-06-29T04:43:00.001-07:00

I thought that the delay today was due to the package found near central London. Looks like I was wrong - there is someone hiding under the train.

My postman is not delivering mails today

2007-06-29T04:17:00.001-07:00

130,000 postal workers went on strike today - over pay and potential job cuts.
The postal workers union rejected a 2.5% pay increment and instead, wanted a pay increment pegged to the national average for the past 5 years - equivalent to a 27% increment. They are also against modernisation plans put forth which will reduce their headcount by a further 40,000.

There are rumors that Tube workers wanting similar pay increment and threatening to go on strike.

Think I also need to go on a holiday - let's hope our good workers in Singapore don't go on strike when I am back ...

There is something not quite right about the weather

2007-06-27T01:57:00.000-07:00

It is late June in Paris and the weather feels like it's Spring. Was so lazy (and cold) to get out of the bed to go for a run this morning and ended up watching CNBC (the only English channel available) in the tiny hotel room in Trocadero. We had a really warm weather in April. Maybe Spring and Summer decided to switch places this year.

Property Investment

2007-06-24T08:11:00.000-07:00

The property prices in the UK have risen to such an extent that first-time home owners are being priced out of the property market (the average asking price of a house in London has reached £387,898).

As a result, more and more young Brits are seeking to buy a property outside of the UK. Their searches have lead to Eastern European countries such as Romania, Bulgaria and Estonia.

I recently went on an inspection trip with a friend who has the intention of purchasing an off-plan ski resort in Pamporovo, Bulgaria. We flew into Sofia and spent about 3 hours on the road traveling to the ski resort. There was a slight delay at the immigration desks as the officers seem to take a great deal of interest in my passport - I am assuming that he is looking at a Singaporean passport for the first time and wondering if I have the necessary papers to enter - Singaporeans are issued a three month tourist visa on arrival. Had a great chat with the property consultant who also doubled up as our tour guide cum driver. We compared the economic, political situation in Singapore, Bulgaria and UK - talked about corruption in Bulgaria, government housing in Singapore and the cost of living in the UK.

Some interesting facts about Bulgaria:

Bulgaria has a population size about twice Singapore but a land area which is approx 160 times bigger than Singapore
Bulgaria embraced democracy in Nov 1989
Bulgaria has just joined the European Union as of this year.
The Bulgaria currency is called 'Lev' (pronounced 'Left')
There has been a huge construction and property boom as a result of the overseas investments from the Russians, British, Irish, etc.
Almost a quarter of Bulgaria's GDP is dependent on the property industry.

The ski resort in Pamporovo - construction in progress ...

The view from the ski apartments

A clearing, leading to the ski slopes

London Canary Wharf MotorExpo

2007-06-21T00:31:00.000-07:00

Take a load of sexy cars, place them in the financial and commerical heart of Britain, and this is what you get. For a full week, London bankers, traders, financiers were treated to a bevy of motor vehicles ranging from the sexy Audi R8 to the environmentally conscious BMW Hydrogen 7 Series. Also not forgetting the extremely petit SMART cars.

Take a look at some of the pics taken:

Here's the heart-stopping Audi R8. Growl ... Bite your head off ...

Overheard between 2 bankers over an Audi A8...
Banker A: So what colour did you get?
Banker B: Got it in black.
wanker A: It's a real beauty isn't it? What are you going to do with your Beemer and the Lex?
wanker B: Yeah, looks like I have to get a bigger garage.

One of these A8 cost about 80k pounds. I bet these guys get like an annual bonus which could easily buy them 10 of these.

The Ford GT - Only 500 of these are manufactured in the world:

The environmentally conscious BMW Hydrogen 7 series. It sprouts out water instead of fumes. How's that for a car?

My kind of car - tells alot about me and my wife - both pretty SMART ;-)

The breath taking Aston Martin V8 Vantage Roadster. They were only uncovered for interested buyers - most of the time they are all covered beneath a black sheath.

The LandRover FreeLander2. You will never fail the park-on-the-steep-slope driving test with this fuel guzzler.

This may cost up to a fifth of the bankers' annual bonus ... hmmm ... Should we have this in pink my dear?

Back to reality ... Back to work ...

Low Low Rates in Singapore

2007-06-21T00:09:00.000-07:00

Against the backdrop of rising yield in the United States and in Europe, it is interesting to see that Singapore rates remain low and sticky. Check out the short term rates here. The longer end of the yield curve is also relatively low in comparison to US and Europe.
Well the MAS has categorically stated that Singapore uses the exchange rate as its only tool to maintain price stability, rather than using interest rates.

So, in this low interest rate environment, we see the following implications/consequences:

Buoyant property markets - Loans are cheap, banks are willing to extend their loans
Capital gains for the local banks - Local banks borrow cheaply from retail customers paying less than 0.5% on deposits but lend out at 6%
Weak Singapore dollar against the Euro, Sterling and Australian, NZ dollar. Companies exporting to these countries can expect an exchange rate windfall

Is MAS going to raise rates anytime soon? I do not think so. Singapore prices, with the exception of the property markets, have remained relatively stable so far. In addition, in order to compete with the cheap (and good?) workforce in Asia, the Singapore dollar has to remain competitive.
So what to do with the extra cash? Well the simplest way would be to open a foreign currency Fixed Deposit - taking on a bit of the FX risk but getting a lot better returns.

Costly Engineering Mistakes - The Airbus A380

2007-06-10T07:44:00.000-07:00

A blogger's perspective, not necessarily the most factual one, on the causes of delivery delays of the Airbus A30 and the costs of these mistakes.

The Airbus A380 is the world's largest commercial aircraft to be ever built. It could accommodate a total of 853 passengers in the full economy seat configuration and has a 15200km flight range. To build an aircraft this size, technical and technology boundaries were undoubtedly redefined. The aircraft mammoth wings, a case in point, is the first to be built with a wing cross-section that is smoothly contoured, instead of wings that are partitioned in sections. This design feature increases aerodynamic flow and reduces drag, thereby boosting fuel efficiency.

The airbus A380 will also be remembered for its delivery delays amounting to no less than two years. Airbus attributed the delays to the 530km of wiring in each aircraft as the primary reason. Initial analysis by airbus engineers and independent consultants reported that the wiring problems can be resolved by having more resources on the deck and can be rectified in six months. However, a second more in-depth analysis conducted after the first six months of delay reveals a different picture - the use of different incompatible versions of computer 3D software and poorly managed change control and change management procedures were the actual causes . There were also other engineering defects unveiled during the battery of tests conducted, such as landing gear problems and weight issues which lead to another delay.

In total, the airbus A380 project saw a change of 3 Aribus CEOs, an EADS (parent company of Aribus) CEO, a A380 progam manager and spiraling costs which is now estimated at a cost of 12 bn euros, a cost overrun of 1.5 bn euros. Not to mention the loss of goodwill amongst clients due to the long delays. The airbus A380 is due to deliver the first plane to Singapore airlines in Oct 2007.

Costly Engineering Mistakes

2007-06-06T01:22:00.000-07:00

Was just reading about some of the world's great engineering feats and some of the mistakes made. Have decided to dedicate a section of the blog to some of these mistakes and the mammoth costs incurred as a result. Shall start off with the Airbus A380, since it will be beginning commercial flights soon, in Oct 2007.

Cooling the London Underground

2007-05-30T11:06:00.000-07:00

Plans to install giant chillers in London Tube stations Oxford Circus, Waterloo and Euston in order to save commuters from the merciless heat in summer were unveiled yesterday by the London Transport Authority. Other measures include pumping air, cooled by the water in River Thames, into the Victoria Station, and installing fans across 50 other stations. This measures are part of a £150 million scheme to cool the century old London underground.

Last summer, temperatures reached as high as 47 degrees Celsius and the mercury is expected to set new highs, judging by the mild winter this year.

I have came up with a couple of ideas to see me through summer as I commute in the London underground:

* Use the DLR whenever possible - it is more spacious and there are windows in the cabins which can be opened
* Travel earlier so as to allow the morning rush hour. Evenings should be fine when the temperature drops
* Carry a bottle of water with me
* Sit near the ventilation vents (usually the middle seats on the Northern Line)
* Stand near the end/start of each cabins - there are windows there pray hard that they can be opened

Am taking 2 weeks off in Singapore during August, so I should at least be able to escape 2 weeks of sticky London commute and enjoy the air-conditioning in the SMRT trains. Phew!

Maglev train gets shelved in China

2007-05-29T09:54:00.000-07:00

I could still remember the time I took the Maglev train in Shanghai. The trip lasted less than 8 minutes from start to finish and all throughout the ride, I was fixated with the digital speedometer displayed at the front of the cabin. The train reached a maximum speed of about 380km/h for less than 30 seconds before decelerating gracefully into its destination. The joyride was over before I even had the chance to kick off my shoes.

A couple of days ago, it was announced that the plan to extend the current maglev line to Hangzhou was put on hold, partly due to concerns regarding 'health' reasons - radiation. Residents living along the proposed route had been petitioning against the plan and seems that their opposition has borne fruit. I can't help but draw parallels about the residents' concern with magnetic mattresses which were once a rage. Imagine the maglev as a huge magnetic mattress, hey you reap all the benefits simply by living near the maglev line, without having to spend a single cent.

Clash of railway civilisations

2007-05-28T06:30:00.001-07:00

Finally,the high-speed rail linking France and Germany will soon be a reality. This project had spent almost 10 years in the sidings because of Franco-German quarrels about coffee cups, braking systems, on-board handcuffs and little red flags.

So exactly what was their disagreement about?

High Speed Trains - German Left, French Right

The French had to meet German standards: stronger brakes because Germany insists on shorter braking times, drinkable water in the lavatories and real porcelain rather than plastic crockery in the dining car. This was almost akin to telling the French how they should eat and the French countered with their own standards:

French trains have a special seat with metal rings to hold any criminal detained on board; the German trains did not. Each French train has, under rules drawn up in the steam age, an emergency kit that includes red flags and flares – pointless, say the Germans, when travelling at these kinds of speeds. The new German trains, in order to meet French specifications, now have three wiring systems and five different fuses.

But before the French were wholly satisfied, the Germany trains had to complete 120,000km of tests and more than 30 drivers had to pass an exam in the French language. But the biggest non-technical sticking point was the refusal of French ticket inspectors to serve coffee and meals to first-class customers. This is a normal part of the service for German ICE trains but was a step too far for the proud controlleurs. German inspectors will now double as waiters for the whole journey to Paris.

Now, for as for the planned railway link between Singapore and Malaysia, I wonder what would be their sticking points?