GIC lost 41%? Accountabiliity please!

[Ramseth]

Finally that 41% number should be clarified in view of the absolute statement that they were sitting heavy in cash. Is it 41% inclusive of everything or 41% only for remaining portfolio stocks ? Does it include real eastate ?

I can't blame Lamei for branding you a PAP apologist. When a PAP MP gives an unfavorable figure categorically, you can still invent qualifications for her. Please join her, she'll appreciate your help.

 

[lockeliberal]

Dear Ramseth

Well I am not a politician or a wannabe politician like bonnie and clyde. Its policy that is interesting to me and sometimes I just look at the policy to academically .......not enough of the politician in me




Locke

 

[scroobal]

Finally that 41% number should be clarified in view of the absolute statement that they were sitting heavy in cash. Is it 41% inclusive of everything or 41% only for remaining portfolio stocks ? Does it include real eastate ?

Locke

I expect them to be heavy in cash and bond when the general outlook turned dim some 3 quarters ago. But 41% is a mind boggling figure as it is conservative portfolio. I am pretty certain its a mistake.

 

[funglung]

There are quite a few speculation about how much GIC lost in this crisis. As the GIC is directly under the charge of two heavy weights, Mr Lee Kuan Yew and Dr Tony Tan, it seems that such speculations are really "undesirable " and could well be kept as National Secrets forever.

Mr Lee Kuan Yew keeps saying that such investments are for "Long Term" but my question is, is it "Long Term" or "Wrong Term" already? Besides, with due respect, Mr Lee Kuan Yew is already at his ripe old age and many of his age would have enjoyed retirement life fully elsewhere in the world if they have his kind of wealth and social status.

Mr Goh Chok Tong's assertions about good governance keep ringing in my mind. He said a good government must be transparent and accountable, among other things like being clean. But how are we going to hold the present government accountable if whatever losses we suffer as a nation are being swept away as "Long Term" investment? Especially so when nobody knows whether one could live up to that definition of Long Term (which is not categorically defined as how long?), least a person of 80 over years old.

A WP member, Choon Yong, has an interesting account of what goes on in parliament. According to him, Madam Lim Hwee Hua uttered the figure 41% when Ms Sylvia Lim pressed for an answer to how much GIC has lost. This is really an interesting figure, though, not very surprising.

The PAP government has always claimed the figures of GIC as "National Secret". I am always very puzzled. If such important figures are being classified under "National Secret" how could accountability be exercised on the government itself? Well, I can understand that specific investment portfolio strategy is sensitive information but there is no necessity to keep aggregate figures as "National Secret" at all. Nothing to hide from there. If we are going to practice what good governance whereby accountability is a fundamental pillar, then specific figures and information should be made available. Figures like the amount of money in GIC and the percentage of gain or losses.

It is intriguing indeed. While the PAP government is ready to boast about how much GIC has earned in the past in a fascinating way (claiming to have how many percentage of return over how many years... etc), but when it comes to losses, it has suddenly become so secretive! It practically means that when it comes to claiming credits, PAP government is all too fast to claim it. But when it comes to take responsibility for lapses (well, do you remember Mas Selamat?) and losses, it suddenly sweeps everything under National Secrets!

If any figures are all National Secrets, then earnings from the past should be classified as National Secrets as well! Of course, that would basically mean that this PAP government does not believe in accountability at all. In Hong Kong, such critical figures would be available to public for scrutiny and it really makes me wonder why would Mr Goh Chok Tong go all the way to Hong Kong to teach something that PAP does not practice while Hong Kong government is already practicing! Without adequate information released, information that could well undermine PAP's leadership being hidden away, how could accountability be exercised at all?

Anyway, it is even more intriguing that the National Press has CONVENIENTLY omitted that "sensitive" figure 41% from their daily reports of the parliamentary debates! All is well when there are coordinated effort to avoid mentioning such potentially damaging data on National papers!

There was a report by foreign analyst that the amount of money that GIC holds initially could well be as high as $500 Billion. So if this magic figure of 41% is true, the losses of GIC alone would be $225.5 Billion! Although the official report of Temasek Holdings' losses is $58Billion at the end of 30 Nov 2008, but I guess this figure is grossly underestimated. This is basically because share prices has further tumbled in December 2008. The losses could be as high as $80 Billion by the end of last year.

Thus the total potential losses of GIC and Temasek holdings could well be $300 Billion! What does that mean? It means that it is a loss of $100,000 per Singapore citizen!

While PAP government has always been reluctant in setting up a formal system of social welfare for Singaporeans because it could squander off all our reserves, but it seems that the reserves could well be lost in a more dramatic and faster way in just one financial crisis like this one. The cruel truth is, such losses benefits no Singaporeans while at the very least, a social welfare system could at least benefit quite a number of Singaporeans, especially so in such economic crisis!

We have paid millions of dollars to PAP ministers annually for such mediocre performance which result in such losses that benefits no Singaporeans at all. Some may argue that such losses are "reasonable" because other funds around the world are making the same losses. BUT, please don't forget that we are paying our political office holders HIGHEST in the whole world but yet we are getting mediocre average results same as others? So the fundamental question is, are these "TALENTED ELITES of HIGHER MORTAL" value for money?

I believe this is not merely my ranting. Quite a number of people of middle class income came to my shop to ask me to make the same point. Our ministers are over valued. Their ministerial pay is just too ridiculous. These are not just normal ranting that we used to see in internet forums. These words are uttered by REAL Singaporeans on the street, some with very high qualifications.

This financial crisis has exposed the myth that PAP ministers are "extraordinary talents" that deserved to be paid millions of dollars per year. The PAP ministers may be highly qualified but they are just human, not "HIGHER MORTAL". Are they the "BEST"? Cream of the crop? I really doubt so. The reason being, the BEST and TOP people do not use monetary return as a value yardstick label to stick on them. These people know their limitations and would take responsibility and account for their mistakes. Obama is a good example. Ma Yinjiu is another good example.

I do not think with the present PAP mindset, we will be able to extract accountability from PAP ministers themselves. I do not believe that one could check on himself effectively without trying to shy away from responsibility. While billions are lost, not a single word of apology is heard from PAP ministers. The tightly controlled newspaper is still trying to trumpet it off as "better than others"! Of course, the usual rant that any losses are "temporary", no apology about that, no regrets about that but all for long term. While our children or even grand children in the far future "suffer" from such WRONG TERM investment, they wouldn't know who are the ones who are supposed to be responsible for these losses anyway.

So, this is the kind of accountability that PAP is teaching from their bible.

Goh Meng Seng

With that 400++ billions LKY robbed and squeezed and bleed from Singkies into his Temasick and GIC, LKY got a huge war chest to buy and buy favours and corrupt all institutions in Singapore to allow him to continue to rape Singkies and their future.

In all countries, religious institutions spoke out against injustice.

IN SINGAPORE, ALL THE CHURCHES AND THEIR MINISTERS KEPT QUIET.

THEY SOLD OUT TO CAESER AND FOR THE 40 PIECES OF SILVER, THEY KEPT THEIR TONGUE SILENT

OR THEY GO AND TELL THEIR CONGREGATIONS TO SEEK SALVATION IN THE NEXT WORLD.

ALLOWING THEM TO LIVE IN SEMI SLAVERY IN THE REAL WORLD WITH ALL THAT THEY CAN EARN ROBBED FROM THEM TO BE PART OF THAT 400++ BILLIONS IN LKY CONTROL

LKY IS THE SOLE SOURCE OF EVIL AND CORRUPTION IN SINGAPORE

 

[Goh Meng Seng]

I expect them to be heavy in cash and bond when the general outlook turned dim some 3 quarters ago. But 41% is a mind boggling figure as it is conservative portfolio. I am pretty certain its a mistake.

Dear Scroobal,

Actually, I am not surprised at all that this is the case. There are signs that GIC might have gone overboard in investing aggressively over the past decade. Many people might have forgotten about the Global Crossings or the other more notable failures of GIC but by the look of the optimism shown by LKY over the past two years you would have guessed how the turn out of GIC would be.

Yes, normally for a National Wealth management company, it should stick to some proven ways of investing but over the past few years, Singapore was so engrossed in its own self congratulatory success of financial liberalization and there is a skewed favor into the financial sector caused by the tremendous greed on (fraudulant?) profiteering in the sector.

Such optimism is shown in LKY's "Golden Period" speech as well as the "stunning" prediction of oil prices breaching US$200 per barrel by end of 2008. SIA has just announced its financial report and it seems that along with those power station companies, it has made heavy bet on such "stunning prediction" and lost a whopping $314 million on hedging on the oil futures!

As I have stated in my previous blog post, Singapore has suddenly become a Nation in Gamble; almost every GLCs are involved in the craze of heavy "betting" based on a set of "stunning predictions and foresight".

You are surprised? I am not. It is within my expectation and it may be more in time to come.

Goh Meng Seng

 

[scroobal]

Dear Scroobal,

Actually, I am not surprised at all that this is the case. There are signs that GIC might have gone overboard in investing aggressively over the past
You are surprised? I am not. It is within my expectation and it may be more in time to come.

Goh Meng Seng

Bro, I still can't believe it. Global Crossing / SIA are all Temasek not GIC. Temasek is not a shock at all after 2 massive investments failed within months - Micropolis and Global Crossing under HC. They also showed their absolute lack of political acumen and business intelliegnce during the Shin Crisis - appointment of an advisor disliked by Royal Court and not being aware of Thaksin's problems.

As for GIC, they got one of the best bondsman in the world. Their real estate is premium. In fact as we speak I know of a major blue chip conglomerate, divesting in consumer sector to raid the premium commercial property sector. Addresses that are landmark, one of kind and hold a firm print in that country or city.

Though this not an anecdote or an example (one swallow does not make a summer), I had the good fortune to be treated like a duke one day after GIC completed purchase of an Eastern European Hotel. One seeing my SGP passport, they thought I was with GIC only to be dumped the next day with usual service. That property was an absolute steal and it commands a prime spot. I brought this up, as Eastern Europe is going great guns compared to the rest of the world.

I just can't believe why they cannot reveal some basic figures.

 

[Goh Meng Seng]

Bro, I still can't believe it. Global Crossing / SIA are all Temasek not GIC. Temasek is not a shock at all after 2 massive investments failed within months - Micropolis and Global Crossing under HC. They also showed their absolute lack of political acumen and business intelliegnce during the Shin Crisis - appointment of an advisor disliked by Royal Court and not being aware of Thaksin's problems.

As for GIC, they got one of the best bondsman in the world. Their real estate is premium. In fact as we speak I know of a major blue chip conglomerate, divesting in consumer sector to raid the premium commercial property sector. Addresses that are landmark, one of kind and hold a firm print in that country or city.

Though this not an anecdote or an example (one swallow does not make a summer), I had the good fortune to be treated like a duke one day after GIC completed purchase of an Eastern European Hotel. One seeing my SGP passport, they thought I was with GIC only to be dumped the next day with usual service. That property was an absolute steal and it commands a prime spot. I brought this up, as Eastern Europe is going great guns compared to the rest of the world.

I just can't believe why they cannot reveal some basic figures.

There is one LTC, Long Term Capital that went bust. Was that one under GIC or Temasek?

True, Eastern Europe is a good shopping ground now if you are into property investment. Buying up Tokyo prime properties at low price in the next few quarters may be a good idea too but what about Marina Sands? LOL!

Secrecy is the best weapon for incompetency.

Goh Meng Seng

 

[scroobal]

There is one LTC, Long Term Capital that went bust. Was that one under GIC or Temasek?

True, Eastern Europe is a good shopping ground now if you are into property investment. Buying up Tokyo prime properties at low price in the next few quarters may be a good idea too but what about Marina Sands? LOL!

Secrecy is the best weapon for incompetency.

Goh Meng Seng

Though there were rumours about GIC investing in LTCM then, most unlikely as LTCM was a massive hedge fund. GIC ambit or any conservative / moderate portfolio would not have allowed it. Those guys punt on russian rubles using the black scholes model with not one but 2 nobel laureates and got screwed big time.

I am more convinced now, its a mistake.

 

[besotted]

I think the 41% loss is acceptable given how much asset markets were battered worldwide

If you count from the high or on a one year basis that number is reasonable

But the lack of transparency in disclosure is something that needs improvement

 

[lockeliberal]

Dear GMS

I am afraid that LKY was following the global financial consensus and got screwed as a result. Now did GIC follow LKY or was GIC and Temasek following the established liberal economic consensus which turned out to be wrong with a large dose of hindsight.

I am afraid that I disagree with you that "one bad prediction" from old man leads to a stunning series of bad judgements from all other companies in Singapore.

Nothing wrong with betting the SG economy heavily on financial and trade liberalization. There have always been financial centers throughout history and nothing wrong with developing SG's financial services industry. Was it overskewed I doubt it as they were alway concerned enough to retain manufacturing as a key economic component besides that of services



Locke

 

[Goh Meng Seng]

Dear GMS

I am afraid that LKY was following the global financial consensus and got screwed as a result. Now did GIC follow LKY or was GIC and Temasek following the established liberal economic consensus which turned out to be wrong with a large dose of hindsight.

I am afraid that I disagree with you that "one bad prediction" from old man leads to a stunning series of bad judgements from all other companies in Singapore.

Nothing wrong with betting the SG economy heavily on financial and trade liberalization. There have always been financial centers throughout history and nothing wrong with developing SG's financial services industry. Was it overskewed I doubt it as they were alway concerned enough to retain manufacturing as a key economic component besides that of services



Locke

Dear Locke,

First, you must understand that GIC is NOT a hedge fund.

Secondly, it is a SWF, a fund manager for a country's reserves.

Third, as a SWF, you don't just place "bets" to try to gain more returns so that your fund managers will get higher bonuses and pay rise.

Fourth, if you compare to other SWF that lose only 10% to 15% (reported in some funny absurd ST reports to justify GIC losses), there is something you got to learn to differentiate between a SWF vs a normal hedge fund which objectives are totally different in nature.

Fifth, if Temasek decided to put 40% into finance companies is not considered as "skewed", then I really don't know what is.

Sixth, there is a high possibility for GIC to emulate Temasek's investment strategy.

Seventh, there is nothing wrong in developing financial centre but there is something very wrong to try to develop a financial centre by "free for all" mentality. Deregulation is a BIG MISTAKE.

If that does not get into you, then I really don't know what will.

Goh Meng Seng

 

[tonychat]

Now you know why is this happening, because there are no protest. That is why. By the time, those govt wakes up, $56 billion is gone. If sinkies protest, maybe lost only 1 or 2 billion.

 

[exSINgaporean]

Dear Goh Meng Seng, the reply to why GIC has to be remain under secrecy is in this interview. Pls take note from 1.40 mins onwards. You may have seen it before, but I would like to post it for those who haven't.

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Key points:

1. Spore SWFs has to remain non-tranparent:
a. To pre-empt any anticipations of the market to GIC's move.
b. To pre-empt any expectation from Spore citizen on the surplus
2. Spore SWFs invested in US troubled banks because of their brand names.
3. Compared to Warren Buffet who is also a long-term investor, MM Lee says Warren Buffet needs to give returns to his shareholders every year, but GIC doesn't have to.

What MM Lee have said is certainly controversial and disputable.

..............................................................................................

You see how the world media degrade the old fox?

During his prime years..even after stepping down as PM, only the best world-calss reporters, professors, interviewers like Larry King were allowed to interview old pimp.

Look at this young interviewer, so that that as we Cantonese said: "Cust hair have not fully grown yet". Who is she...a green horn.

Lee Kuan Yew is like dirt to the rest of the world. In Singapore he isstill a bit better...like SHIT.

 

[tonychat]

Talk so much no use, you guys got balls to protest or not. You know they are not transparent.

By not protesting, you have forsake your country and stop acting like you care the people or the country. Act only.. What a sinkie..

 

[scroobal]

Dear GMS

I am afraid that LKY was following the global financial consensus and got screwed as a result. Now did GIC follow LKY or was GIC and Temasek following the established liberal economic consensus which turned out to be wrong with a large dose of hindsight.

I am afraid that I disagree with you that "one bad prediction" from old man leads to a stunning series of bad judgements from all other companies in Singapore.

Nothing wrong with betting the SG economy heavily on financial and trade liberalization. There have always been financial centers throughout history and nothing wrong with developing SG's financial services industry. Was it overskewed I doubt it as they were alway concerned enough to retain manufacturing as a key economic component besides that of services
Locke

I am getting the impression that you might not be aware of GIC's role. It is not like any other fund and should not be like any other fund. Its the state reserves. Its should not even emulate the best funds in the private sector.

GMS is correct on all counts. In fact it does not fall within the usual definition of SWT which generally is the investment arm of the state. Temasek is a classic example of an SWT where the actual prupose is investment. GIC should keep pace with real inflation with a premium in pips above that. More conservative than most.

I certainly expect GIC to lose value but not to that scale. A drop of 15% would require a full scale inquiry even in this market.

Remember GIC is not the investment arm of the Government. Ist the entity that looks after the preservation of value of the state reserves.

 

[UseYourBrain]

You are just wasting your time whinning. Trying to display your finance 101 theory or your Harvard "how to manage your money" are of no use. The more you talk the more money is leaving the vault. Go and do a petition get thousand and thousand of signature. Make a proper police report and send the petition to Istana. They cannot refuse you.

Or else I am tucking in now Yawwwwwwwwwwnnnnnnnnnnn!!

 

[Goh Meng Seng]

You are just wasting your time whinning. Trying to display your finance 101 theory or your Harvard "how to manage your money" are of no use. The more you talk the more money is leaving the vault. Go and do a petition get thousand and thousand of signature. Make a proper police report and send the petition to Istana. They cannot refuse you.

Or else I am tucking in now Yawwwwwwwwwwnnnnnnnnnnn!!

I don't know but you mean getting petition, making police report and going protest will make a difference?

Goh Meng Seng

 

[Ramseth]

Make a police report? Under which Act, which Section and against who?

 

[Avantas]

Sign the petition for Nathan to open Temasek's accounts here:

http://www.petitiononline.com/mod_perl/signed.cgi?loss2009

“Render unto Caesar the things which are Caesar’s, and unto God the things that are God’s” (“Ἀπόδοτε οὖν τὰ Καίσαρος Καίσαρι καὶ τὰ τοῦ Θεοῦ τῷ Θεῷ”) (Matthew 22:21).

Perhaps this explains the apathy among Christian folks to the govt's lack of accountability? Let them be accountable to God.. no need to us?

 

[Patriot]

GIC lost 41%? By itself, a percentage means nothing at all!

41% of what amount?

If a Public Listed Company were to release its results to the Stock Exchange that it had lost 41% of its capital, the Board of Directors would definitely be strongly queried by the shareholders at the Annual General Meeting and the management will be held responsible for such a massive loss and might even be asked to resign or ousted from the Board by the shareholders.