Heirs of China's New Elites Schooled in Ancient Values
Washington Post Foreign Service
CIXI, China -- In a borrowed classroom of the provincial Communist Party School, a newly busy philosophy professor addressed 15 well-groomed adult students. His message: Try to have a soul.
"In China, if you are only rich, people will not respect you. You also need good manners, an outgoing personality and good morals," said Zhang Yinghang of Zhejiang University, a professor increasingly in demand on the lecture circuit. "This is what rich children in China lack."
It was opening day of Jiaye Changqing, or "Family Enterprise Lasts Forever," a week-long course for the sons and daughters of rich entrepreneurs -- especially those sons and daughters who are about to inherit the family business. While the course included standard lessons on management strategy, it was also intended to instill traditional Chinese values in a younger generation schooled in Western, capitalist ways.
In other words, there's more to life than making money.
"The school exists partly because of the only-child syndrome, where little emperors and princes were brought up with everything within their sights. They've never shared anything with anyone else," said Luo Yu, 31, a graduate of the class in Cixi who runs his father's factory, which makes $50 million a year selling valves, pumps and gear boxes to the United States.
Once ridiculed and looked down on, entrepreneurs are now among China's elite. Along the way to wealth, however, many have neglected to show their children what they consider the proper way to behave. Now that they want to make sure their offspring are fit to take charge, courses such as Jiaye Changqing are growing popular.
Like many newly rich Chinese, the parents of the students at Jiaye Changqing have worked hard and relied on friends and relatives as business contacts. They have also ridden a wave of economic reform that over the past 20 years has transformed China.
Their children are better educated but unaccustomed to hardship. They spend money freely and return home from studying abroad with strange ideas such as networking with outsiders. Half the students in the course have studied abroad, including one woman who has jetted back and forth to China since age 7 and understood only part of Zhang's lecture.
"Entrepreneurs are leading where society is going, and if this group doesn't understand Chinese culture, it will be very bad for society," Zhang said. "People will be less and less happy, even though they have more and more money."
The founder of Jiaye Changqing, an entrepreneur himself, saw this firsthand.
In crisscrossing China to tell his own success story, Mao Lixiang frequently met tearful parents who didn't know what to do with their children. One son from Anhui province didn't want to study. A scion from a family in Zhejiang province wanted only the best clothes and the fastest cars. Other children simply weren't interested in inheriting their parents' businesses, even though most Chinese who work in the private sector do so for family-controlled companies.
"The badly behaved children don't make up a huge number, but their influence is great and it gives rich people a bad image," said Mao, 67, who began his career as an impoverished, "barefoot" teacher with a high school education. He is now board chairman of Ningbo Fotile Kitchenware, a $178 million appliance company.
Mao made his fortune selling lighters and gave his first company to his daughter. He handed off his appliance company to his son. Now his focus is the school, which he hopes to expand to teach parents and their children.
"Blood is thicker than water. Most Chinese hope their legacy will live on through their children's lives and careers. Every entrepreneur dreams this," said Chen Ling, an economics professor at Zhejiang University, which offers a training course for family-run businesses.
Luo Yu, for one, didn't share the family dream. His father started the Cixi Huili Machinery & Electric Co. here in Zhejiang with 30 people in 1988. The company now has 1,100 employees and $50 million in annual revenue.
"When I graduated from university, I had plenty of my own very good ideas. I was very farsighted," said Luo, now general manager of the company. "In 1996, I noticed Cixi didn't have a good florist shop. In 1997, no Internet cafe. In 1999, no coffee bar. All of these things had potential, but my father did not agree."
Gradually, Luo said, he saw his father's sacrifices and understood the importance of a family business. "Why should we give away what we earn through such backbreaking effort to someone else not in the family and in poverty?" the former Jiaye Changqing student said.
Meanwhile, Zhang, who seven years ago couldn't get graduate students at Zhejiang University, has achieved popularity through his lectures at Jiaye Changqing.
For the past year, he has told students that Bill Gates read ancient Chinese classics in middle school. In college, he said, Gates refused to sacrifice anymore sleep to accommodate both his company and his studies. "You should comply with the natural law. . . . Don't be so utilitarian," he said.
His students don't always agree. "I think for doing business, utilitarianism and a focus on the bottom line is good," said Ruan Shengliang, 23, who runs a shoe factory in China's southern Guangdong province. "While treating people well and giving them what they want, a businessman also needs to get back what he ought to get."
While older Chinese are trying to impart business lessons to their children, the education sometimes works the other way. Many young Chinese are teaching their parents, for instance, that casual networking with peers can be just as effective as relying on family.
Dong Ming, 26, is vice manager of his father's 400-employee metal machinery factory in nearby Chengzhou. While his father networks at the dinner table, Dong chats online or goes to karaoke bars and teahouses with about 30 friends, all children of wealthy entrepreneurs.
"My father's network is limited by his primary school education," Dong said. "It's mainly clients, government and his entrepreneur friends. Whenever he dined with officials and clients, he asked me to join him. It's important. But I should build my own network. I make friends with the media, with scholars and young people at my own age. You get new ideas from them."
That said, Dong acknowledges the importance of his father's ways and the limits of money.
"To people who already have enough money, $10 million or $100 million doesn't make a lot of difference. We can buy more luxury goods, but actually we can't consume it all. A man driving a BMW who still spits on the road, people will despise him. So money is not the most important thing," Dong said. "My father made our factory the most powerful in our township or city, but I hope to make it influential and respectable within the industry."
Invest US$1,000 ($1,461) and get back US$250 every month. It sounded like an attractive 'investment', but man loses $1,500 in 'investment scheme'. Alvin Chiang
Sat, Dec 22, 2007 The New Paper
INVEST US$1,000 ($1,461) and get back US$250 every month.
It sounded like an attractive 'investment', so music teacher G Joseph, 59, signed up.
He forked out US$2,000 last November and was hoping to enjoy the attractive returns from the Swiss Mutual Fund.
ALLEGED SCAM
Known also as SwissCash, it is an alleged scam in Malaysia.
But Mr Joseph didn't realise this till it was too late. He has now lost US$1,000.
He said he found out about SwissCash last November when a man named Alfred called him and invited him to attend a seminar.
Mr Joseph believes the people behind the scheme could have got his number from newspaper advertisements for his music lessons.
The seminar, he said, was conducted last year in a building in Geylang by a man named Kenneth.
Mr Joseph said: 'Kenneth joined the fund for a year and he said he got back his principal sum.'
He added that at the seminar, 'there were people who talked about how they have been receiving money every month'.
'I was even given a nice book to show how the scheme works. I was impressed.'
At a 25 per cent return rate, Mr Joseph invested US$2,000 and got back US$1,000 over two months deposited into his bank account.
After the first two months, Mr Joseph was told that there would not be any payouts for the next 10 months.
He said: 'I was told that the next payout will be on October 2007. I would get back the outstanding interest payments then. October came and went but I received nothing at all.'
He contacted Alfred and Kenneth but the men claimed that they do not know anything.
Mr Joseph, whose monthly income is about $2,500, realised he could have been cheated after he submitted a form online confirming he was an investor.
But he didn't get any money even after that.
He said: 'I didn't know this would happen. I thought it was a good investment opportunity.'
Last year, two Malaysian datuks and six others aided Malaysian authorities in investigations into SwissCash.
They were placed in remand, reported The Business Times.
SwissCash claimed that investors' funds were channelled to business activities ranging from oil exploration to shipping and agriculture in the Caribbean.
GOLDMAN SACHS TRADERS TURN MORTGAGE CRISIS INTO $5.8b PROFIT
Mystery men make killing off mortgage misery
December 21, 2007
THE average employee at investment bank Goldman Sachs will take home US$397,000 ($580,000) in year-end bonuses this year, reported USA Today.
And they have three mysterious, low-key colleagues to thank for it.
The three young guns - none of whom are over 40 - themselves are in line for bonuses of about US$10 million apiece from a record bonus pool at Goldman of about US$19 billion.
As the property market crumbled around them - with house prices plummeting on both sides of the Atlantic and a surge in the number of homeowners facing repossession - the three New York traders created a whopping US$4b profit opportunity for their company, hitting the biggest jackpot in the history of Wall Street.
Their identities were unmasked yesterday, prompting a wave of adulation and envy among their colleagues, reported The Independent.
It has also resulted in another bout of handwringing over Wall Street's ability to make multibillion-dollar profits even as millions of ordinary people face losing their homes.
BIG BETS
The three men - MrDan Sparks, MrJosh Birnbaum and MrMichael 'Swenny' Swenson - placed giant bets against the US mortgage market at the start of the year and watched their winnings tick higher and higher as the rising numbers of mortgage defaults spiralled into a worldwide financial crisis.
Through the year, they battled cautious bosses who feared the bets were too big and dangerous.
But thanks to their derring-do and persistence, their firm will stand alone on Wall Street, where rivals have suffered huge losses from the credit market meltdown.
It's a huge pay out for them, but the trio are not celebrating it - at least not openly.
Said a company source: 'They are very embarrassed that their names have come out.
'Until now, nobody had heard of them, including most of the people on the floor where they work.'
The Wall Street Journal, the bible of the New York finance industry, revealed yesterday how the three would forgo lunch breaks, weekend trips with their families and even sleep to keep on top of positions.
They reportedly had to engage in a running battle to keep their bets from being whittled away by more conservative risk managers.
At one point in February an angry MrBirnbaum reportedly shouted that it was 'the wrong time' to be cutting the bets.
He was overruled.
But the decision was reversed and the bets ratcheted back up later in the year.
Their US$4b success has more than mitigated other losses on mortgages, and could propel them into an elite group of legendary traders.
But on the other side of success may loom a public relations nightmare.
STOCKS FALL
Goldman, which saw stock falling yesterday despite posting record profits, is trying to downplay the scale of the risks taken by the mortgage trading desk.
It said that most of the trades were designed to reduce the risk of opposite holdings elsewhere in the business and that the plans were being carefully directed from above.
The bank has also been trying to limit the political fallout from revelations that it made giant profits from a financial crisis that could see millions of Americans forced out of their homes and plunge the rest of the economy into a recession.
MrChris Dodd, a candidate for the Democratic party presidential nomination and head of the Senate's banking committee, has threatened to investigate Goldman's behaviour.
Wall Street banks have been fingered as a major cause of the credit crisis because of their insatiable demand for mortgages which they repackage into a dizzying array of complex financial instruments.
Goldman's traders positioned themselves for a crash by betting against some of those instruments - even while other parts of the mortgage business spent the first half of the year creating and selling new ones to investors.
Meanwhile, independent mortgage brokers were pushing unsuitable loans on to low-income Americans who may not now be able to pay them back.
Mr Dodd said he was concerned because it appeared that Goldman Sachs was 'aggressively pushing sub-prime mortgages that they knew to be of concern while simultaneously shorting mortgage derivatives'.
Singapore's Nov. Inflation Accelerates to Highest in 25 Years
By Shamim Adam
Dec. 24 (Bloomberg) -- Singapore's inflation accelerated in November to the highest in 25 years as consumers paid more for food and transportation.
The consumer price index jumped 4.2 percent from a year earlier, after gaining 3.6 percent in October, the Department of Statistics said today. The figure, the highest since May 1982, exceeded the median estimate of 15 economists surveyed by Bloomberg News for a 3.8 percent gain. Prices rose 0.6 percent from October.
The Monetary Authority of Singapore expects consumer prices to rise next year at more than double the 2007 pace, suggesting it will allow the currency to strengthen further to curb consumer price gains. The central bank in October said it would allow a ``slightly'' faster appreciation in the Singapore dollar to damp decade-high inflation by making imports cheaper.
``We are seeing broad-based increases in inflation, not just in one or two items,'' said Kit Wei Zheng, an economist at Citigroup Inc. in Singapore. ``We'll see more inflation pressures in December and January, and the bias is towards further appreciation in the currency.''
Policy makers expect inflation in 2007 to average about 2 percent, up from a previous range of between 1.5 percent and 2 percent. Consumer prices may rise between 3.5 percent and 4.5 percent next year, the central bank said.
Currency to Strengthen
The Singapore dollar has gained 5.4 percent this year. The central bank seeks to keep the dollar from rising or falling outside an undisclosed band based on a basket of currencies of the city's biggest trading partners.
The central bank has sought a ``gradual and modest'' strengthening in the currency since April 2004 and said Oct. 10 it will ``increase slightly the slope of the policy band.''
Food prices, which make up 23 percent of the index, rose 5.2 percent in November from a year earlier, following October's 4.3 percent increase. From October, food prices gained 1.1 percent.
Bus fares have increased in recent months, while the government has also raised road tariffs for motorists, resulting in an increase in transportation costs.
Transport and communication costs, the second-biggest component at 22 percent of the index, climbed 5.6 percent in November from a year earlier. From October, transport and communication prices rose 0.1 percent.
Inflation Pressures
Housing costs, the third-largest component of the consumer price index, climbed 2.9 percent from a year ago, after a 2.3 percent gain in October, today's report showed. From a month ago, housing prices rose 0.7 percent.
Recreation costs, which include holiday travel, gained 4.1 percent in November from a year earlier and rose 0.6 percent from the previous month. Prices of clothing and footwear rose 1.4 percent from a year earlier and gained 1.8 percent from October.
Inflation pressures are likely to increase as companies pass on rising business costs, economists said. Average monthly wages climbed 6.9 percent last quarter, after rising 8.5 percent in the previous three months, the government said this month.
``Inflation expectations may become more entrenched in wages as employees demand higher pay increases to keep up with rising prices,'' Zheng said. ``At some point, businesses may have to pass these costs on to consumers.''
Middle class Singaporeans are giving the government the thumbs down despite Minister Mentor Lee Kuan Yew’s prediction of a golden era in the coming years.
A SUCCESSION of unpopular policies – incredibly ill-timed, if not ill-planned – has reduced the government’s public popularity to the lowest level in many years.
It is ironic because the economy and the job market are on a roll, which should have resulted in a high level of optimism and improved feelings for the ruling People’s Action Party.
Instead the opposite is happening.
The sentiments among middle class Singaporeans have reached one of their lowest points despite Minister Mentor Lee Kuan Yew’s prediction of a “golden era” in the coming years.
Four recent factors have caused the plunge in public unhappiness.
(1) Cabinet’s 21% pay rise
The decision to raise the salaries of Cabinet ministers, already by far the highest in the world, by a whopping 21%, could not have come at a more painful time for Singaporeans who are struggling with widespread price increases.
(2) GST increases
The July increase in the Goods and Services Tax (GST) from 5% to 7%, led to an orgy of price increases covering most goods and services in Singapore.
The current inflation, the worst in 12 years, is partly imported but is blamed on the government because it has been increasing public fees, ranging from healthcare to stamps.
(3) Abandoned annuities scheme
After a public backlash, the government had to redraw a plan that would have Singaporeans put a part of their CPF (Central Provident Fund) into an annuities scheme that will pay S$250-S$300 (RM575-RM690) a month until death – or when they reach 85.
It was hugely unpopular because of the late drawdown (only 60,000 Singaporeans live that long) and, if the holder dies before 85, the unused money goes to others in the pool, not to his estate.
It was arguably one of the worst ideas from the PAP government and was abandoned. A new scheme is being considered to replace it.
(4) Shortage, over-crowdedness.
The gathering foreign influx (which has pushed the population to 4.68 million) is beginning to cause resentment – mostly against the government – as well as over-crowding and some shortages.
Singaporeans are likely to continue to have to bear and grin it since, like inflation, it is likely to continue into future years.
Shaping into the hottest topic is, however, the Cabinet pay rise – the second in two years – which would have brought down a government in most other countries.
It raised the Prime Minister Lee Hsien Loong’s annual salary to S$3.76mil (RM8.64mil) and President S.R. Nathan’s to S$3.87mil (RM8.89mil), while Cabinet ministers start at $1.96mil (RM4.50mil) a year.
(By comparison, US President George W Bush earns an annual salary of US$400,000 (RM1.3mil) or one-seventh of what Lee gets).
Despite their compliant nature, Singaporeans have reacted angrily to the way their leaders pay themselves, feelings that I have not encountered in 25 years’ of reporting Singapore.
Even PAP supporters are wondering why their political leaders have embarked on such an obviously politically dangerous course.
“The question is why? Why would people, very smart and talented people, with all the money in the world to spend, money they are not likely to finish spending in their whole life, still crave for more money?” a blogger asked.
Another said: “Actually if they can justify it well, I wouldn’t mind them getting more pay, but where is the justification? Many people here earn in a month less than what a minister gets in just half a day.”
The year-end vibrancy of the top leaders who are benefiting from the windfall, contrasts sharply with a despondent mood among the poorer heartlanders badly hit by rising prices.
More people have been asking their members of Parliament for help. Reports of rising poverty have prompted one minister to say: “In Singapore, no one needs to starve.”
For months Singaporeans have felt pressured by the growing impact of the increasing number of foreigners here, including over-crowding and shortages, not to mention a reduction of opportunities.
For the government, this souring of the electorate’s mood is worrying because it is over major bread-and-butter matters – prices, retirement savings, jobs – which can erode its power base.
One of Singapore’s most admired writers, Catherine Lim, has added her voice to the public criticism on the way Singapore is heading.
A climate of fear that stops citizens from speaking out against the government could eventually lead to the decline of Singapore, she said.
Lim praised the government for its economic achievements but said its Achilles’ heel could be its suppression of criticism, using defamation suits against opposition politicians as well as bans on protests.
“A compliant, fearful population that has never learnt to be politically savvy could spell the doom of Singapore,” Lim told Reuters in an interview.
The 65-year-old Malaysian-born author said the worst-case scenario would be for a future leader to get away with corruption “because of the ingrained, unquestioning trust of a fearful, overly dependent people”.
Lim said: “You could have a case of younger Singaporeans creating unrest because they do not have an outlet.
“What Singapore wants is managed creativity. So, not only would those really creative people not want to come, but those who are here want to get out.”
7 comments:
Heirs of China's New Elites Schooled in Ancient Values
Washington Post Foreign Service
CIXI, China -- In a borrowed classroom of the provincial Communist Party School, a newly busy philosophy professor addressed 15 well-groomed adult students. His message: Try to have a soul.
"In China, if you are only rich, people will not respect you. You also need good manners, an outgoing personality and good morals," said Zhang Yinghang of Zhejiang University, a professor increasingly in demand on the lecture circuit. "This is what rich children in China lack."
It was opening day of Jiaye Changqing, or "Family Enterprise Lasts Forever," a week-long course for the sons and daughters of rich entrepreneurs -- especially those sons and daughters who are about to inherit the family business. While the course included standard lessons on management strategy, it was also intended to instill traditional Chinese values in a younger generation schooled in Western, capitalist ways.
In other words, there's more to life than making money.
"The school exists partly because of the only-child syndrome, where little emperors and princes were brought up with everything within their sights. They've never shared anything with anyone else," said Luo Yu, 31, a graduate of the class in Cixi who runs his father's factory, which makes $50 million a year selling valves, pumps and gear boxes to the United States.
Once ridiculed and looked down on, entrepreneurs are now among China's elite. Along the way to wealth, however, many have neglected to show their children what they consider the proper way to behave. Now that they want to make sure their offspring are fit to take charge, courses such as Jiaye Changqing are growing popular.
Like many newly rich Chinese, the parents of the students at Jiaye Changqing have worked hard and relied on friends and relatives as business contacts. They have also ridden a wave of economic reform that over the past 20 years has transformed China.
Their children are better educated but unaccustomed to hardship. They spend money freely and return home from studying abroad with strange ideas such as networking with outsiders. Half the students in the course have studied abroad, including one woman who has jetted back and forth to China since age 7 and understood only part of Zhang's lecture.
"Entrepreneurs are leading where society is going, and if this group doesn't understand Chinese culture, it will be very bad for society," Zhang said. "People will be less and less happy, even though they have more and more money."
The founder of Jiaye Changqing, an entrepreneur himself, saw this firsthand.
In crisscrossing China to tell his own success story, Mao Lixiang frequently met tearful parents who didn't know what to do with their children. One son from Anhui province didn't want to study. A scion from a family in Zhejiang province wanted only the best clothes and the fastest cars. Other children simply weren't interested in inheriting their parents' businesses, even though most Chinese who work in the private sector do so for family-controlled companies.
"The badly behaved children don't make up a huge number, but their influence is great and it gives rich people a bad image," said Mao, 67, who began his career as an impoverished, "barefoot" teacher with a high school education. He is now board chairman of Ningbo Fotile Kitchenware, a $178 million appliance company.
Mao made his fortune selling lighters and gave his first company to his daughter. He handed off his appliance company to his son. Now his focus is the school, which he hopes to expand to teach parents and their children.
"Blood is thicker than water. Most Chinese hope their legacy will live on through their children's lives and careers. Every entrepreneur dreams this," said Chen Ling, an economics professor at Zhejiang University, which offers a training course for family-run businesses.
Luo Yu, for one, didn't share the family dream. His father started the Cixi Huili Machinery & Electric Co. here in Zhejiang with 30 people in 1988. The company now has 1,100 employees and $50 million in annual revenue.
"When I graduated from university, I had plenty of my own very good ideas. I was very farsighted," said Luo, now general manager of the company. "In 1996, I noticed Cixi didn't have a good florist shop. In 1997, no Internet cafe. In 1999, no coffee bar. All of these things had potential, but my father did not agree."
Gradually, Luo said, he saw his father's sacrifices and understood the importance of a family business. "Why should we give away what we earn through such backbreaking effort to someone else not in the family and in poverty?" the former Jiaye Changqing student said.
Meanwhile, Zhang, who seven years ago couldn't get graduate students at Zhejiang University, has achieved popularity through his lectures at Jiaye Changqing.
For the past year, he has told students that Bill Gates read ancient Chinese classics in middle school. In college, he said, Gates refused to sacrifice anymore sleep to accommodate both his company and his studies. "You should comply with the natural law. . . . Don't be so utilitarian," he said.
His students don't always agree. "I think for doing business, utilitarianism and a focus on the bottom line is good," said Ruan Shengliang, 23, who runs a shoe factory in China's southern Guangdong province. "While treating people well and giving them what they want, a businessman also needs to get back what he ought to get."
While older Chinese are trying to impart business lessons to their children, the education sometimes works the other way. Many young Chinese are teaching their parents, for instance, that casual networking with peers can be just as effective as relying on family.
Dong Ming, 26, is vice manager of his father's 400-employee metal machinery factory in nearby Chengzhou. While his father networks at the dinner table, Dong chats online or goes to karaoke bars and teahouses with about 30 friends, all children of wealthy entrepreneurs.
"My father's network is limited by his primary school education," Dong said. "It's mainly clients, government and his entrepreneur friends. Whenever he dined with officials and clients, he asked me to join him. It's important. But I should build my own network. I make friends with the media, with scholars and young people at my own age. You get new ideas from them."
That said, Dong acknowledges the importance of his father's ways and the limits of money.
"To people who already have enough money, $10 million or $100 million doesn't make a lot of difference. We can buy more luxury goods, but actually we can't consume it all. A man driving a BMW who still spits on the road, people will despise him. So money is not the most important thing," Dong said. "My father made our factory the most powerful in our township or city, but I hope to make it influential and respectable within the industry."
Researcher Li Jie contributed to this report.
往事只能回味
Memories of Singapore — Singapore in the '60s
Have you heard of SwissCash?
I thought it was a good opportunity
Invest US$1,000 ($1,461) and get back US$250 every month. It sounded like an attractive 'investment', but man loses $1,500 in 'investment scheme'.
Alvin Chiang
Sat, Dec 22, 2007
The New Paper
INVEST US$1,000 ($1,461) and get back US$250 every month.
It sounded like an attractive 'investment', so music teacher G Joseph, 59, signed up.
He forked out US$2,000 last November and was hoping to enjoy the attractive returns from the Swiss Mutual Fund.
ALLEGED SCAM
Known also as SwissCash, it is an alleged scam in Malaysia.
But Mr Joseph didn't realise this till it was too late. He has now lost US$1,000.
He said he found out about SwissCash last November when a man named Alfred called him and invited him to attend a seminar.
Mr Joseph believes the people behind the scheme could have got his number from newspaper advertisements for his music lessons.
The seminar, he said, was conducted last year in a building in Geylang by a man named Kenneth.
Mr Joseph said: 'Kenneth joined the fund for a year and he said he got back his principal sum.'
He added that at the seminar, 'there were people who talked about how they have been receiving money every month'.
'I was even given a nice book to show how the scheme works. I was impressed.'
At a 25 per cent return rate, Mr Joseph invested US$2,000 and got back US$1,000 over two months deposited into his bank account.
After the first two months, Mr Joseph was told that there would not be any payouts for the next 10 months.
He said: 'I was told that the next payout will be on October 2007. I would get back the outstanding interest payments then. October came and went but I received nothing at all.'
He contacted Alfred and Kenneth but the men claimed that they do not know anything.
Mr Joseph, whose monthly income is about $2,500, realised he could have been cheated after he submitted a form online confirming he was an investor.
But he didn't get any money even after that.
He said: 'I didn't know this would happen. I thought it was a good investment opportunity.'
Last year, two Malaysian datuks and six others aided Malaysian authorities in investigations into SwissCash.
They were placed in remand, reported The Business Times.
SwissCash claimed that investors' funds were channelled to business activities ranging from oil exploration to shipping and agriculture in the Caribbean.
GOLDMAN SACHS TRADERS TURN MORTGAGE CRISIS INTO $5.8b PROFIT
Mystery men make killing off mortgage misery
December 21, 2007
THE average employee at investment bank Goldman Sachs will take home US$397,000 ($580,000) in year-end bonuses this year, reported USA Today.
And they have three mysterious, low-key colleagues to thank for it.
The three young guns - none of whom are over 40 - themselves are in line for bonuses of about US$10 million apiece from a record bonus pool at Goldman of about US$19 billion.
As the property market crumbled around them - with house prices plummeting on both sides of the Atlantic and a surge in the number of homeowners facing repossession - the three New York traders created a whopping US$4b profit opportunity for their company, hitting the biggest jackpot in the history of Wall Street.
Their identities were unmasked yesterday, prompting a wave of adulation and envy among their colleagues, reported The Independent.
It has also resulted in another bout of handwringing over Wall Street's ability to make multibillion-dollar profits even as millions of ordinary people face losing their homes.
BIG BETS
The three men - MrDan Sparks, MrJosh Birnbaum and MrMichael 'Swenny' Swenson - placed giant bets against the US mortgage market at the start of the year and watched their winnings tick higher and higher as the rising numbers of mortgage defaults spiralled into a worldwide financial crisis.
Through the year, they battled cautious bosses who feared the bets were too big and dangerous.
But thanks to their derring-do and persistence, their firm will stand alone on Wall Street, where rivals have suffered huge losses from the credit market meltdown.
It's a huge pay out for them, but the trio are not celebrating it - at least not openly.
Said a company source: 'They are very embarrassed that their names have come out.
'Until now, nobody had heard of them, including most of the people on the floor where they work.'
The Wall Street Journal, the bible of the New York finance industry, revealed yesterday how the three would forgo lunch breaks, weekend trips with their families and even sleep to keep on top of positions.
They reportedly had to engage in a running battle to keep their bets from being whittled away by more conservative risk managers.
At one point in February an angry MrBirnbaum reportedly shouted that it was 'the wrong time' to be cutting the bets.
He was overruled.
But the decision was reversed and the bets ratcheted back up later in the year.
Their US$4b success has more than mitigated other losses on mortgages, and could propel them into an elite group of legendary traders.
But on the other side of success may loom a public relations nightmare.
STOCKS FALL
Goldman, which saw stock falling yesterday despite posting record profits, is trying to downplay the scale of the risks taken by the mortgage trading desk.
It said that most of the trades were designed to reduce the risk of opposite holdings elsewhere in the business and that the plans were being carefully directed from above.
The bank has also been trying to limit the political fallout from revelations that it made giant profits from a financial crisis that could see millions of Americans forced out of their homes and plunge the rest of the economy into a recession.
MrChris Dodd, a candidate for the Democratic party presidential nomination and head of the Senate's banking committee, has threatened to investigate Goldman's behaviour.
Wall Street banks have been fingered as a major cause of the credit crisis because of their insatiable demand for mortgages which they repackage into a dizzying array of complex financial instruments.
Goldman's traders positioned themselves for a crash by betting against some of those instruments - even while other parts of the mortgage business spent the first half of the year creating and selling new ones to investors.
Meanwhile, independent mortgage brokers were pushing unsuitable loans on to low-income Americans who may not now be able to pay them back.
Mr Dodd said he was concerned because it appeared that Goldman Sachs was 'aggressively pushing sub-prime mortgages that they knew to be of concern while simultaneously shorting mortgage derivatives'.
Singapore's Nov. Inflation Accelerates to Highest in 25 Years
By Shamim Adam
Dec. 24 (Bloomberg) -- Singapore's inflation accelerated in November to the highest in 25 years as consumers paid more for food and transportation.
The consumer price index jumped 4.2 percent from a year earlier, after gaining 3.6 percent in October, the Department of Statistics said today. The figure, the highest since May 1982, exceeded the median estimate of 15 economists surveyed by Bloomberg News for a 3.8 percent gain. Prices rose 0.6 percent from October.
The Monetary Authority of Singapore expects consumer prices to rise next year at more than double the 2007 pace, suggesting it will allow the currency to strengthen further to curb consumer price gains. The central bank in October said it would allow a ``slightly'' faster appreciation in the Singapore dollar to damp decade-high inflation by making imports cheaper.
``We are seeing broad-based increases in inflation, not just in one or two items,'' said Kit Wei Zheng, an economist at Citigroup Inc. in Singapore. ``We'll see more inflation pressures in December and January, and the bias is towards further appreciation in the currency.''
Policy makers expect inflation in 2007 to average about 2 percent, up from a previous range of between 1.5 percent and 2 percent. Consumer prices may rise between 3.5 percent and 4.5 percent next year, the central bank said.
Currency to Strengthen
The Singapore dollar has gained 5.4 percent this year. The central bank seeks to keep the dollar from rising or falling outside an undisclosed band based on a basket of currencies of the city's biggest trading partners.
The central bank has sought a ``gradual and modest'' strengthening in the currency since April 2004 and said Oct. 10 it will ``increase slightly the slope of the policy band.''
Food prices, which make up 23 percent of the index, rose 5.2 percent in November from a year earlier, following October's 4.3 percent increase. From October, food prices gained 1.1 percent.
Bus fares have increased in recent months, while the government has also raised road tariffs for motorists, resulting in an increase in transportation costs.
Transport and communication costs, the second-biggest component at 22 percent of the index, climbed 5.6 percent in November from a year earlier. From October, transport and communication prices rose 0.1 percent.
Inflation Pressures
Housing costs, the third-largest component of the consumer price index, climbed 2.9 percent from a year ago, after a 2.3 percent gain in October, today's report showed. From a month ago, housing prices rose 0.7 percent.
Recreation costs, which include holiday travel, gained 4.1 percent in November from a year earlier and rose 0.6 percent from the previous month. Prices of clothing and footwear rose 1.4 percent from a year earlier and gained 1.8 percent from October.
Inflation pressures are likely to increase as companies pass on rising business costs, economists said. Average monthly wages climbed 6.9 percent last quarter, after rising 8.5 percent in the previous three months, the government said this month.
``Inflation expectations may become more entrenched in wages as employees demand higher pay increases to keep up with rising prices,'' Zheng said. ``At some point, businesses may have to pass these costs on to consumers.''
Public cry foul over recent policies
Saturday December 22, 2007
Insight: Down South
By SEAH CHIANG NEE
Middle class Singaporeans are giving the government the thumbs down despite Minister Mentor Lee Kuan Yew’s prediction of a golden era in the coming years.
A SUCCESSION of unpopular policies – incredibly ill-timed, if not ill-planned – has reduced the government’s public popularity to the lowest level in many years.
It is ironic because the economy and the job market are on a roll, which should have resulted in a high level of optimism and improved feelings for the ruling People’s Action Party.
Instead the opposite is happening.
The sentiments among middle class Singaporeans have reached one of their lowest points despite Minister Mentor Lee Kuan Yew’s prediction of a “golden era” in the coming years.
Four recent factors have caused the plunge in public unhappiness.
(1) Cabinet’s 21% pay rise
The decision to raise the salaries of Cabinet ministers, already by far the highest in the world, by a whopping 21%, could not have come at a more painful time for Singaporeans who are struggling with widespread price increases.
(2) GST increases
The July increase in the Goods and Services Tax (GST) from 5% to 7%, led to an orgy of price increases covering most goods and services in Singapore.
The current inflation, the worst in 12 years, is partly imported but is blamed on the government because it has been increasing public fees, ranging from healthcare to stamps.
(3) Abandoned annuities scheme
After a public backlash, the government had to redraw a plan that would have Singaporeans put a part of their CPF (Central Provident Fund) into an annuities scheme that will pay S$250-S$300 (RM575-RM690) a month until death – or when they reach 85.
It was hugely unpopular because of the late drawdown (only 60,000 Singaporeans live that long) and, if the holder dies before 85, the unused money goes to others in the pool, not to his estate.
It was arguably one of the worst ideas from the PAP government and was abandoned. A new scheme is being considered to replace it.
(4) Shortage, over-crowdedness.
The gathering foreign influx (which has pushed the population to 4.68 million) is beginning to cause resentment – mostly against the government – as well as over-crowding and some shortages.
Singaporeans are likely to continue to have to bear and grin it since, like inflation, it is likely to continue into future years.
Shaping into the hottest topic is, however, the Cabinet pay rise – the second in two years – which would have brought down a government in most other countries.
It raised the Prime Minister Lee Hsien Loong’s annual salary to S$3.76mil (RM8.64mil) and President S.R. Nathan’s to S$3.87mil (RM8.89mil), while Cabinet ministers start at $1.96mil (RM4.50mil) a year.
(By comparison, US President George W Bush earns an annual salary of US$400,000 (RM1.3mil) or one-seventh of what Lee gets).
Despite their compliant nature, Singaporeans have reacted angrily to the way their leaders pay themselves, feelings that I have not encountered in 25 years’ of reporting Singapore.
Even PAP supporters are wondering why their political leaders have embarked on such an obviously politically dangerous course.
“The question is why? Why would people, very smart and talented people, with all the money in the world to spend, money they are not likely to finish spending in their whole life, still crave for more money?” a blogger asked.
Another said: “Actually if they can justify it well, I wouldn’t mind them getting more pay, but where is the justification? Many people here earn in a month less than what a minister gets in just half a day.”
The year-end vibrancy of the top leaders who are benefiting from the windfall, contrasts sharply with a despondent mood among the poorer heartlanders badly hit by rising prices.
More people have been asking their members of Parliament for help. Reports of rising poverty have prompted one minister to say: “In Singapore, no one needs to starve.”
For months Singaporeans have felt pressured by the growing impact of the increasing number of foreigners here, including over-crowding and shortages, not to mention a reduction of opportunities.
For the government, this souring of the electorate’s mood is worrying because it is over major bread-and-butter matters – prices, retirement savings, jobs – which can erode its power base.
One of Singapore’s most admired writers, Catherine Lim, has added her voice to the public criticism on the way Singapore is heading.
A climate of fear that stops citizens from speaking out against the government could eventually lead to the decline of Singapore, she said.
Lim praised the government for its economic achievements but said its Achilles’ heel could be its suppression of criticism, using defamation suits against opposition politicians as well as bans on protests.
“A compliant, fearful population that has never learnt to be politically savvy could spell the doom of Singapore,” Lim told Reuters in an interview.
The 65-year-old Malaysian-born author said the worst-case scenario would be for a future leader to get away with corruption “because of the ingrained, unquestioning trust of a fearful, overly dependent people”.
Lim said: “You could have a case of younger Singaporeans creating unrest because they do not have an outlet.
“What Singapore wants is managed creativity. So, not only would those really creative people not want to come, but those who are here want to get out.”
重庆圣诞平安夜武警护航
2007年12月25日
Post a Comment