Jurong Lake Centre Of Dragon Boat Racing Action

Source : Channel NewsAsia, 23 September 2007

The serene waters of Jurong Lake were stirred up this weekend as paddlers battled it out in this year's National 5-Crew Dragon Boat Challenge.

The boats in the competition were smaller and narrower than the normal dragon racing boats so balance and power were vital to speed through the 250-metre course.

Steering is by the coxswain using a paddle whereas a long rudder is used on the usual 10- and 20-crew boats.

More than 600 dragon boaters took part in the two-day challenge, organised by the People's Association. - CNA/so

Dialogue On CPF Reforms Focuses On Whys And Hows Of Changes

Source : Channel NewsAsia, 23 September 2007

A dialogue session on Sunday with Prime Minister Lee Hsien Loong and five ministers focused on the hows and whys of the recent CPF changes.

Issues like why the interest rate hike was just 1 percentage point and why there was no opt-out clause for the annuity were brought up and addressed.

To provide life-long income to those who may live beyond 85, the government has announced plans to set aside a sum of money from each individual's minimum sum to buy into a compulsory annuity for all CPF members.

If one dies before age 85, the amount goes into the pool and the payouts for those who are still living.

However, it seems that many Singaporeans are having trouble coming to grips with the idea of living long enough to enjoy the benefits of the scheme.

Goh Aik Kiang, a grassroots leader, said: "Right now, my observation is that there is a percentage of people who don't really believe they will go beyond 85."

Related Video Link - http://tinyurl.com/24lrqe
Dialogue on CPF reforms focuses on whys and hows of changes

Labour chief Lim Swee Say, in typical tongue-in-cheek fashion, then tried to address the issue with what he called "his fortune-telling ability".

The Secretary-General of NTUC said: "I can tell you for sure, half of you will die before 85 - half of you will live beyond 85... what I cannot tell you is whether (it is) this half or that half."

It is the harsh reality of statistics that has prompted the changes to ensure that Singaporeans have enough funds for their retirement. But issues like the annuity have raised concerns about fairness.

Goh Keng Hwa, another grassroots leader, said: "It's likely that this programme, as it is, would result in taking away money from those who are poor and sick, and giving to the wealthy and well-to-do. The reason I say that is because people who live up to 85 and beyond are likely to be those (who are) healthy and well-to-do, people who are poor and sick are likely to be compromised, since everybody contributes."

Manpower Minister Ng Eng Hen said: "Professionals calculate which groups live longer and if they do live longer, they have to pay a higher premium. The number one rule – be fair to everyone. So if you want to be fair to everyone, then each person must put aside in the CPF savings so that if you live longer than expected, you can take care of yourself. Because if you don't do that, then those who have put enough to support themselves will have to support you – that's not fair."

To the suggestion that the government should just step in and help old people with funding when their money runs out, the Second Finance Minister said he felt that was a slippery slope.

Minister Tharman Shanmugaratnam said: "The way we are doing now – we help people build up their savings, we give them incentive to save. If you save, we will help you even more, but if we say we will promise to pay if you run out of money, then what will happen over time? People will save less because they know somebody is waiting there, a grand-daddy waiting there to pay up if you run out of money."

Re-employment beyond the age of 62 was another big issue.

Making the distinction between re-employment and simply increasing the retirement age, Mr Lim said re-employment could mean a different job with a different pay that may not be stressful for the older worker.

The scheme also had the added bonus of preventing resentment from younger workers who could climb the corporate ladder and not be blocked by older workers who would simply stay on in their positions.

Mr Lim said NTUC has been working with 300 companies over the last 18 months, and so far, 3,200 Singaporeans who have reached the age of 62 were re-employed. - CNA/so

CPF Reforms Carefully Considered, Govt Can Deliver: PM Lee

Source : Channel NewsAsia, 23 September 2007

The latest CPF reforms were finalised after carefully calculating that the government can deliver on what it has promised, said Prime Minister Lee Hsien Loong on Sunday.

Chairing a dialogue with five other ministers for some 500 grassroots leaders, Mr Lee said any scheme devised has to be fair to everyone.

The prime minister said a British pensions expert he met recently had said there were only three ways to solve the problem of living longer and providing for old age.

The first is to work longer and enjoy a shorter period of retirement, the second option is to save more while working, and the third is to choose to have less money when one grows old.

For Singapore, the CPF reform is the right thing to do as it will benefit many, especially the low-income ones.

Related Video Link - http://tinyurl.com/2ovz9q
CPF reforms carefully considered, govt can deliver: PM Lee

He said: "It's not something that is going to make a difference overnight because we are talking about something when we grow old, and you are talking about 10, 15, 20 years from now.

"This is something if we didn't do, it will not disturb us now, it will not affect the next election, nobody will blame us until we are 35 years from now, when the problem is here, then people will say what kind of government did we have 35 years ago, (they) never took care of us. I think it is our responsibility to do that now."

Mr Lee said the CPF interest rate is better than that given by the banks, and he had a tip for wives.

"All the women should tell their husbands that the government's CPF interest rate is now very high, better than the POSBank anytime so better take your money from your POSB (account) and put into my CPF account," he quipped.

The extra one percentage point given by the CPF Board is something Singaporeans will find hard to get anywhere else.

Mr Lee said: "The government is taking care of it – 100-percent risk free. The money is there, it will never disappear. People say go with GIC, Temasek; GIC makes so much money, you should give me the same like GIC. But GIC invests long-term – they buy shares, the stock market goes up, the stock market goes down.

"(In the) last few months, the stock market has gone down. I am sure GIC's portfolio would have gone down. And not just your interest is less – that means your capital gets less. I was persuaded by MOM (Ministry of Manpower) and MOF (Ministry of Finance), against my preference, that it's better for the government to take on this responsibility for the first S$60,000 because it's a big burden."

Measures to ensure that Singaporeans have a secure retirement go beyond just improving the CPF system.

PM Lee explained that the various measures taken by the government to improve the housing programmes, education system and even Workfare all contribute to achieving that objective.

On the Longevity Insurance or annuities, Mr Lee said he is prepared to consider various options.

"You put the money, you buy the annuity, they pay you, you die, (but) they will continue paying your spouse until she dies. That is something we should consider and can be an option in the scheme which will address the needs of quite a number of old folks," he said.

Mr Lee said the CPF changes are major and hopes the dialogue will help community leaders better understand what the government is doing for the country's long-term good. - CNA/so

HSBC To Close Sub-Prime Unit, Cut 750 Jobs

Source : The Business Times, September 22, 2007

HSBC Finance will record an impairment charge of about US$880 million, reflecting a write-down of Decision One assets on its books. It also will incur about US$65 million in after-tax charges for restructuring that includes employee termination benefits and facility closures

NEW YORK - HSBC Holdings, Europe's biggest bank, said on Friday that it would close its US sub-prime mortgage unit, cutting 750 jobs and taking US$945 million in charges and write-downs, because the business is no longer sustainable.

For London-based HSBC, which is under pressure from activist investors to shake up its corporate governance, it was the latest blow from the meltdown in the US market for loans to home buyers with poor credit histories.

HSBC Finance, the US consumer finance arm of HSBC, said the closure of Decision One Mortgage would result in people losing their jobs at offices in Fort Mill, South Carolina, Phoenix, Arizona and Charlotte, North Carolina.

'It's no longer sustainable and not the right place to allocate capital in the future,' HSBC Holdings Group chief executive Michael Geoghegan said in a statement.

HSBC Finance will record an impairment charge of about US$880 million, reflecting a write-down of Decision One assets on its books. It also will incur about US$65 million in after-tax charges for restructuring that includes employee termination benefits and facility closures.

HSBC acquired Decision One when it bought Household International in 2003 for US$14 billion. Decision One is a small part of HSBC's US operations, which include auto lending and credit cards. -- REUTERS

Is The Worst Really Over?

Source : The Business Times, September 23, 2007

According to conventional thinking, an interest rate cut has to be good for stocks. After all, the last time the US central bank started slashing its rates some seven years ago, it eventually reflated a deflating Wall Street and brought about the run of the past three years.

So it's been that Tuesday's decision by the Federal Reserve to cut its federal funds rate by 50 points instead of the widely-expected 25 has been hailed by most analysts and brokers as sufficient to ensure the bull market resumes.

In its Q4 Strategy Outlook for example, BCA Research said 'monetary reflation will be the dominant force in global financial markets and equity performance will be strongly influenced by this theme', adding that rate cuts will mean lower borrowing costs and better profits ahead. Not surprisingly, it recommends staying positive on stocks.

Most other market-related outfits have arrived at a similar conclusion. One of the arguments used is that the rate cut, which could well be the first of many to follow, should kickstart a flagging US economy that was buckling under the weight of a crashing housing market.

Then there's the India and China angle, which can always be relied upon to induce clients to keep buying when all else fails.

Regular readers of the business pages would be familiar with this line of reasoning, which in a nutshell says that even if the US slides backwards, the engines of global growth have shifted to this part of the world and are being driven by the emergence of India and China.

So it doesn't really matter if Fed chief Ben Bernanke and his economists have acted too early or too late or should not have acted at all, Asia is insulated anyway.

All of this reasoning is fine - it sounds plausible, it's well-grounded and is easily understood even by the most naive of investors.

And it may well be that US rate cuts are just what every market needs to get things up and running again.

But is there a flip side that perhaps has been underplayed, or glossed over in the eagerness to get everyone buying again?

Put differently, are investors at risk of making the same mistake they did two months ago, which is to underestimate the magnitude of risk in the market?

First, the last US easing cycle came when Wall Street was being seriously battered by Nasdaq's crash. This time, the Dow Jones Industrial Average was only 5 per cent off its all-time high when the Fed cut rates on Tuesday.

Similarly, the Straits Times Index was only 4-5 per cent below its own all-time high when the rate cut was made. Check all the other markets and the numbers are roughly the same. Is the visible upside really that attractive?

Second, is it possible that the rate cut will not have much effect on the crashing US property market and that the rally of last week was a knee-jerk relief rally that might soon fizzle out?

Third, if oil is at an all-time high above US$81 and if core inflation picks up, will the Fed take back the rate cut? If it's forced to do so, what might the impact be on Wall Street?

Fourth, when the Japanese economy crashed in the late 1980s under the weight of its own over-hyped property market, its government brought interest rates down to zero but was unable to head off a recession that has lasted for more than 15 years. Is there any reason to think that the US situation could be different?

Finally, there's always the nagging worry that the sub-prime story has not fully played out yet and that there could be more shocks in store. Last week's wobbles came not from Wall Street but from Europe, where the ripples are now being felt and could start appearing in bank earnings.

The best that can be said that although the chances of markets regaining their stability have increased compared to a month ago, the risks have not abated proportionately. Glib urgings to buy and keep buying without equal weightage given to risk should be digested critically and investors have to remain open and cognisant of the likelihood that the worst may not yet be over. -- BT