Outline for US bailout reached

Just read that the outline for the US $700 billion bailout package has been reached. The gist of it is as follows:

1. First $250billion issued when legislation is enacted
2. Additional $100billion can be added if president decide it is needed
3. Remaining $350billion is subjected to congressional review
4. Institutions selling assets under this plan will need to issue stock warrants to taxpayers
5. No executives in the participating institutions will get multi-million dollar severance pay, and CEO pay that encourages excessive risk-taking will be limited
6. Participating institutions would be supervised by Congress's investigative arm, and an independent inspector general
7. The program itself would be supervised by Fed Reserve chairman, and an oversight board
   
8. Treasury secretary's actions will be reviewed
9. Government can modify the terms of the home loans as they are the owners

The current problem is more of a crisis of confidence than anything else. The package should be agreed in principal soon. If the Republicans delay this package again, it will not help them in the upcoming presidential election, because they will soon see the biggest financial blowout in history.

I agree with Obama... Politics do get in the way of everything.

Sorry state of professionals

The hottest news of this month is definitely the Lehman collapse and the AIG fiasco. This really exposes the level of professionals we have over here.

I have enquired among my friends who have the Lehman Minibonds and I'm appalled at the reply from their bank's RM. It really seems that the word Relationship Manager(RM) is just another new name for salesman!

Apparently, they have asked the RM on the status of the minibond and if they are affected (Lehman has many minibond series), and the reply was that they do not know! The only time that they will know is when the next dividend comes in. If it didn't come in, its a default.

Come on!! This is ridiculous. You sell a product, you don't know the internal workings of the product, and you don't even know when it'll default! If you're selling something, its your responsibility that you know all the important points of the product! It's no excuse that the product is too complicated or complex to understand. If it is, that means you're not meant to sell the product at all, and you should get someone more highly trained to sell this product.

They have interviewed some RMs in today's papers and I'm really appalled that they know nothing about the product that they are selling. The excuse is that its too complicated, too complex to understand, and they are selling too many to know all of it.

Excuse me!! Those really good salesman that I know can memorise all the company's products details and specifications, which can number into almost 50 different types, and can recommend the product based on the customer's different needs.

The latest AIG fiasco is not any better. You have financial advisers from other companies asking people to dump their AIA policies, even though Singapore's MAS has already came out saying that they have strict regulations that ensure that all policies can be paid out in full. My take... Go on and dump if you do not want to heed MAS advice. Those who are holding on to their AIA policies will thank you because they will have more bonus to share among the remaining policyholders.

Every industry has their rotten eggs, and this is not limited to the financial sector. Likewise, there are gems around. However for some stupid reason, I know more about the rotten ones, and very few good ones.

It might be that the training is insufficient, or it might be that the product sucks in the first place. Either case, whether its a big MNC, or a small mom and pap shop, its always the quality that matters.

It amazes me sometimes that some people concentrate on the side dish, and neglects the main dish.

Good or Bad Intentions?

I quote from Edward G. Bulwer-Lytton:

It is difficult to say who do you the most harm: enemies with the worst intentions or friends with the best.


Using a simple example of a smoker, which decision will be more "harmful" to that person? Person A advices this person not to smoke at all? Or Person B lights up a cigarette and smokes together with this person?

Good intentions need not necessary mean that the decision is the easiest. The best intention usually will bring you out of the comfort zone, causing you to make difficult choices. Therefore, do not judge friends based on who treats you the best.

Sometimes the best thing to do is also the hardest thing you can do.

My First Month With My iPhone 3G

Time passes by quickly and it has been a month since I have my iPhone 3G. I'm getting more used to the phone, and I've gotten used to checking the AppStore every now and then. :) Yes, there are alot of free applications in AppStore which you can download. Some people has the misconception that AppStore only has paid applicaitons. That is wrong! AppStore has many free, and I would say quite useful applications/games.

My battery life has settled down to about 2 days for 1 charge. One thing to note here though is that I shutdown my iPhone every night. Its a habit of mine for all my phones.

My usage pattern is slightly above average I think, and it can be quite heavy at times, like checking emails every hour. For my usage time, the maximum I've ever seen was about 7 and a half hours on a charge.

Just to highlight something I've ranted about in this post here. My data usage for the month is *drum roll* ... ... Less than 150MB. Yes, I'm surprised.

After thinking about it, I think I've understood why. These are the reasons:

1. Most of the regular sites/apps I go to daily have very little graphics. Content (word) in websites does not take up much bandwidth.
   
   
2. Next is the misconception I had about emails in the iPhone 3G. When I read the email details, all my attachments do not get downloaded until I tap on it. This is a useful feature because sometimes I do not read all my attachments. I'm more interested in the content of the email. I think the only email which will display the attachment is when you send a graphics attachment. I rarely have these kind of emails though.
   
   
3. Lastly is that I have a habit of connecting to Wifi before I go to AppStore (not all the time). I believe that it helped in lowering my data usage because I've a habit of downloading many apps, and deleting them too. :) I connect to the Wifi when its available as Wifi is still generally faster than 3G.
   

Unless you really like to watch YouTube the whole day on the iPhone, or like to download apps every single day using the 3G, it will be extremely difficult for you to break the 1GB usage barrier.

I would post more about my battery optimisation tips next time. Feeling a little tired today.

Android is just another Linux mobile?

Just saw a gallery post on ZDNet here regarding the new Android phone by HTC. It is already released this week in the US by T-Mobile. Frankly, I wasn't impressed by the pictures. Below is one of the pictures from the post:



It looks exactly like a Linux UI. Granted Android is based on the Linux platform but I expected more jazz in the UI. After all, we're talking about Google.

Will it take off? I have not used it yet but based on my failed attempt to convert my parents to using Linux, I don't think it will take off in the retailer's arena like the iPhone. Speed is one thing, but its useless if the user doesn't know how to use the features. Commercial however, might be a different case. But still, users nowadays are demanding more friendly interfaces than ever before. User-friendliness has became the newest buzz word and seriously, the Android interface doesn't look that appealing. In fact, it seems to be a step backwards.

A pity... I really expected more from Android. Maybe that's the problem. Expectations.

Inflation is up 6.4%

These are the Singapore inflation rates for 2008:
January: 6.6%
February: 6.5%
March: 6.7%
April: 7.5%
May: 7.5%
June: 7.5%
July: 6.5%
August: 6.4%

Food and Housing is leading the charge, rising by 8.4% and 12.8% respectively year on year. Food costs should go down further for September. Increase in housing costs is due to the higher accomodation costs and electricity tarifs.

Finally, as per what I've indicated previously in this post, MAS again revise their inflation forecast to between 6% - 7% for this year. Personally, I do not see inflation going above 7%, and economic growth should be above 4% this year. Inflation should be taming down, provided some governments do not take the chance to create havoc again.

Blank Screen for iPhone 3G Safari

I personally do this for my iPhone 3G because I believe some websites auto-refreshs every x seconds if you stay on that page. Just imagine you hit that page, and you switch off your display to do some other work. The webpage would be reloading every x seconds until you switch on your display again. If that page has alot of graphics, good luck to your data plan, and your battery.

All you need to do to prevent this is to enter about:blank in the Safari URL. For me, I've also added that page as a bookmark, so I could call it as and when I need it.

That's it. This URL is basically just a blank page. Everytime I want to stop viewing a page, I would just activate this bookmark. This is primarily to ensure that no page will keep refreshing without me knowing.

Hope this tip help in your battery life, and your data plan. :)

HDB Assure 3 Warranty

Seems like HDB has a warranty program for those flats built since 2005. Today's news talked about the new flats in Sengkang having this warranty.

Basically, the warranty is called Assure 3, and its a new extended warranty scheme covering the following from the date of completion of the apartment blocks:

Defects	Warranty Period
Ceiling leakages at toilet/ kitchens	Five years
Water seepage from external walls	Five years
Spalling concrete	Ten years

This is on top of the default Defective Liability Period of 1 year that covers any repair of building defects at no cost.

More information can be found here.

iPhone 3G also depends on the provider

Just recently I saw more and more reviews of the iPhone 3G, but some seems to puzzle me because I've encountered no such problems with my iPhone 3G under Singtel. These are some of the problems I've seen encountered by some people:

1. No 3G coverage in many areas
   
2. Time to initialise call is slow
3. Mail can't login into the mail server

I've never encountered any of these severe problems in my usage. The firmware v2.1 has also improved some of the features and stability. For the above problems, my findings are as follows:

1. 3G coverage is excellent in most parts of Singapore except when you're underground
2. Time to call people is comparable with other phones
3. No problem with mail because I constantly use it to reply emails (That's my main usage mode for my iPhone).

I think these problems seem to be more provider specific than iPhone specific. Its not really fair to blame the iPhone for these problems.

Loophole in the exchanges

In my previous post here, I've talked about a loophole in the exchange which all hedge funds and shortists are taking advantage of all over the world. Just today they are finally taking a co-ordinated effort to close this hole. Whether will it be closed remains to be seen.

Let me explain about this loophole.

The exchange is based on a very simple concept (Let's not talk about the complicated portion). I have a company, and it has x number of shares in the market. I can own y shares, and the remaining z shares will be owned by the public, or institutions. But x = y + z. Therefore, since the number of shares are the same in the market (for this example, we'll take it to be the same), the buying and selling will reflect the demand of shares, hence the value of the company could be determined. That's where you start looking at the books, determining the value and its growth rate, etc.

After that, the exchanges introduced the concept of lending shares. That means for my y number of shares, I can choose to lend them out to people to contra or to short. Contra meaning that I will buy first, and sell by a certain time. Short means the opposite, where I will sell first, and buy back by a certain time. This ruling is still ok, reason being x = y + z. The total number of shares will still be x as the shares are lend out by certain shareholders, maybe to create liquidity in the market. The number of shares being constant, and the borrowing of the shares requiring some unfront cost, the value of the company would not be far off as research will still be done. If the value is below the comfortable level of the shareholders, they can always stop lending out the shares.

Now here comes the loophole. The exchanges around the world decided that this is not enough. Therefore, they introduced something called naked shorting. So what does that mean? That means that even though if someone didn't own, or borrow any shares, this person can choose to sell the shares, to bet that the shares will dive. Yes... The exchange has become a gambling den.

There comes the problem that changed the whole rules of the game. That means effectively, at some point of time, there will be a possibility that x != y + z. Shares are created out of thin air by these naked shortists because they do not need to even borrow or own the shares. Even when all the shareholders stop lending out their shares, people can still short the shares to their hearts content.

If anyone can short any company's shares as and when they like, do you think they will take time to think of this company's fundamentals, cashflow, business plan, etc? No. They will just look at the chart and just keep shorting it down as long as the chart says so. That's what happened for the past few days. News started to spread that this bank not well-capitalised, this bank merging with another bank because it's in trouble, etc. It became a self-fulfilling policy because suddenly all the mark-to-market securities owned by banks are all shorted or sold down, regardless whether the rumours are true or not. Even though the banks were initially well-capitalised, the sudden wipe-out of trillions dollars of market value caused these banks to be almost bankrupt overnight.

And guess what? In Singapore, you do not even need to borrow shares to short! The exchange here instead encourage naked short selling by saying that you do not even need to borrow shares to short because they have "rules" to deter them! Like real!

That is why so many hedge funds are based here. They can short to their hearts content. Now you know why the companies listed in our exchanges are so cheap compared to other countries' exchanges?

Like I mentioned in the previous post, if the exchanges around the world still support naked short selling, more and more companies will be either taken private by the own management, or bought over by private equities and taken private. You will also find that all those well-run businesses will shun IPO.

In fact, I'm advising others to go for venture capitalists instead of IPO. It's not worth it because the exchange is not interested in ensuring a fair value for your company. The private investor will value your company better than the exchange.

I hope this incident will trigger some new rules at least, as this fundamentally goes against the concept of the public exchange and shareholders. Just imagine you're selling lemonade, and someone else claims that he/she is selling your leomade and sells it cheaper than you, without actually having the actual lemonade itself.

It totally makes no sense...