vendredi, juillet 18, 2008

Random reads

I read an article about an interview given by Lee Kuan Yew on the Middle East Times.

One of the questions was : "So how do you see the future of capitalism?" Mr Lee replied : "As chairman of the equivalent of our Sovereign Wealth Fund, we examine and decide where to invest our money, in equities or bonds or what have you. Our fund managers are paid five times what I get. Why? Because they have had good track records in growing our fund and we know what they could command in the private sector. They are dealing with billions of dollars every day and must be compensated accordingly. "

He also added; "So here we also stay with the losers, make sure they have enough to live on, with healthcare, equal education opportunities for their children whose parents can no longer afford it. It's very important they not feel abandoned. So we have workfare and ingenuous ways to keep them working as we don't want layabouts doing nothing. We also subsidize homes which they would not be able to buy. A society can only survive if there is a sense of equity and fair play."

After this article, I read another article about sovereign wealth funds. Temasek was heavily referenced.

Extracted from the article "Barclays is expected to add two new sovereign wealth funds to its existing duo of China Development Bank and Singapore's Temasek, which came on board last July to help the British bank raise its - unsuccessful - bid for ABN Amro. That is in addition to its negotiations with Japanese bank Sumitomo Mitsui Financial, which is expected to invest around £500m as part of a new business relationship with Barclays.

Yet both have already lost more than half their investment, paying 720p a share for their combined 5 per cent stake compared with last week's price of around 320p.

It is not Temasek's only loss: last December, it paid $4.4bn (£2.2bn) for a stake in US banking giant Merrill Lynch; last week, that holding was worth just $3.4bn. "

Are you thinking what I am thinking? Fund managers paid five times more than Mr Lee Kuan Yew while they were losing billions of Singaporean's hard earn money?

As for the subsidize homes, that is another interesting point. I remembered I read a while ago about this subject. However, I could not find back the article. I did however found a similar opinion in
Dairy of a Singaporean Mind.

Below is just an extraction:
Understanding the Market in Market Subsidy

Have you ever wondered what will HDB flats costs if the PAP did not change the rules and allow CPF to be used to pay for them? Have you ever wondered what they will cost if only 12 year housing loans are allowed instead of 25 yr loans?

Since the HDB supplies 70-80% of property market, it is a virtual monopoly. Given that HDB is part of the govt, it also has control of the property market in terms of policy. So Singaporeans are subsidised against a market that is created by the HDB and govt.

Note: If you are interested to read more, click on the hyperlinks. Happy reading.

Aucun commentaire: