The headline of a Straits Times report said "MAS flags two risks for property buyers". MAS is warning about the risks of a weak economy (which may cause property prices to drop) and a strong economy (which leads to higher interest rates). Property buyers should not be paying high prices which they may not be able to service.
This move is timely to prevent an asset bubble in property - the same type of bubble that caused the collapse of the US and global financial system last year.
Some people think that a free market should be unregulated. This is not correct for many markets where one party, usually the seller, has more information that the other party, usually the buyer, and can take unfair advantage of the buyer. This situation applies to the property market, financial market, insurance market and for many professional services.
For the free market to work well, it has to be regulated to ensure that information is made easily available to all parties and that a code of fair practice and professional ethics is observed. A free market is not one which allows some people can take advantage of other people to make an excessive profit.
There is now a trend towards stronger regulation in America. I hope that this trend is followed in other countries.
Tan Kin Lian
Monday, November 9, 2009
Albert Einstein
Someone asked if I knew Einsten. I knew of him (but he did not know of me). Besides being the genius that discovered the theory of relativity, Einstein was a peace activist and a strong socialist.
He was purported to have created a logic quiz, called the Einstein Intelligence Quiz. I saw this quiz 30 years ago, but could not solve it at that time. I learned how to solve this quiz recently and to create similar quizzes at various levels, including a more difficult level than Einstein's Quiz.
You can buy the TKL Intelligence Quiz books here. Enthusiast can buy volumes 3 and 4 in soft copy (PDF).
He was purported to have created a logic quiz, called the Einstein Intelligence Quiz. I saw this quiz 30 years ago, but could not solve it at that time. I learned how to solve this quiz recently and to create similar quizzes at various levels, including a more difficult level than Einstein's Quiz.
You can buy the TKL Intelligence Quiz books here. Enthusiast can buy volumes 3 and 4 in soft copy (PDF).
Economist and forecast
MM Lee had forecasted the economic growth to be 3% in 2010. A blogger commented that MM is not an economist and questioned how MM got his figures.
I am not an economist myself, but I will also make my own guess. Those who don't like my guess are free to ignore it. They are not required to challenge me.
I never knew that economic forecasting is the purview of economists and that other lesser mortals are not allowed to venture their guess. I am told that if you meet 20 economists, you are likely to get 40 forecasts and most of them are likely to be wrong. So why should this privilege of guessing wrongly belong only to certain people?
Albert Einstein once met a person with an IQ of 160. They discussed quantum physics. He later met someone with an IQ of 110. They discussed engineering. Then, he met someone with an IQ of 70. Einstein asked him, "what is the economic growth likely to be for next year?"
So, here is my guess. Economic growth for 2010 will be 0% to 2%. My guess is lower than MM. Why? I think that the stimulus would have run out and that people will realize that the underlying problems of the global economic system is quite serious. If I am wrong - attribute it to my IQ of 70.
Tan Kin Lian
I am not an economist myself, but I will also make my own guess. Those who don't like my guess are free to ignore it. They are not required to challenge me.
I never knew that economic forecasting is the purview of economists and that other lesser mortals are not allowed to venture their guess. I am told that if you meet 20 economists, you are likely to get 40 forecasts and most of them are likely to be wrong. So why should this privilege of guessing wrongly belong only to certain people?
Albert Einstein once met a person with an IQ of 160. They discussed quantum physics. He later met someone with an IQ of 110. They discussed engineering. Then, he met someone with an IQ of 70. Einstein asked him, "what is the economic growth likely to be for next year?"
So, here is my guess. Economic growth for 2010 will be 0% to 2%. My guess is lower than MM. Why? I think that the stimulus would have run out and that people will realize that the underlying problems of the global economic system is quite serious. If I am wrong - attribute it to my IQ of 70.
Tan Kin Lian
Sunday, November 8, 2009
Have a positive approach
Singaporeans have a critical, negative mindset. This is part of our culture and is brought about by our education system. If we see an idea, we tend to look for what is wrong with it.
I wish to encourage a positive mindset. If we see an idea, we can look for what is the benefit of implementing it, compared with the cost. If the benefit outweigh the cost, we can go ahead. If we are not sure, we can give it a try. We try and see if it works, rather than worry about what could go wrong.
We do not need a perfect solution, before embarking on a change. We only need incremental benefits. So long, as the benefit outweigh the cost of implementing the change, we can go ahead. This is how progress can be achieved.
Many people observed that Singaporeans are not entrepreneurial. They cannot think out of the box. They are afraid of trying. This is part of the mindset and culture that we were brought up with. We know how to criticise, how to find out what is wrong, but we are not bold in making a change and to make things different, to make things better.
But, culture and mindset can be changed. We can be positive. We can be bold. We can be daring to change.
Tan Kin Lian
I wish to encourage a positive mindset. If we see an idea, we can look for what is the benefit of implementing it, compared with the cost. If the benefit outweigh the cost, we can go ahead. If we are not sure, we can give it a try. We try and see if it works, rather than worry about what could go wrong.
We do not need a perfect solution, before embarking on a change. We only need incremental benefits. So long, as the benefit outweigh the cost of implementing the change, we can go ahead. This is how progress can be achieved.
Many people observed that Singaporeans are not entrepreneurial. They cannot think out of the box. They are afraid of trying. This is part of the mindset and culture that we were brought up with. We know how to criticise, how to find out what is wrong, but we are not bold in making a change and to make things different, to make things better.
But, culture and mindset can be changed. We can be positive. We can be bold. We can be daring to change.
Tan Kin Lian
Capitalism flawed
Read this report about a survey of public opinion on capitalism and the free market. I share the same views. I find globalisation and the free market to be bad for ordinary people. It depressed wages and led to wide disparity of income. People have to work harder just to get by.
Land sales are not protected by Financial Services Authority of UK
http://www.guardian.co.uk/money/2009/nov/07/landbanking-investment-scheme
Over the past five years, Guardian Money has warned that, despite taking in tens of millions of pounds from investors, no landbanker has ever delivered the expected profit bonanza that comes with planning permission.
Instead, we have reported how several landbankers have gone bust, including Land Heritage (UK)* and United Land Holdings, leaving buyers with virtually unsellable plots. These investors had no chance of getting their cash back from a compensation scheme, as land sales are not protected by the Financial Services Authority. In 2007 the FSA declared that although it does not regulate land as an investment, "there is a risk that many of these schemes are in breach of the financial regulation regime if they are structured as a 'collective investment scheme'. To operate and promote such a scheme legally, the operators would need to request and obtain authorisation from the FSA, which would then regulate these firms."
Over the past five years, Guardian Money has warned that, despite taking in tens of millions of pounds from investors, no landbanker has ever delivered the expected profit bonanza that comes with planning permission.
Instead, we have reported how several landbankers have gone bust, including Land Heritage (UK)* and United Land Holdings, leaving buyers with virtually unsellable plots. These investors had no chance of getting their cash back from a compensation scheme, as land sales are not protected by the Financial Services Authority. In 2007 the FSA declared that although it does not regulate land as an investment, "there is a risk that many of these schemes are in breach of the financial regulation regime if they are structured as a 'collective investment scheme'. To operate and promote such a scheme legally, the operators would need to request and obtain authorisation from the FSA, which would then regulate these firms."
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