Why You Should Worry about the Falling Ringgit

Nice intriguing article from Dr Wealth...

Why You Should Worry about the Falling Ringgit

 You’ve seen the long queues at the money changers. People are taking advantage of the weak ringgit, buying it to fund cheaper trips up north. Here’s why you should be worried about the falling ringgit.

The last time the ringgit was this weak compared to the Singapore dollar was during the 1998 Asian financial crisis, when S$1 netted you RM2.66. Now, the currency is hovering in this estimated region and has the potential to fall even further. The falling currency has come at an opportune time – the holiday period. Enterprising holidaymakers in Singapore are whooping with joy, especially since it means your dollar stretches further in Boleh-land.

If this trend continues though, Singapore will be affected by the impending financial storm.

Why is the ringgit dropping?

Oil and gas is big business in Malaysia. Oil-related industries account for an estimated 40 percent of the country’s national coffers. The sharp decline in global crude oil prices, which has dropped by more than 40 percent in less than six months, have been huge body blows to the country’s economy. Supply has outstripped demand, which is bad news for any country whose major export is oil. This is why the ringgit is taking a beating on the global stage.

I keep hearing about this oil crisis. Isn’t it a good thing for consumers that oil prices drop?

In the short term, it’s great news. Theoretically, your petrol expenses, electricity bill, and any other bills that require burning million-year-old fossils will drop. If you’re thinking about a holiday, travel to a country that is heavily reliant on oil as that means the currency will be weaker against the Singapore dollar. Besides Malaysia, you might want to consider heading to Indonesia or even Venezuela.

Traditionally, when crude oil prices drop, the big boys in OPEC, the Organization of the Petroleum Exporting Countries currently led by Abdalla El-Badri of Libya and which produces 40 percent of the world’s oil, usually cuts supply so that crude prices remain at around US$100 per barrel. This time though, the 12 members have voted to continue pumping out their usual output of 30 million barrels a day, creating a glut of black gold that is slowly losing its lustre. Oil prices have dropped to around US$60 per barrel. The energy minister of the United Arab Emirates has even stated for the record that production numbers will remain unchanged even if oil prices fall below US$40.

I still don’t see why the falling ringgit and oil prices are bad for me!

Indeed, on the surface, it’s hard to see how dropping oil prices could be bad for the man on the street. But, hear me out.

Many analysts speculate that the reason why OPEC isn’t budging is simply because of a price war, especially with the US. The Americans have been flooding the market with oil shale, which has been estimated to add about an additional million barrels of oil a day to the market this year. Next year, US is planning to increase production, adding another additional million barrels of oil.

Besides the States, OPEC is also coming to terms with other countries such as Russia and Brazil coming into the market.

So, rather than cut production, OPEC is hoping that the low prices of oil will eventually curb production in the non-OPEC countries. It’s a war of attrition and the bigger members in OPEC have the financial muscle to ride the crisis until it ends.

Now, here’s the messy bit, which we’ll simplify in the next paragraph.

American energy companies have been borrowing a lot of money from banks, asset managers, and pension funds in the past few years. In fact, they are the “most prolific issuers of high-yield debt over the years”. Oil executives were certain that the oil bull market would continue. This emboldened them to borrow more money. Now, as oil prices continue to plummet, these companies will eventually default on their debts, affecting the credit markets. “If you can’t make your debt service, it starts to affect the credit markets, and everything revolves around the credit markets,” explains Larry Glazer of Mayflower Advisors. And as the saying goes, when America sneezes, everyone catches a cold.

Oh boy. This sounds like really bad news.

The situation is so chaotic that nobody can say with any absolute certainty what will happen in the next two years. Some analysts feel that the repercussions of the oil crisis are blown out of proportion while others are firmly in the opposing camp, predicting that the world is headed for another financial crisis.

The Singapore stock market has already reacted negatively to the oil crisis, when shares dropped one percent two days ago. If oil prices drop any further, be prepared to see stocks slump across the board. Singapore’s export-based economy will also be affected.

Is there light at the end of the tunnel?

One word – China. The Middle Kingdom is currently the world’s second largest net importer of oil. If OPEC decides during their next meeting that production will remain status quo, then we could see oil prices drop to less than US$40 per barrel, mirroring the price point of the 2008 financial crisis. However, if the Chinese state government decides to ramp up production that requires energy, then the demand will help to stabilise prices. The early signs aren’t good though. Chinese factory activity has slowed down.

So, what now?

A lot hinges on what OPEC decides to do in its next meeting, which is convening on 5 June 2015, or if they choose to hold an emergency gathering in the next couple of months to address the oil crisis. So, we recommend hanging tight.

Also, you might want to take a look at the clean energy market. We’re certain that it’s a good bet as the world weans itself off oil.

In the meantime, take advantage of the falling ringgit and make a couple of trips up north to snag a few good deals. You could really save quite a bit on your grocery shopping bills.

J.K. Rowling Speaks at Harvard Commencement

Jack Ma - Small is Beautiful (2009 Singapore APEC SME)

Jack Ma inspiration speech at Singapore.. :SMALL is Beautiful"

Also, when you in trouble, REMEMBER 3 things:-
1)  Focus on your CUSTOMERS
2) Serve your EMPLOYEES
3) Learn from your COMPETITORS

Be grateful for what we have

If you think life sucks or unfair, think again....
Look at how this 8 years old girl embraces life with such attitude... AMAZING...!

Malcolm Gladwell Says Steve Jobs Became Steve Jobs Because Of This Personality Trait

Excerpt from Business Insider by DRAKE BAER

Amy Sussman (Getty)/ Sean Gallup (Getty)

Gladwell (left) says Jobs became a legend because of his disposition — not talent or resources.

By the time Steve Jobs died, he was arguably the greatest tech entrepreneur in history — he sired the world’s most valuable company, changed the way people interact with machines, andspawned a cottage industry of management gurus mining his life for Jobsian wisdom. According to popular author Malcolm Gladwell, an icon in his own right, Jobs didn’t become a legend because of intellect, resources, or even 10,000 hours of practice. 

Instead, as he explained on Tuesday at the World Business Forum in New York, Jobs broke through thanks to a personality quality that any of us can develop. 

“Urgency,” Gladwell declared, characterizes Jobs and other immortal entrepreneurs.

Then he asked the audience to consider the story of Jobs and Xerox’s Palo Alto Research Center Incorporated (PARC), an innovation think tank located near Stanford University. 

In the 1960s, “Xerox was then the most important high-tech company in the world,” Gladwell said, and with PARC, it hired the greatest scientists in the world, gave them unlimited research budgets, and told them to take their time in inventing the future.

And they did.PARC invented: 

• The PC• Much of the Internet
• The word processor
• The graphic user interface

Then, in December 1979, this 24-year-old startup kid from Cupertino named Steve gets invited to visit PARC. 

They take him on a tour, and he sees something he’s never laid eyes on before. 

It’s a mouse. It clicks an icon on a screen. 

“Oh my god,” Jobs said. “This is going to transform personal computing.” 

The guy from PARC said, “Yeah, we know. We’ve been working on this for 10 years.” 

Jobs starts jumping up and down in excitement. He runs to his car, drives back to Cupertino. He tells his software team that he just saw “the most incredible thing” at Xerox PARC, called the graphic user interface.

Justin Sullivan/Getty

A young Steve Jobs, looking urgent.

You don’t type a command line with a graphic user interface, Gladwell said; you click an icon on a screen. 

Jobs asked if they could do the same thing. 

The engineers said no.

Jobs told them they had to, demanding that they drop whatever they were working on. 

Then he goes across town, talks to an industrial designer, and demands that Xerox’s $300 mouse be made for $15. 

“Jobs takes the mouse and the graphical user interface and combines them. And the result is the Macintosh — the most iconic product in the history of Silicon Valley, the product that sets Apple on that extraordinary journey it’s still on today,” Gladwell said. 

What happened here? Gladwell asked. Why are we using Apple computers and not Xerox computers? 

“Is Steve Jobs smarter than the people at Xerox PARC?” Gladwell continued. “No. They’re smarter. They invented the graphic user interface. He just stole it. ” 

Did he have more insight than Xerox? No.

Did they have more resources? No, Xerox was insanely profitable. Jobs ran a startup. 

The difference?

“Jobs has a sense of urgency,” Gladwell said. “He wants to do it now. He speeds to Cupertino and says, drop everything, we’re doing this at this very moment.”

Meanwhile people at Xerox, with their unlimited time and money, think that genius can’t be rushed. Jobs is rushed — he’s urgent — and that was a part of his genius. 

“The difference isn’t resources,” Gladwell said. “It’s attitude.”

Leaked tapes: Goldman Sachs controls the Federal Reserve and Government

If only we have more brave and honest people like Carmen Segarra. Below is the extract from
Calvin Tran  Bitcoin Regulation, Business, Economics, News.

Carmen Segarra is the former bank examiner who is filing a wrongful termination lawsuit against her employer, the Federal Reserve of New York, alleging that she was fired for “not going soft” on financial giant Goldman Sachs. Moral hazard runs rampant as clearly, Goldman Sachs still does not have a conflict of interest policy that would stand up to Fed criticism, if the Fed ever bothered to do their job.

After hours of correspondence and interviews, Jake Bernstein, reporter for ProPublica, obtained Carmen Segarra’s 46 hours of secret recordings within her time at the Fed and they were released today, with the airing of today’s episode of ‘This American Life’ on National Public Radio. You can listen online here, with a running time of 69 minutes of jaw-dropping potency as one of the most powerful establishments of the world is exposed. Read the transcript here.

The Story of Carmen Segarra

ProPublica reports that Carmen Segarra was hired into the Federal Reserve as an effort to monitor systemically significant financial institutions after the Dodd-Frank regulatory overhaul. In her short 7 months working there, she witnessed the crony foundation of their lax oversight atmosphere, leading to what experts call “regulatory capture.”

‘Regulatory Capture’ is a term referring to when the institutions appointed with government oversight and regulation end up being controlled or ‘captured’ by those they were meant to regulate. In late October of 2011, Carmen Segarra stepped into the Federal Reserve for her first day as senior bank examiner to find that she would be assigned to oversee investment banking giant Goldman Sachs.  Almost immediately, she was met with pushback. In one instance, at a meeting with a Goldman Sachs senior executive, she was shocked to hear him say that once clients were wealthy enough, certain consumer laws don’t apply to them. In December of 2011, not two months after she was hired, she was approached by a business line associate and told to change the minutes from a key meeting with Goldman executives. She refused.

Her time at the Fed coincided with a string of disturbing events (obviously happening on a wider scale), including many turned-away eyes and major buddying-up with Wall Street, showing just how government agencies tasked with regulating corporate giants end up as collusive tools, or at least lazy pets, of those that they were meant to keep controlled. Worried and shaken by what she was witnessing, she decided to begin secretly recording important meetings. Today, these meetings are being broadcasted for the first time to the public.

The most disturbing recording involved a tense 40 minute meeting with Segarra’s boss as he repeatedly attempts to persuade her to revert her conclusion that Goldman was missing a policy in regards to any conflicts of interest, notably in this event, a conflict of interest in a deal between Kinder Morgan and El Paso. This was a week before she was fired, her phone confiscated, and she was marched out of the Federal Reserve offices in lower Manhattan.

In October of last year, she filed a wrongful termination lawsuit against the Federal Reserve which was later thrown out by a judge, sating that it did not fit the statute under which she sued. The Fed responded with a two-page statement, stating that their decision in terminating Carmen Segarra’s position was because they did not trust her judgement.

“The New York Fed categorically rejects the allegations being made about the integrity of its supervision of financial institutions.”

he Federal Reserve Black Box

What little we know of the Federal Reserve’s inner workings are only unraveling now as the secrets may be busting at the seams. This is one of many issues that is finally reaching the light of day. As the US financial regulatory environment, as well as much of the modern world’s, is still obscured in secrecy, perhaps this may be a shocking wake-up moment for people nationwide. In the next few years, cryptocurrencies will only become more and more a viable alternative to the traditional banking and financial system. The structure and functions are in code, not in secret meetings and buddy-buddy relationships.

This is something immeasurably important as we consider the proposed regulation by the NYDFS on BitLicensing as well. Not only would the draft attempt to force the Bitcoin industry to become like the traditional system, but it would force the Bitcoin industry to be overseen by institutions like the Federal Reserve; shrouded in secrecy and kept away from the light of the media. What we know of the proposed draft right now is that big banks like Goldman Sachs would not have to file with the NYDFS, already giving them the upperhand. Only time will tell what implications these may have.
Bull image from Dealbreaker; other images from Shutterstock.

Do You Turn Red After Half a Beer? You Could Have Alcohol Flush Reaction

The Gist of It

• Flushing is caused by an enzyme disorder in your liver which cannot break down acetaldehyde.
• Alcohol flush syndrome has been associated with higher risk of esophageal cancer and hypertension.
• There’s no cure to alcohol flush syndrome, except for avoiding alcohol.

Hello there drinker! What’s your favourite drink? Oh, beer you say? Do you turn red really quickly after consuming half a can of your favourite beer?

If your answer is yes, ever stop to wonder what that means? We asked a few people at a bar one night, after feasting our eyes on blotchy redness all over.

“My circulation is in tip top condition, that’s why!” one guy exclaimed.

“I’m allergic to alcohol, but I like drinking sometimes,” said another girl.

“It’s just our Chinese genes!” said a group of friends.

A study showed about a third of Japanese, Chinese, and Koreans respond to alcohol by turning red. It’s such a common sight to see a sea of red faces all over bars and clubs in Asia that we don’t even think to question it. Those of us blessed enough to not turn into a tomato after a drink or two, laugh at our friends who do. And those of us who turn red? We shrug it off as a harmless genetic malfunction and continue with our drinking habits. But is it all just fun and games?

Why Does The Dreaded Alcohol Flush Happen? 

Some people believe this is due to Asians being unable to metabolise alcohol. While that might sound very scientifically accurate, it’s not the case.

And no, it’s also not you having exceptionally good blood circulation.

Alcohol is metabolised in your liver, where it is oxidised first to acetaldehyde, and then converted to acetate by an enzyme known as aldehyde dehydrogenase (ALDH2).

Source: physrev.physiology.org

Those who turn red after a bit of alcohol have a genetic change in their ALDH2. The gene variant causes the body to metabolise alcohol more quickly, but become less efficient in breaking down acetaldehyde. The buildup of acetaldehyde is what causes your blood vessels to dilate and your skin to turn red[1].

This condition is known as alcohol flush reaction, but since it happens mostly to Asians, it’s been nicknamed the Asian flush or the Asian glow [2]. Lovely name, indeed.

What Other Symptoms Will I Get Besides the Redness?

Well, you wouldn’t be a stranger to headaches and nausea. Some people also report itchiness on the skin.

The Asian Flush is Associated with Higher Risk of Hypertension and Cancer

Some people dislike drinking because of the redness and itchiness they get on their skin, while some others ignore the cosmetic side effects to have a good night out.

But recent studies have revealed evidence that ALDH2-deficient individuals are at much higher risk of developing esophageal cancer from consuming alcohol, than those with a fully active ALDH2 [3]. Esophageal cancer also happens to be one of the deadliest cancers in the world, with pretty low survival rates. [4]

Acetaldehyde is a metabolite of alcohol, but is also an animal carcinogen and mutagen with recognised cancer-promoting properties [5].

When the tissues of your upper aerodigestive tract is repeatedly exposed to acetaldehyde, the probability of DNA damage and mutation could also increase [6].

In a paper published in 2013, researchers studied 1,763 men, including non-drinkers, flushers, and non-flushers. They found that flushers who drank the same amount of alcohol (more than 4 drinks, less than 8) as non-flushers were at higher odds of getting hypertension. The risk of alcohol-related hypertension was also much higher among flushers who consumes more than 4 drinks a week [7].

Treatment Options for Alcohol Flush

Unfortunately since it’s a genetic problem, there’s currently no cure for the alcohol flush, except to avoid alcohol.

Although the use of antihistamines can prevent the redness, it doesn’t change the fact that your body cannot break down acetaldehyde. This means you’re still putting yourself at risk for developing esophageal cancer and hypertension if you continue drinking.

But It’s Not All Bad

Since the enzyme disorder causes people to go red after just a tiny hint of alcohol, there are plenty who shy away from drinking. Nobody likes hearing embarrassing stuff like “Hey you look like a tomato” or “Man, you’re red as a butt on fire” all the time.

Also, since flushers experience some not-so-great reactions when downing alcohol (like itchy skin, headaches, etc), they can’t really drink too much. Studies show how this can play a role in preventing alcoholism [8].

So effective is the flush at preventing you from becoming an alcoholic that pharmaceutical companies are using the science behind it to develop drugs to help recovering alcoholics. Antabuse uses Disulfiram to block the processing of alcohol in the body [9], which causes the same symptoms as flushing.

What To Do Now 

If you get red after a drink or two, you should think about drinking less, a lot less. While you may call us a party pooper, it’s good to understand that you’re putting yourself at a higher risk of developing both cancer and hypertension.

Also, to those who do not turn red after drinking, this is not a license to go crazy. Moderation still reigns supreme, and too much alcohol can also do nasty things to your body. General agreement of “moderate drinking” is about one to two drinks a day for men, and one drink a day for women.

Team Work Lesson from a fire ant colony

Team work is build on TRUST and SACRIFICE. Without these two qualities (trust and sacrifice) no team can perform well.

Term life insurance: Why buy term? How big a sum should I buy? How long a term should it be? How much does it cost?

1 of my favorite bloggers posted this discussion about insurance. Thought I post on my blog as 'keepings'.

Saturday, September 6, 2014

A reader shares his wisdom:

Before we discuss about how much insurance to get, we must first understand what insurance is all about. Insurance is (1) a risk management tool (2) to transfer the financial risk of catastrophic events to the insurer (3) in exchange for a small sum of premiums.

In light of the above definition, I usually recommend people to stay away from whole life insurance and go for term-life instead. Insurance, after all, is an excellent risk management tool but a poor investment vehicle, IMHO. 

How much life insurance should one get? There's many factors to consider. One of that will be your financial commitments. Say, you are a fresh graduate and no dependants at all. Technically, you only need sufficient life insurance to cover for TPD and CI. The required sum assured will still be high (up to S$500,000) because a young disabled man in his 20s will need lots of $$$ for care and support until he passes on. Take note that expected longevity in SG is about 82 for male and 85 for females.

An additional point to note is that when buying term-life insurance, I would suggest my friends to cap the term up to retirement age (currently 62 years old).

The reason is simple: Insurance loses it cost effectiveness after a person is in his 60s and 70s. The cost of life insurance will rise exponentially because the probability of dying also rises exponentially.

This is one of the main reasons why the Dependent Protection Scheme (DPS) caps at age 60. Getting life insurance beyond that age is no longer value for money.

When you are in your 60s, life insurance should no longer be needed because your financial commitments should be at a minimum. This means no debt, no dependants and no major financial expenditures. 

People in this life-stage should be focusing on retirement adequacy.

Btw disclaimer ah, I am just talking out loud to myself in the above posts. Please visit a professional planner (not insurance agent) if you want sound and constructive $$$ advice.

I bought my insurances when I was 26 years old. 

I paid $100/month for $1M term life and $250K major CI. You can use this a base for comparison.

For fresh graduate earning a market rate of $3K/month. $50/month can "smelly-smelly" get them $500K insurance coverage if they go for term-life insurance.

Friends, not everything in life needs insurance one. Ponder and chew on this point.

Get adequate insurance where it matters. Don't overpay for insurance and we do not need insurance for everything under the sun. Words of wisdom.

Note: Author would like to remain unnamed.

8 Vegetables You Only Need To Buy Once, Then Regrow Forever

It’s easier to go to the grocery but growing these vegetables from kitchen scraps would be totally badass! It does require some time though but the benefits riding on the project are many. It will save you money and you need no farm; you can do it indoors. All you need to do is use fresh scraps. Do not use stuff that has been composting for weeks. When regrowing the plants, make sure you provide them with enough light and water.

Simon Sinek: Why good leaders make you feel safe

Very nice video on how a TRUE Leader should do...

Enjoy the journey more than the destination

A REALLY good post " My Life, My Trades & My Bowl Of Salad" on Singapore 49th Birthday by my mentor, Conrad Alvin Lim...

46 Most Brilliant Life Hacks Every Human Being Needs To Make Life Easier

Clever solutions to the little snags that this athor come across in cooking, building, cleaning, or just about anything.

28 Things to Avoid at All Costs in INVESTNG

Morgan Housel at Fools usually came out with good articles. Last week, he came out with a list of 28 things that you should attempt to avoid at all costs. Its a simple list. You can view it here.

Drop everything and run when you feel / doing these....

Feelings of certainty. They invariably come just before big surprises.

People who claim certainty. It's the most potent way to trick someone.

Risk-free returns. You'll end up with return-free risk.

People who have predicted 564 of the last two market crashes. And there are a lot of them.

Adjusting your risk-tolerance when stocks are either crashing or surging. It's the easiest way to make a financial decision you'll regret.

Putting 30 years worth of savings into something you spent seven minutes researching. You have no right to complain about losing money in an investment you put no effort into understanding.

Extrapolating the recent past into the future. Things always change. If your forecast doesn't, you're doing it wrong.

People who aren't willing to change their minds. Including yourself. Especially yourself.

Feeling smarter after the market goes up. You had nothing to do with it.

Explanations of what were likely random events. This means almost every market move that takes place in time periods less than one year.

Having political feelings within ten miles of your investment decisions. This is a common way smart people make dumb decisions with money.

Spending more time arguing why other investors are wrong than trying to figure out what you're doing wrong.

Spending the majority of your time in a job you hate in order to make enough money to spend part of your time in a life you don't hate.

Precision. Finance just doesn't work that way.

Impatience. It's the fastest way to disappointment. 

Investments you can't explain to a third grader. If you can't, you probably have no idea what you're getting into.

Assuming your past investing behavior isn't indicative of your future behavior. It's the best guide you have.

Assuming that the random life experiences you've had provide a complete view of the world. Everyone has their own version of history and it's a tiny reflection of reality.

Reliance on pensions, inheritances, Social Security, or the decisions of anyone other than yourself to make it through retirement. Few third parties care about your wellbeing decades from now.

Six-figure student loans before you're old enough to drink. This is starting out life with your hands tied behind your back.

Assuming investors who wear suits are smarter than you. Being a smart investor has little to do with education or job title and everything to do with behavioral traits.

Assuming intelligence in one field translates to being a smart investor. I doubt there's any correlation.

Assuming that bad investments you made were the result of bad luck and good investments you made were all skill.

Measuring investment fees in basis points instead of dollars. An advisor saying, "My fee is 100 basis points" sounds so much better than, "This will cost you $35,000 per year."

Feeling entitled to investment returns, a decent job, or predictability. 

Trading on margin. Most people can't handle market volatility without leverage.

Trading, in general. You're fighting randomness and computers that can solve a trillion problems before you can blink.

Worrying about things you can't control. Like what the Fed will do next, what the market will do next month, or whether earnings will beat expectations.

Avoid those, and most everything else should fall into place.