Monday, September 26, 2011
Sunday, September 25, 2011
Wednesday, September 21, 2011
Saturday, September 17, 2011
Monday, September 12, 2011
Sunday, September 11, 2011
Check out this great MSN video: Episode 22
Saturday, September 10, 2011
Thursday, September 8, 2011
Fitch warns of downgrades for China, Japan
Andrew Colquhoun, head of Asia-Pacific sovereign ratings at Fitch, told Reuters in an interview that China's local currency debt rating could face a downgrade over the next 12 to 24 months.
"We expect a material deterioration in bank asset quality," he said. "If the problems in the banking system pan out as we expect or are even worse over the next 12 to 24 months, then that would incline us to take the rating downwards."
Fitch downgraded the outlook on China's long-term local currency debt to negative from stable in April because of concerns about the country's financial stability after a lending surge over the past two years.
Fitch's China rating is AA minus, its fourth highest level.
China reported local government debt of 10.7 trillion yuan as of the end of 2010. More than 347 billion yuan in urban construction investment bonds were issued in the five years to 2010.
"The rating remains at relatively high levels, and that is because there are a number of factors that give us comfort," Colquhoun said.
"One is the strength of the sovereign balance sheet, the second is if we look at the banks, we do expect the problems to be confined to the asset side of the balance sheet, and asset quality problems are much easier to manage for the authorities than problems on the funding side."
Colquhoun also said there was a greater than even chance Fitch will downgrade Japan's credit rating because of the country's public debt, which is running at about twice the size of the $5 trillion economy.
"We think the ratings on current trends are more likely than not to go down," Colquhoun said. "To shore ratings up at their current level we need to see a credible fiscal consolidation plan."
Both Standard & Poor's and Moody's Investors Service have cut their credit ratings on Japan this year because of concerns about the country's high public debt.
Wednesday, September 7, 2011
Sunday, September 4, 2011
Friday, September 2, 2011
Bao Jing Trading gold investment buy back scheme have defaulted
Investors with Bao Jing Trading were promised monthly returns of 1.5% to 3% through an elaborate buyback scheme. If they left their gold bars with the company, the returns could go up to even 7-10%.
At least 120 investors are now feared to have lost up to S$40 million with their gold investments.
The office of Bao Jin in Rochor is currently empty and the Malaysian owners have also since gone missing.
Many investors were also afraid to make a police report as the owners had threatened them that they would not be able to get back their money if they did so.
According to ACRA, the Bao Jing Trading was registered using a HDB flat address in Jurong East. The owner of the flat denied any links with the company.
Actually, there were already tell tale signs a couple of years back that Bao Jing was in trouble. According to this article in the Straits Times back in February 2009, an investor who invested $5000 with Bao Jing and was promised a monthly return of $150 had problems getting back his money when he tried to end the agreement.
Despite this, the company was able to continue operating for another two years and con Singaporeans of their hard earned money.
If there is any company out there that promises to give you a guaranteed monthly return of 2-3%, you better be very careful. Because if something goes wrong, you are very much on your own and can forget about getting back any money.
Singapore was the eighth most indebted country in the world.
Fortune said that Singapore had debts of US$254 billion (S$307 billion), equivalent to 95% of its gross domestic product (GDP).
MOF (Ministry of Finance) has clarified that the Fortune Magazine’s article is misleading as it only looks at Singapore’s liabilities and not its assets.
MOF maintains that Singapore’s financial reserves are well in excess of its debt and that Singapore is a debt creditor and not a debtor.
Part of Singapore’s reserves, which includes not just its financial assets but also it’s state land and buildings, are managed by Temasek Holdings and GIC.
Drawing on the past reserves requires the approval of the President of Singapore, who serves as a “second key” in safeguarding our reserves. For example, the current President, S R Nathan, has approved the use of our past reserves to fund land reclamation (a few times since 2001) and land acquisition for SERS projects (27 times since 2002).
In 2008, the reserves were also drawn down for a resilience package to help Singaporeans tide through the global financial crisis.
S&P has recently re-affirmed on Singapore’s long-term AAA rating.
However, I find that MOF’s reasoning is faulty. If it is so simply just need to look at net assets, then even Greece is OK because the value of it’s state assets like land, islands, historical monuments etc is more than enough to pay off its debt.
The main issue is liquidity and short-to-medium term ability to honour debts and liabilities. For example, you can own a million-dollar condo, but if you lose your job and unable to pay back $10K to the bank for your credit-line, you can be made bankrupt and force-sell your condo to pay off the loans.
MOF should have said that Singapore no problems paying off its debts and liabilities into the forseeable future because the majority of creditors (CPF holders) are under special & unique creditor terms such that the debtor (SG govt) can impose unilateral changes in terms & conditions for payback, quantum of payback, interest rates, extension of debt, debt rollovers etc, all wrapped up in the name of protecting the creditors and ensuring the creditors doesn’t spend all his principal money on booze and immoral living.
Therefore, all Singaporeans should be concern how President Nathan has over the last 12 years of tenure has allowed PAP government to dip into reserves 27 times without our knowledge. All these whiles, we have been led to believe the national reserves has only been touched once, only in the last financial crisis. So much cheap talks on “good” governance.
Singaporeans really have to vote carefully for our next President who will "truthfully" give us an annual report or statement on what he has done for the past year, like how much national reserves is being used; the state of our CPF money; new and or re-appointments of key office-holders, and other presidential undertakings and work reports; Singaporeans want fairness, justice, transparency, good governance (not just corporate governance, political governance, but presidential governance too.)