SGX Cracks The Whip

One may think that there are plenty of shenanigans in Malaysia, but they are just as rampant even in Singapore stock market. There are many small penny stocks that are being played like there is no tomorrow. Controlling share blocks change hands frequently causing many to speculate on "new order of business" or causes investors to bet on personalities, or mavericks as we like to all them. There are also problems with some foreign listings. The new rules by SGX are necessary.

One of the more important development would be the need to disclose on shares being collateralised by the controlling shareholder - we all know what that will mean. It may also hit some Malaysian company owners who have pledged their shares in Singapore in exchange for lines of credit - they certainly will not want that information to be in the public. Can you guess which Malaysian companies will be affected? I know a few but to put them up would be unethical, so do your own research and be careful. In fact some may already be "affected".

Business Times Singapore: Errant directors of listed companies may come under greater scrutiny from the Singapore Exchange (SGX), which could object to their appointment and rap them publicly.

Proposed new rules also have more safeguards against poor governance for listings with large overseas operations. They demand more disclosure over possible changes in control of companies due to share pledges for loans. In a consultation paper issued yesterday, SGX said that when companies become the subject of an investigation of “irregularities or other wrongdoing”, they may require approval to appoint directors, chief executives (CEOs) and chief financial officers (CFOs).

Controlling shareholders under investigation may be prevented from installing a proxy after being booted out from the company.

SGX also seeks to cement its right to censure publicly or object to the appointment of key executive officers or directors if they have breached regulations or have “refused to cooperate with the regulators”.

The moves will make directors and executives of public listed companies more conscious of their duties, said Lee Suet Fern, managing partner of Stamford Law Corporation. “There was otherwise a lacuna where errant directors and executives who had caused breaches of our rules but had not actually committed a crime, could continue unscathed.”

An outgoing CFO must also confirm with SGX that there are no irregularities or material differences in opinion with the board or management. This could act as a whistle-blowing mechanism. The regulator also wants companies to ensure that an independent director (ID) is sitting on the board at all times. In 2006, now-delisted retailer Robinson saw all its IDs quit after a board tussle.

For foreign listings, or companies with “offshore principal subsidiaries”, at least one ID who is staying in Singapore should be on the board. One market watcher cautioned that this might put too much burden on IDs and deter some from sitting on the board. If foreign listings are being audited by overseas auditors, new rules may require such companies to have a joint sign-off with a Singapore accounting firm for the accounts, as mentioned by then-CEO Hsieh Fu Hua in August.

Hsieh added then that controlling shareholders may soon need to disclosure their share pledges to the public, an issue that had been magnified by the recent slew of S-Chips’ CEOs losing their controlling stake to debtors after they defaulted on loans.

Under the proposal, shareholders must publicise their pledged shares when the total stake is at least 30 per cent, when an enforcement may cause a breach of loan covenants by the company, or when the controlling shareholder is the single-largest one and has pledged at least half of his stake.

“It becomes a company matter and not a personal matter in such cases and I believe the shareholders’ right to know far outweigh the privacy concerns,” said Mak Yuen Teen, co-director of the Corporate Governance and Financial Reporting Centre at NUS.

In addition, SGX proposes to ban the transfer of shares in a company that is under trading suspension. It wants controlling shareholders and their associates to have their shares custodised with the Central Depository or a depository agent who has made arrangements with SGX to restrict transfers of shares during suspension.

Newly listed companies have also been asked by SGX to consider engaging a governance adviser for two years after their initial public offering. In some instances, SGX may ask the company to appoint an adviser. The consultation paper will be available for feedback until Jan 15.

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In a bid to increase market transparency, the Singapore Exchange (SGX) has said that it is making it compulsory for brokers to mark all short-sell orders. A short-sell order is defined as any sell order where the seller does not own the quantity of shares sold at the time of placing the order. SGX said it will institute this policy of marking short-sell orders in the first half of 2010 in consultation with the Monetary Authority of Singapore (MAS). In addition, statistics of aggregate short-selling activity for each individual security will be published daily.


p/s photos: Luna Maya

What The Experts Are Saying About Emerging Markets Part 2

Regional Performance:

Asia (Ex-Japan): Asian equities have outperformed mature markets in 2009 thanks to continuous foreign institutional investor inflows amid diminishing risk-aversion among global investors and relatively resilient macroeconomic fundamentals. Markets had gained 46% YTD as of August 31 (78% since October 2008) with India (68%) and Indonesia (75%) the best performers, and China (39%) and Malaysia (36%) the laggards. Sri Lanka posted an exceptional 131% gain due to the end of a 26-year civil war, a US$2.5-billion loan agreement with the IMF and the government's positive stance on reforms and liberalization. Asian markets have recovered 54% of the losses incurred in 2008 (peak to trough, down 59%).

Latin America (LatAm): LatAm equities has outperformed the other emerging markets' regional indexes by rising 59% YTD to August 31 (99% since it hit bottom in November 2008), with strong performances in Brazil (71%) and Colombia (55%). The laggards are Argentina (41%) and Mexico (34%). Overall, LatAm equities market have recovered 46% of the 2008 crash, after falling 68% peak to trough.

Eastern Europe, Middle East and Africa: Equities market went up 42% YTD to the end of August and 77% since reaching bottom in March 2009. Turkey (66%) and Russia (59%) lead the mark, while Morocco (-3%) and South Africa (16%) have underperformed. Eastern Europe, Middle East and Africa stock markets have recovered 39% of the sharp correction induced by the global crisis, after falling 66% peak to trough.

Recent EM market Dynamics:

• Emerging-market stocks ended higher on November 18, heading for their highest level in 15 months. The gap on yield for developing vs. developed country debt fell due to higher commodity prices and speculation that the U.S. would keep low interest rates until 2012. David Spegel, the head of emerging market strategy at ING Financial Bank NV in New York, says there is “some positive sentiment and upside favoring for high beta countries…Investors are expecting that the Fed will remain on hold for a long time and recognize it as a buying opportunity.” (Bloomberg, 11/18/09)
• WB President Robert Zoellick says the U.S. has a limited ability to stop the USD decline, while IMF head Dominique Strauss-Kahn says the USD has fallen within a normal range, proving resilient to the crisis. Asian authorities “expressed concern that the global stimulus, especially the flood of liquidity pumped out by central banks, could create asset bubbles and inflation, such as in commodities.” (WSJ, 11/14/09)
• According to Citi, "Latin American stocks face the risk of a rebound in the U.S. dollar, in the middle of which could be the region’s steepest rally in almost two decades. The biggest fundamental risk of a decent correction in regional equities is, therefore, a bounce in the dollar…As markets enter 2010, the timing of the first Fed move will come closer and the dollar could bounce, triggering a more severe correction in regional equities." LatAm equities are more likely to suffer a correction early in 2010 than at the end of this year. Citi reiterated its preference for Brazilian over Mexican equities. In the face of debt downgrade risk, Mexican stocks are "underweight." (Bloomberg, 10/27/09)
• Developing-nation stocks headed for a steep three-day slide as concern mounted that central banks may rein in stimulus spending and companies reported lower profits. The MSCI Emerging Markets Index dropped 2%, reaching an accumulated retreat of 4.1% during the week. Stocks in Russia, Turkey, Hungary and Indonesia fell more than 2% while the suffering of large companies in South Korea and Poland was felt in their indexes. During 2009, the MSCI measure for emerging-market equities has rallied 64% as governments pumped about US$12 trillion to spur growth and as signs of recovery drew investors to higher-yielding assets. (Bloomberg, 10/28/09)
  
• "Equity fund inflows into the BRICs have reached US$32.3 billion this year (US$10 billion above 2006). Brazil has been the best performer as equity investors have pumped in US$2.44 billion in October (nearly double that of China at US$1.3 billion) due to its position as one of the world largest commodity producers, strong growth in China and the broader optimism about global economic recovery. The strong data in the developing world and a growing view among investors that these markets are likely to offer the biggest returns as their economic growth outpaces the west have attracted US$63.1 billion in inflows this year. This compares with outflows of US$75.6 billion in developed world equity funds." (FT, 10/23/09)
  
• After India withdrew its monetary stimulus and increased its inflation forecast, emerging-market stocks fell the most in seven weeks as the MSCI Emerging Markets Index declined 1.3%. The yen rose as investors sought refuge. The Shanghai Composite Index decreased 2.8%, the steepest decline among benchmark equity indexes worldwide, after an early drop in metal prices. (Bloomberg, 10/27/09)
  
• Market correction is expected this year as China and other countries cut stimulus funding, since the rally in global markets is basically liquidity-driven, says Peter Westin, the chief strategist at Aton LLC. Earlier in October, Bloomberg reported that investors were throwing money into the riskiest emerging markets at a remarkable pace, buying as if the global financial crisis was over. Emerging-market funds have absorbed more than US$40 billion so far this year, according to fund tracker EPFR Global. "That means that last year's outflow of US$40.1 billion has been completely erased," said Andrew Howell, an emerging-markets strategist at Citi. "We tend to get nervous when inflows surge, suggesting excessive optimism. However, at this point it seems early to get too worried." (Bloomberg, 10/22/09, 10/13/09)
  
• "For veteran emerging-market investor Mark Mobius and executive chairman of Templeton Asset Management... China remains the biggest investment destination for emerging-markets funds...Asia and emerging markets overall remain 'solid long-term investment opportunities.' " However, he recommends caution when it comes to short-term investment due to high volatility in today’s markets. (WSJ, 09/30/09)
  
• Emerging markets now are "too large to be ignored," despite the misconception that emerging economies have small, illiquid and volatile financial markets. Their market capitalization now represents 30% of the world’s market capitalization (as much as that of the U.S.), 50% of the global economy and the world’s top growth prospects, though they have only a 12% share in the MSCI All Country World Index. (FT, 09/28/09)
  
• "Developing-nation equities capped their steepest weekly decline in more than two months on mounting concern that a rally has outpaced economic growth after an unexpected drop in U.S. home sales and factory orders." Markets have not corrected and the economy showed a disappointing reaction to stimulus, says Marc Faber, the publisher of the Gloom, Boom & Doom report. (Bloomberg, 09/25/09)
  
• According to a Reuters report, Latin American stocks reached a new 2009 high on September 22, 2009, while Brazil's currency rose to the highest level in a year after the improvement of the country's ratings. Brazil's real strengthened 1% to 1.799 per USD, its strongest since exactly a year ago. The LatAm stock index rose 1.02% to 3,643.10, and the broader emerging markets' stock index added 1.27%. One day earlier, Bloomberg reported that stocks from developing-nations dropped 0.9% after trading at the highest level relative to profits since 2000, according to the MSCI Emerging Markets Index.
  
• "Emerging market stocks contracted the most this month after Chinese companies reported worse than expected earnings and Russia's economy contracted by a record amount, creating concerns about an economic recovery. The MSCI contracted 1.4%. On August 3 the MSCI closed above 855.47 on for the first time since the collapse of Lehman Brothers in September, as speculations of an easing to the global recession were bolstered by a positive report on U.S. manufacturing and rising commodity prices. In Asia, stock indices were supported by better than expected earnings from energy producers due to higher oil prices." (Bloomberg, 08/13/09)
• "Moody's reiteration...of Mexico's existing sovereign credit rating (Baa1), with a stable outlook, does not alter Citigroup's view that the risk of a ratings downgrade is a threat to Mexican equities later this year. Accordingly, the positive market action in response to the Moody’s announcement (including a rally in the peso through P$13.00/dollar) may be overdone." (Citi, 08/12/09)

p/s photos: Sharon Xu

Rediscovering k.d. lang

About 15-20 years ago, I had a decent collection of k.d. lang (thats how she writes her name, all in lower case), and then some friends came over and gushed over them and borrowed them. As in most things borrowed by friends, you never see them again. I was in New York last week and discovered my kind of candy store, it was a place called Bookoff - they sell second hand books, cds, dvds ... the difference being, they cleaned everything up first, even the cds, so the quality is as good as new. I went there twice in a week and spent hours poring over everything they have. How to beat $3 for a cd or $5 for a dvd, not pirated you know. I think I bought over 80 cds and 10 dvds. There among the ruins, they categorise according to the artiste's name, so it was easy, was a whole row of k.d. lang - I was estatic, grabbed the whole 4 albums taken from me before. I did that as well when I came across David Benoit and Malta, now that's what I call shopping.

Listening to kd lang again after such a long time, wow, she is still fantastic. She is basically a country singer but with genuine talent for harmonies and melodies. If you haven't heard of her before, go and have a listen and be mesmerised. She is like Patsy Cline updated for her times. Her full name is Kathryn Dawn Lang. I cannot describe her voice better than the music critic from New York Post who once said: "Few singers command such perfection of pitch. Her voice, at once beautiful and unadorned and softened with a veil of smoke, invariably hits the middle of a note and remains there. She discreetly flaunted her technique, drawing out notes and shading them from sustained cries into softer, vibrato-laden murmurs."

Enjoy... her music reminds me of ice teas, sitting on the verandah in the afternoon, watching the sunset ...aahhh...

What The Experts Are Saying About Emerging Markets Part 1

As of mid-October, the MSCI Emerging Market Index had gained 68% YTD, while MSCI global equities had increased 24%. Overall, emerging market asset classes have been supported by high global liquidity, improvements in risk appetite, falling core markets volatility (VIX), rebounding commodity prices and relatively stable fundamentals in comparison with past episodes of crisis. Moreover, emerging market countries' policy responses to the crisis has been relatively aggressive, planting the seeds for positive domestic demand. Plus, corporate earnings have been better than expected. Since reaching bottom in November 2008, emerging market equity markets have jumped 105%.

Downside risks remain in place due to uncertainties about the shape of the global recovery (V, U, W, V+U or inverted square root), the strong U.S. dollar (USD), higher U.S. Treasury yields, profit-taking and revival of global risk aversion. Moreover, miscalculations on the implementation of exit strategies around the globe post a significant risk. In September, emerging market equities jumped 12.7%, after declining 0.8% in August (+14.6% in July), lead by Latin America (20%) and Asia ex-Japan (10.8%). Equity markets in Europe, the Middle East and Africa increased 8% as positive news about the global economy continued supporting risk appetite. In the same month, world markets increased 6.6% versus 8.8% in July.

Outlook:

• Mark Mobius, chairman of Templeton Asset Management Ltd., reckons that emerging-market economic growth will be about zero this year, compared to a contraction of almost 4% in developed economies. He also said stocks in the BRIC nations--Brazil, Russia, India and China--are likely to rise by 30-40% in the next three to four years. (Bloomberg, 11/18/09)


• WSJ Columnist Jason Zweig: "Vinicius Silva, an analyst at Morgan Stanley, calculates that emerging markets are trading at 12.9 times their expected earnings over the next year. Since 1993, that average has been 12.8 times earnings. Emerging markets as a whole are neither a bubble nor a bargain." (11/10/09)


• According to Morgan Stanley (MS), the MSCI Emerging Markets Index might gain 25% by the end of 2010 and finish at 1,200, the highest two-year rally since 1989. Also, they have increased the forecast for 2010 profit growth in emerging markets to 40% (from an initial 28%). (Bloomberg, 11/10/2009)


• Dr. Nouriel Roubini said on October 4 that the current "party" on emerging markets and markets in general could continue for another six months but will eventually end ugly, as much of the rise in asset prices since March is another bubble created by a huge pool of global liquidity. "I'd argue that rally has been too much, too fast," Roubini said at the Inside Commodities conference at the NYSE. "If we have a V-shaped recovery, then it's justified and assets can rise further. But I believe we'll have U-shaped recovery, in which case those assets could move sideways or they could correct." (WSJ, 11/04/09)
• Dr. Nouriel Roubini said on October 4 that the current "party" on emerging markets and markets in general could continue for another six months but will eventually end ugly, as much of the rise in asset prices since March is another bubble created by a huge pool of global liquidity. "I'd argue that rally has been too much, too fast," Roubini said at the Inside Commodities conference at the NYSE. "If we have a V-shaped recovery, then it's justified and assets can rise further. But I believe we'll have U-shaped recovery, in which case those assets could move sideways or they could correct." (WSJ, 11/04/09)


• According to Arnab Das of Roubini Global Economics, emerging markets will extend their biggest rally in a decade as investors borrow dollars to buy stocks, bonds and currencies in the world’s fastest growing economies. Investors should take “overweight” positions in developing-nation assets, said Das, the London-based head of market research and strategy at RGE. The flow of U.S. dollars in emerging markets “is based on better fundamentals for the near term than the G10” through “better growth prospects because of structural reforms and ongoing integration into the world economy,” Das said. (Bloomberg, 11/04/09)


• According to Allan Conway, head of emerging market equities at Schroder Investment Management, there is room for further gains in emerging-market stocks in the next 1-2 years. Emerging nations will represent 70 to 75% of global growth for the “foreseeable future.” The BRIC countries are at an “early stage” of development that will accelerate, creating demand with rising disposable income for 2.9 billion population. (Bloomberg, 10/13/09)


• According to Michael Wang, emerging markets strategist at Morgan Stanley: “Previously, emerging markets were seen as a geared play on developed markets because of their dependence on exports. But this is different. Asia and Latin America haven’t had the fundamental problems in the banking sector that the developed world has had, so lending and credit growth has resumed rapidly and this is helping drive growth.” However, Mr Wang pointed out that “There is the possibility of an incipient asset bubble, particularly with regard to China, but that is not our base case scenario, which is still for them to go higher”. (FT, 08/03/09)
• "Research by Société Générale's cross asset team argues it is time to sell because the price-to-book value of emerging-market stocks is now higher than those in the developed world. The only other time this valuation measure was at a premium to that of the developed world was from mid-2006 to mid-2007. Emerging-market equities fell by two-thirds in the 12 months to the start of November 2008. (WSJ, 07/27/09)
• According to Citi equity strategists Geoffrey Dennis and Jason Press, “The correction in regional equity markets has reached the expected 10-15% range...Although the mood has turned sour on worries over the timing of economic recovery, there is little more downside from here and we expect regional markets to break out to the upside again later this summer.” (06/24/09)
• Jonathan Garner, the chief Asian and emerging market stategist for MS, wrote in a research note that "the MSCI Emerging Markets Index may climb to 985 by June 2010 from its closing price of 743.72 on June 18....Profits will rebound 28% next year after a 15% slide in 2009." Earlier, Garner forecast a 20% gain in 2010 and a 25% drop this year. (Shiyin and Paterson)

p/s photo: Yuriko Shiratori

Immigration To Australia & Travel By Australians

The following article from Sydney Morning Herald revealed interesting trends on immigration to Australia, plus the robust Aussie economy has sharply boosted overseas travel by Australians as well:

China has become Australia's biggest source of migrants, for the first time eclipsing the traditional main points of origin, New Zealand and Britain.

The latest migration figures show a record 6350 settlers arrived from mainland China in the four months to October, more than the 5800 who arrived from Britain and the 4740 who came from New Zealand.

The new Chinese ascendancy owes more to a collapse in migration from the traditional sources than it does to the 15 per cent annual growth in migration from China. The number of migrants from Britain is down 28 per cent over the year and the number from New Zealand is down 47 per cent.

An Adelaide University demographer, Graeme Hugo, said the global financial crisis had hit migration from traditional sources in ways that hadn't much affected China.

In March the Government sliced 18,500 off the skilled migration program for 2009-10, disproportionately hitting Britain for which skilled migrants account for eight out of 10 flights booked. Chinese migration, dominated by family reunions, suffered less.

Professor Hugo said New Zealand migration collapsed as people decided to hang on to their jobs. ''Just as someone from Adelaide is likely to try to hang on to their job in the global financial crisis rather than move to Sydney or Melbourne to take their chance at a time of tightening employment, I think that would be the case in Auckland as well,'' he said.

''It's an immediate response. New Zealanders don't need to apply to immigrate. There's no pipeline - that's why the response is so big.''

Figures for short-term arrivals, also released yesterday, show a change in where visitors are choosing to stay. NSW, traditionally the most popular state, received 6 per cent fewer visitors over the past year. Victoria and Western Australia received 9 and 15 per cent more visitors respectively.

At the same time the high dollar and the continuing effect of bonus payments sent a record 570,200 Australians overseas on holiday in October, meaning that for at least some of the month one in every 40 Australians was out of the country.

Departures climbed 20 per cent in October, swamping a 7 per cent recovery in arrivals.

NZ remained the most popular destination with travel to Indonesia and the US up 51 and 47 per cent on the previous year. Travel to Malaysia jumped 50 per cent, travel to the Philippines 40 per cent, and travel to Fiji 24 per cent.

The executive director of the Tourism and Transport Forum, Brett Gale, said the boom came at a cost to the local tourist industry.

''Over the past year departures have outnumbered arrivals by almost 600,000,'' he said.

''On the one hand, it's hurting domestic tourism, but more optimistically, there's an opportunity because it has made so many new airline seats available to bring overseas visitors into Australia.''

p/s photos: Aum Patcharapa Chaichua

Marketocracy Portfolio Updated - December 8, 2009

Value: $1,244,343.67 Cash: $98,971.05 NAV: $12.44

price history
		SMF m100 S&P 500 DJIA Nasdaq

recent returns vs. major indexes
		MTD YTD SMF 3.17% 70.43% S&P 500 0.97% 25.27% DOW 0.43% 18.37% Nasdaq 2.32% 39.14%

recent returns
		RETURNS Last Week 4.11% Last Month 9.05% Last 3 Months 3.46% Last 6 Months 8.05% Last 12 Months 93.60% Last 2 Years N/A Last 3 Years N/A Last 5 Years N/A Since Inception 22.83% (Annualized) 16.27% S&P500 RETURNS Last Week 1.36% Last Month 5.93% Last 3 Months 9.36% Last 6 Months 18.90% Last 12 Months 34.15% Last 2 Years N/A Last 3 Years N/A Last 5 Years N/A Since Inception -8.92% (Annualized) -6.62% RETURNS VS S&P500 Last Week 2.75% Last Month 3.12% Last 3 Months -5.90% Last 6 Months -10.85% Last 12 Months 59.45% Last 2 Years N/A Last 3 Years N/A Last 5 Years N/A Since Inception 31.75% (Annualized) 22.89%

alpha/beta vs. S&P500
		Alpha 25.58% Beta 1.14 R-Squared 0.76

turnover
		Last Month 16.86% Last 3 Months 62.34% Last 6 Months 152.60% Last 12 Months 410.23%

		Symbol Price Shares Value Portion of Fund Inception Return BDD $15.72 5,000 $78,600.00 6.22% 53.98% MGM $10.58 9,500 $100,506.20 8.21% 42.69% Details F $8.92 10,000 $89,225.00 7.13% 34.05% Details PLD $13.84 8,118 $112,353.12 9.05% 25.45% Details NYB $13.39 6,000 $80,340.00 6.55% 22.22% Details NVDA $16.00 5,000 $80,000.00 6.41% 19.80% Details MIDDLE QSII $61.35 1,500 $92,025.00 7.50% 19.66% SNV $2.43 25,000 $60,750.00 4.63% 15.40% GE $16.10 4,000 $64,400.00 5.19% 8.72% LOW $22.81 3,500 $79,835.00 6.44% 4.87% JNPR $27.36 2,000 $54,720.00 4.37% 3.40% Details PSQ $45.41 3,000 $136,230.00 10.98% 0.30% Details KBW $25.30 4,500 $113,850.00 9.34% -6.81% Details

Asset Class Returns As At 30 November 2009

Time for the monthly review of the performance of various asset classes. Emerging market stocks have had a fantastic YTD, chalking nearly 70% return, some of that attributable to the USD carry trade, but also due to the immediate stimulus programs enacted by many emerging markets' governments. When you realise that most of these countries did not have as massive a wealth destruction effect as say in the US and much of Europe, one can understand the liquidity awashed in emerging market.

The other important sector which I have highlighted last month was that the commodities have started to move, which is also why the CPO saw some good upwards action last month. I suspect that its not pertaining to the fundamentals of commodities per se but rather some of the switching by USD carry trade into commodities.

If you look at the US equity markets, though many seemed fearful as it climbs towards 11,000 on the Dow, they are just up broadly by 25% on a YTD basis.

Surprisingly, junk bonds are also posting unusually large returns, or what we call high yield bonds. That can be explained by the deluge of funds moving out of cash markets and TIPs seeking higher returns one the risk aversion mentality subsided, causing a sudden ramp up in demand for junk bonds. However, the return last month for junk bonds has been muted as many are more circumspect now that the Dow has breached the 10,000 level.

p/s photos: Jessica C. (Wacoal's top model)

Now For Some Accounting Humour!

You cannot really have business and finance humour without hitting on the accountants, so here goes:

Q: When does a person decide to become an accountant?
A: When he realises he does not have the charisma to succeed as an undertaker.

----------------------------

Q: Why do some accountants decide to become actuaries?
A: They find bookkeeping too exciting.

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Q. Why do audit firms only have 10 minute coffee breaks?
A. If the breaks were longer, they'd have to retrain all the staff.

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A patient was at her doctor's office after undergoing a complete physical exam. The doctor said, "I have some very grave news for you. You only have six months to live."

The patient asked, "Oh doctor, what should I do?"

The doctor replied, "Marry an accountant."

"Will that make me live longer?" asked the patient.

"No," said the doctor, "but it will SEEM longer."

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A 54-year-old accountant leaves a letter for his wife one evening which read: "Dear Wife, I am 54 years old, and by the time you get this letter I will be at the Grand Hotel with my beautiful and sexy eighteen year old secretary."

When he arrived at the hotel, there was a letter waiting for him that read as follows: "Dear Husband, I too am 54 years old, and by the time you receive this letter I will be at the Savoy Hotel with my eighteen year old toy boy. Because you are an accountant, you will surely appreciate that l8 goes into 54 many more times than 54 goes into 18."

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There once was a business owner who was interviewing people for a division manager position. He decided to select the individual that could answer the question "how much is 2+2?"

The engineer pulled out his slide rule and shuffled it back and forth, and finally announced, "It lies between 3.98 and 4.02".

The mathematician said, "In two hours I can demonstrate it equals 4 with the following short proof."

The physicist declared, "It's in the magnitude of 1x10¹."

The logician paused for a long while and then said, "This problem is solvable."

The social worker said, "I don't know the answer, but I a glad that we discussed this important question.

The attorney stated, "In the case of Svenson vs. the State, 2+2 was declared to be 4."

The trader asked, "Are you buying or selling?"

The accountant looked at the business owner, then got out of his chair, went to see if anyone was listening at the door and pulled the drapes. Then he returned to the business owner, leaned across the desk and said in a low voice, "What would you like it to be?"

---------------------------

How accountants do it...
Accountants do it by the book.
Accountants do it within budget.
Accountants do it to the bottom line.
Accountants do it with double entries.
Accountants do it between spreadsheets. Accountants are Certified to do it in Public.
Accountants do it without losing their balance.

----------------------------

You might be an Accountant if...

you had no idea that GAP is also a clothing store.

• 
  
during the movie Indecent Proposal you did a NPV calculation in your head.

• 
  

p/s photos: Suzanne Sae

Mulan & Funny People

Saw two movies by default not by choice, but they were major surprises for movie watching in 2009. The first was Mulan, I was checking out the Gold and Premier class seats at Mid Valley and all bloody seats were sold out except for Mulan. I said, damn why are they showing the bloody musical cartoon again, must be the holidays!! Was corrected that it was a big budget piece remake of Mulan starring Zhao Wei. Spent too long to park the car, too early to eat dinner, so end up buying tickets to Mulan ... gee, there goes one of my ration of 3 original films in Mandarin for the year.

At the end of the movie, the people leaving the theatre were ALL in pairs, and I bet you all the guys were dragged to see the movies by their female dates. No sensible male patron would be willing to suggest seeing Mulan starring Zhao Wei. No one would even consider Zhao Wei as anywhere believable as a expert warrior (even in disguise). Oh ... but the brilliant Jingle Ma was the director.

Take all that into account, it was a surprisingly fantastic movie. Its about Mulan (whose story we all know by now) but its a lot more than that - there were added layers to the storyline. In the end, it was a very strong anti-war movie, it questions the actual relevance of fighting and dying for a country or your king when you are really all just minor pawns in the whole greater scheme of things. Its about brotherhood and loyalty, its about the greater good, its about coming out of the bloodshed with your integrity intact. Oh, yes, there is a powerful unrequited love story as well.

The other movie was Funny People by Judd Apatow, starring Adam Sandler, Seth Rogen and Leslie Mann. I really thought it was going to be another Adam Sandler piece of low brow but enjoyable movie. Its about a successful stand up and a few other up and coming stand up comics. But man, the show is not only funny, it tries to tackle deeper issues which I never thought Apatow, Rogen or Sandler would be able to do. Reviews of this film have been all over the board. Some people have loved it and said it was the funniest movie of the year, some people have hated it and called it self-indulgent and elongated.

It puts the scars and vulnerabilities of stand up comedians, their anxieties and stress, all out in the open. It cuts right through these "funny people". It also attempts to deal with issues of mortality when that collides with mid life crisis. Trying to patch up things we didn't do too well in the past - the nuanced things about regret, redemption and forgiving yourself. The heavy subject matter of settling, for only so-so ... in many things in life.

Seth Rogen was great as Ira, the young comedian that Sandler employed as his comedy writer. Its a fantastic movie because the movie fleshes out the character of the main guys brilliantly, you identify with them all within the first half hour. You feel their pain and happiness. Ira's clumsy crush with Aubrey Plaza was too funny but very understandable.

This is certainly one of the funniest and most heart felt movie of the year - very intelligent, nuanced, not all living happily ever after but kind of ... kind of like real life.

Some Interesting Political Cartoons

China Is Really Aware That It Has a Bubble Situation

Unpaid credit card debt in China has risen by a horrifying 126.5% from a year ago. Beijing should have known this very well as it was central government which instructed the banks to lend like crazy 12 months ago. As at the end of September 2009, there was 7.43bn yuan of credit card debt that was at least 6 months overdue. Mainland Chinese banks pushed those credit cards aggressively when Beijing "encouraged" the banks to be "easier with loans and credit disbursements". Beijing had encouraged banks to expand that line of business thinking that it would boost retail sales. Well, it may have had that effect, but they now also have a credit binge problem. The overdue amount represented 3.4% of total credit card debt.

The problem can get a lot worse because as it stands, the penetration rate in China for credit cards is only 0.13 cards per person now. Compare that to the US, a place where like New Zealand for sheep, there are 1.5bn cards for its 300m population - unbelievable, 5 cards for each person, including kids.


p/s photos: Marie Ann Umali

Country Default Risk

The Dubai debacle has prompted Bespoke Research to put up the various country risk of default. There are CDS being traded that measures the cost of insuring $10,000 of country debt for 5 years. If you look at the table, Dubai's cost is $541, which is comparatively a lot better off than say, Argentina $985, Venezuela $1,170. However, $541 is a very very high figure. You can get a sense of just how global traders view Dubai's risk of default by looking at countries that are a bit cheaper to insure: even the hellish Iceland is at just $398, however that has dropped from a highly precarious $976 at the end of 2008; the problematic Russia cost only $218.

Surprisingly, Indonesia's risk to insure is very high at $231. Malaysia looks like a hero among these countries, costing only $117. The risk traders are not stupid, they do look at everything, they have China at just $87.

The USA still have its reserve status firmly intact, despite the recent rumblings over the dollar and the furiously overworked money printing press by the Fed, it only cost $32 to insure. Australia is at a highly enviable $34.

I should really start to trade these country default CDS. I think on a 12 month view, my likely preferred trades in my order of attractiveness would be:

1) Buy Japan at $81 (buy as in hoping that the cost to insure would go much higher over a 12 month period).

2) Buy US at $32.

3) Buy Australia at $34.

4) Sell Indonesia at $231.

5) Buy Egypt at $241.

6) Buy Mexico at $159.

7) Sell the Philippines at $208.

Funnily enough, I cannot really place a bet on Malaysia, don't really have a strong clue up or down ..lol. Even curiouser was that I have a better sense of countries where their risk is seeming rising, but not as strong a conviction for countries on the improve.

Oh, to explain my top 3 bets: Japan's public debt is actually quite insurmountable and is reaching a climax - they keep having to change the Prime Minister because no one has the political will to effect the changes, something's gotta give soon; the USA reserve status is overstated, and while I think the status will remain, it won't be as strong as before and a gradual realignment is necessary (i.e. weaker dollar) to get the country on a proper debt reduction diet; Australia's euphoria is largely centered on China's state funds voracious appetite for resources, I do not expect that to go unabated, a lot more downside than upside from here, I expect the OZ government to be a bit more restrictive in "selling natural resources" to China in the months ahead.

p/s photo: Olivia Ong