Copyright © 2008, by ONION, INC
Tuesday, March 25, 2008
"We knew we were selling time bombs..."
What were they thinking? Selling mortgages to people with just enough income to cover the first five months of annual interest payments, repackaging those mortgages into bonds and selling them off to investors. Of course that bubble was going to burst some day! But why did it happen, and at such a large scale? Because of money, of course... As the people working in credit derivatives were rewarded according to the number of sold packages, they were encouraged to sell as much of the junk as possible.
I'm going to avoid getting too technical here, but the whole world was being fooled by the cartel of bulge bracket Investment Banks, who were constantly selling these rotten products to each other in order to keep the momentum going. And then it burst...
Why then, would tax payers need to bail out these banks and its bankers for messing it all up? Bernanke should have just let Bear Stearns file for bankruptcy. By selling their Madison Avenue office BS would probably be worth more than what JPM is paying now. And to start out with a clean slate, you first need to...well...clean your slate.
When the markets have a slight hickup the bankers are the first to let us all know the market will 'sort things out' and all will be just dandy. How about we test the market and let the market sort them out this time.
Bailing out these banks will not solve the problem. The banks should feel the pain to such an extent that their own survival will depend on their own internal culture. It's pretty obvious the bankers spoiled by the fat bonuses the past few years will just need time to find a new product they can sell easily in order to cover the costs of their summer home in the Hamptons. It is very strange that a banker theoretically has an unlimited bonus if all goes well, but if everything goes wrong the bank takes the losses and not the banker. Therefore the whole reward system should be revised drastically enforced by the e.g. the SEC (US) and the FSA (UK) in order to ensure all banks involved in this crisis adhere to the new system. If they think they can behave like spoiled little kids they apparently need some good parenting.
It is important to keep in mind I am talking about Investment Banks here who handle money of large institutions and millionaire private clients, and not regular Commercial Banks with 'average Joe's' money in retail accounts. The regulations covering I-Banks are nowhere near as stringent as those for Commercial Banks. Commercial Banks should be treated like public utilities in times of crises in order to safeguard people's money. I-Banks however, somehow have all the room to speculate with all the money in their coffers and still get saved by the Fed. Not really a fair situation if you ask me.
Oh by the way, anyone interested in a Bear Stearns employee card or a BS cafeteria card? You can have it for the price of one BS share..........
I'm going to avoid getting too technical here, but the whole world was being fooled by the cartel of bulge bracket Investment Banks, who were constantly selling these rotten products to each other in order to keep the momentum going. And then it burst...
Why then, would tax payers need to bail out these banks and its bankers for messing it all up? Bernanke should have just let Bear Stearns file for bankruptcy. By selling their Madison Avenue office BS would probably be worth more than what JPM is paying now. And to start out with a clean slate, you first need to...well...clean your slate.
When the markets have a slight hickup the bankers are the first to let us all know the market will 'sort things out' and all will be just dandy. How about we test the market and let the market sort them out this time.
Bailing out these banks will not solve the problem. The banks should feel the pain to such an extent that their own survival will depend on their own internal culture. It's pretty obvious the bankers spoiled by the fat bonuses the past few years will just need time to find a new product they can sell easily in order to cover the costs of their summer home in the Hamptons. It is very strange that a banker theoretically has an unlimited bonus if all goes well, but if everything goes wrong the bank takes the losses and not the banker. Therefore the whole reward system should be revised drastically enforced by the e.g. the SEC (US) and the FSA (UK) in order to ensure all banks involved in this crisis adhere to the new system. If they think they can behave like spoiled little kids they apparently need some good parenting.
It is important to keep in mind I am talking about Investment Banks here who handle money of large institutions and millionaire private clients, and not regular Commercial Banks with 'average Joe's' money in retail accounts. The regulations covering I-Banks are nowhere near as stringent as those for Commercial Banks. Commercial Banks should be treated like public utilities in times of crises in order to safeguard people's money. I-Banks however, somehow have all the room to speculate with all the money in their coffers and still get saved by the Fed. Not really a fair situation if you ask me.
Oh by the way, anyone interested in a Bear Stearns employee card or a BS cafeteria card? You can have it for the price of one BS share..........
Sunday, September 23, 2007
5 C's
Sorry, I've been so busy I haven't had time to write a new post for my blog, but at last here it is!
In this post I'm going to tell you something about the 5 C's of Singapore. To reach the highest echelons of the Singaporean societal ladder you need to be high on the ranking of the 5 C's. So what are these 5 C's? Some time ago this term started as a joke about the wide-spread materialism in Singapore, but has now become an established term in Singlish (Singapore-English). The 5 C's are the following: Cash, Car, Condo, Credit Card and Country Club. People in Singapore are basically rated according to these C's;
Cash: is self-explanatory, the more you have the higher on the food chain you are.
Car: is an 'ueber' status symbol here in Singapore as cars are, relative to other countries, extremely expensive. The base tax on a car is around 191%, excluding road tax and something called the Certificate of Ownership, which basically allows you to own and drive a car which is easily some double digit percentage of the value of your car. So you want, let's say a nice Volvo XC 90 SUV? Then you better be prepared to shell out $250,000 and that's without the sunroof option ;) This explains the strong connection of the car you drive in with the food chain ranking.
Condo: 84% of Singaporeans live in so called HDBs (Housing Development Board), which basically is government built and subsidized housing. Within HDBs you have a food-chain system as well basically linked to location. Some HDBs near the city centre are really pretty luxurious while others near the airport are much less attractive to live in and therefore are meant for the lower echelons of society. Condos however are where the affluent locals and expats live in. Basically they're pretty much hotels without the room service. So if you can afford a condo, you are doing very well. If however, you can afford a freestanding house with a garden, you are so much the shit you don't even have to look at your 5 C's anymore so the condo doesn't count for you anymore.
Credit Card: To apply for a Credit Card here in Singapore you need an income of at least $30,000 annually. However, there is a ranking within the CCs as well, such as Platinum, Elite, Gold, the whole deal. The level of your card therefore also plays a great role. It is of such importance that most banks here now even offer platinum cards for a much higher annual fee even if you don't really have enough on your account to be eligable. And people actually pay those fees in order to get a platinum....
Country Club: As there is very little empty open land in Singapore country clubs are very rare. The ones that do exist are therefore extremely exclusive. Some clubs even have waiting lists of several years. What helps is that you can usually sign up your 5 year old kid for a golf membership which kicks in when he turns 18/21 just to make sure he has a tee-off time on his birthday of course. Oh and don't forget you'll have to start paying a 'holding' fee for the years he has to wait. This is of course only available to people who are already members of course and already pay several tens of thousands of dollars a year to have the sticker on their windshield of their cars. (here in Singapore you need a sticker on the windshield of your car so the guard at the club can see you are a member, otherwise they will deny you entry). Therefore the more stickers you have on your windshield the higher on the food-chain you are.
So much for the latest lesson on Singaporean society!
In this post I'm going to tell you something about the 5 C's of Singapore. To reach the highest echelons of the Singaporean societal ladder you need to be high on the ranking of the 5 C's. So what are these 5 C's? Some time ago this term started as a joke about the wide-spread materialism in Singapore, but has now become an established term in Singlish (Singapore-English). The 5 C's are the following: Cash, Car, Condo, Credit Card and Country Club. People in Singapore are basically rated according to these C's;
Cash: is self-explanatory, the more you have the higher on the food chain you are.
Car: is an 'ueber' status symbol here in Singapore as cars are, relative to other countries, extremely expensive. The base tax on a car is around 191%, excluding road tax and something called the Certificate of Ownership, which basically allows you to own and drive a car which is easily some double digit percentage of the value of your car. So you want, let's say a nice Volvo XC 90 SUV? Then you better be prepared to shell out $250,000 and that's without the sunroof option ;) This explains the strong connection of the car you drive in with the food chain ranking.
Condo: 84% of Singaporeans live in so called HDBs (Housing Development Board), which basically is government built and subsidized housing. Within HDBs you have a food-chain system as well basically linked to location. Some HDBs near the city centre are really pretty luxurious while others near the airport are much less attractive to live in and therefore are meant for the lower echelons of society. Condos however are where the affluent locals and expats live in. Basically they're pretty much hotels without the room service. So if you can afford a condo, you are doing very well. If however, you can afford a freestanding house with a garden, you are so much the shit you don't even have to look at your 5 C's anymore so the condo doesn't count for you anymore.
Credit Card: To apply for a Credit Card here in Singapore you need an income of at least $30,000 annually. However, there is a ranking within the CCs as well, such as Platinum, Elite, Gold, the whole deal. The level of your card therefore also plays a great role. It is of such importance that most banks here now even offer platinum cards for a much higher annual fee even if you don't really have enough on your account to be eligable. And people actually pay those fees in order to get a platinum....
Country Club: As there is very little empty open land in Singapore country clubs are very rare. The ones that do exist are therefore extremely exclusive. Some clubs even have waiting lists of several years. What helps is that you can usually sign up your 5 year old kid for a golf membership which kicks in when he turns 18/21 just to make sure he has a tee-off time on his birthday of course. Oh and don't forget you'll have to start paying a 'holding' fee for the years he has to wait. This is of course only available to people who are already members of course and already pay several tens of thousands of dollars a year to have the sticker on their windshield of their cars. (here in Singapore you need a sticker on the windshield of your car so the guard at the club can see you are a member, otherwise they will deny you entry). Therefore the more stickers you have on your windshield the higher on the food-chain you are.
So much for the latest lesson on Singaporean society!
Thursday, August 30, 2007
Business Asian Style
Yesterday I decided I wanted to have a suit dry-cleaned before my working week starts on Monday. What I didn't know is that for some reason dry-cleaning here still takes about a week to get done. Pretty much everything else from ordering a cab by phone, having your cable installed to even having an MRI scan happens at the speed of light, but for some reason the mysterious science of dry-cleaning takes more time for the Singaporeans than to build a new part of town (actually that might be one of the things they really do fastest here). The problem was however, I simply did not have that time. The lady of the dry-cleaners told me it would be ready on Monday or Tuesday and they'd give me a call. I asked if there was no way they could get it done any faster, she pointed to racks of clothes behind her and said they were swamped and they really couldn't get it done on time. Then my Asian blood kicked in; "How much does the dry-cleaning cost?" "S$ 13, sir." "Alright fine, I'll give you S$ 20 if you can make sure you can get it done before the weekend." She then took my suit pushed a bunch of clothes aside on the rack so mine was first in line, turned back around with a smile on her face and said "Ok sir no problem, you pick up tomorrow at 5pm?" HAHA isn't that great! In Holland people would probably depict this as a direct bribe, but Asians see it as what the market is prepared to pay for an 'express service' even though at first this doesn't even appear to be an option. I prefer the latter interpretation ;) So people, I'm off to pick up my dry-cleaned and nicely pressed suit now! Bye!
Monday, August 27, 2007
The West and the East put in a blender
The best roads I've ever seen, filled with cars with some of the worst driving I've ever seen. A super modern, efficient metro system, but anyone above 1.80 meters will have to keep their head down to fit in. An ueber-hip and trendy restaurant filled with people following a 'day at the beach' dress code. A hefty fine for not wearing a seat belt in the back of a cab, while construction contractor's pick-up trucks race by with 10 passengers sitting on top of each other in the back with not even a roof, let alone seat belts. Singapore is probably the most irrationally mixed country in the world. As it is much richer and much more developed than all the other countries in the region it looks more like a 'Western' country than most countries in the 'real' West do. But even then it still has such a clear Asian identity through these examples I mentioned above. I could go on and on, but I think you pretty much get the idea. It's as though somebody dropped 4 million South East Asians into Switzerland, added palm trees and turned up the heat. It's the strangest thing and that's what also makes this place so amazingly unique. In many countries the various cultures live along side each other or they are mixed so extensively that one can not see the differences, but here it's as though the blender lost power half way. For those who have no clue what I'm talking about...come visit this great town.
Wednesday, August 22, 2007
Finally arrived in Singapore
(not the typical Sing skyline pic, but the view from the balcony)
At last the long wait is over and I actually am in Singapore. It's great to be here again. Today I woke up at around 12.30 after a horrible jet-laggy night of waking up and falling a sleep again for short periods. After that I went for a walk down Orchard Road to soak up capitalism at its best, Starbucks here, Gucci there, Prada over there, D&G accross the road, Mc Donalds everywhere haha, but it's cool as there's definitely A LOT to do. I can already see the slight changes Singapore has been experiencing over the past years. One example is that in Watson's (like Boots, or Etos for the Dutch readers) the Durex condoms are in a rack next to the cash register in plain sight WAAAA soo progressive and liberal, lah! ("lah" = common suffix here by the way just like in Malaysia). Wanted to pick up a simple Singaporean Singtel sim card for my phone and even for pre-paid they need a passport so have to go back to get one. Will pass it on asap to those who want it. Tonight I'm going to meet up with Giovanna who will be room mate for the rest of the year. She's busy all day with a La Perla fashion show somewhere in town, I better get an invite next time... :) Alright gonna head back with my passport this time.
(My new best friend :) haha)
At last the long wait is over and I actually am in Singapore. It's great to be here again. Today I woke up at around 12.30 after a horrible jet-laggy night of waking up and falling a sleep again for short periods. After that I went for a walk down Orchard Road to soak up capitalism at its best, Starbucks here, Gucci there, Prada over there, D&G accross the road, Mc Donalds everywhere haha, but it's cool as there's definitely A LOT to do. I can already see the slight changes Singapore has been experiencing over the past years. One example is that in Watson's (like Boots, or Etos for the Dutch readers) the Durex condoms are in a rack next to the cash register in plain sight WAAAA soo progressive and liberal, lah! ("lah" = common suffix here by the way just like in Malaysia). Wanted to pick up a simple Singaporean Singtel sim card for my phone and even for pre-paid they need a passport so have to go back to get one. Will pass it on asap to those who want it. Tonight I'm going to meet up with Giovanna who will be room mate for the rest of the year. She's busy all day with a La Perla fashion show somewhere in town, I better get an invite next time... :) Alright gonna head back with my passport this time.
(My new best friend :) haha)
Thursday, August 2, 2007
Singapore, here I come!
I know times passes quickly, but this is high-speed supersonic stuff we're talking about. I'm moving to Singapore in less than 3 weeks!! I remember the time when I still had months and months ahead of me... So going to pack up my stuff here, say bye to my friends and then move to the Switzerland of Asia for half a year. I'm actually especially looking forward to the food :)
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