What is KJ's problem?

[jw5]

Track records not only based on whether there are defaults on the part of IMF but rather, on the types of loans it puts up. There are quite a bit of bad debts, some of them written off. And these loans are in the hundreds of millions to billions.

Goh Meng Seng

The important issue is how much debt the countries that had lent money to the IMF had to write off, due to IMF's inability to pay them.

It is not so important how much debt IMF had to write off due to their borrowers being unable to pay them. IMF is there to help countries in trouble. Do you expect them not to have any bad debts written off?

For someone who has a second class degree in economics and has supposedly run a business for years, your lack of such basic knowledge and concepts is shocking.

 

[Cruxx]

Please don't make anyone with basic knowledge of finance, accounting and business, laugh at your ignorant comments.

Meng Seng is lending credence to the oft-repeated claim that the opposition are not good enough to replace the PAPzis in government. :(

 

[jw5]

Meng Seng is lending credence to the oft-repeated claim that the opposition are not good enough to replace the PAPzis in government. :(

It's not the lack of knowledge that's the problem, it's the unexplainable ego.

 

[Goh Meng Seng]

That's why I have second upper for econs.

You don't just look at how much money an institution can pay you while ignore the basic system, structure and business model that institution engaged in. That is why many people fall for ponzi scam because they only look at the money receive and they are happy, without putting a serious thought on how the money come from or whether the institution which they put their money in has sound business model and principles.

Unless you are saying Singapore should also be generous and going around to "save" or "help" poor countries, then we do not need to be bothered by IMF's bad debts problems and the risky portfolio it holds. Londontrader is partly right to say that IMF is just like an international loan shark which set out very demanding criteria and terms for its loans. But just like any other loan sharks, it will inevitably take up very high risk portfolios as well.

Singapore is just a small country without much economic depth and scope. Plainly, just a little red dot. PAP has been emphasising the importance of our foreign reserves due to that but are we ready to lose these money? If yes, then fine, go ahead. Even with that, as Londontrader has said, it is only right to get proper empowerment and endorsement from the parliament or even referendum. If we are not ready to write off such huge amount, then think carefully.


Goh Meng Seng

The important issue is how much debt the countries that had lent money to the IMF had to write off, due to IMF's inability to pay them.

It is not so important how much debt IMF had to write off due to their borrowers being unable to pay them. IMF is there to help countries in trouble. Do you expect them not to have any bad debts written off?

For someone who has a second class degree in economics and has supposedly run a business for years, your lack of such basic knowledge and concepts is shocking.

 

[Huat-Ah]

Look who is talking now ?

Our King Of Loser in Politics .... ===> Mr Goh Meng Seng ! Aka Ex NSP Secretary General

 

[cass888]

Good luck. This line will be spread far and wide at the next GE.

That's why I have second upper for econs.

 

[steffychun]

That's why I have second upper for econs.

You don't just look at how much money an institution can pay you while ignore the basic system, structure and business model that institution engaged in. That is why many people fall for ponzi scam because they only look at the money receive and they are happy, without putting a serious thought on how the money come from or whether the institution which they put their money in has sound business model and principles.

Unless you are saying Singapore should also be generous and going around to "save" or "help" poor countries, then we do not need to be bothered by IMF's bad debts problems and the risky portfolio it holds. Londontrader is partly right to say that IMF is just like an international loan shark which set out very demanding criteria and terms for its loans. But just like any other loan sharks, it will inevitably take up very high risk portfolios as well.

Singapore is just a small country without much economic depth and scope. Plainly, just a little red dot. PAP has been emphasising the importance of our foreign reserves due to that but are we ready to lose these money? If yes, then fine, go ahead. Even with that, as Londontrader has said, it is only right to get proper empowerment and endorsement from the parliament or even referendum. If we are not ready to write off such huge amount, then think carefully.


Goh Meng Seng

Ahem, Second Class Upper and you boast your knowledge here?

You're worse than Tan Jee Say-

 

[londontrader]

The IMF isn't a government the last time I checked. Why the hell do you even bother responding if you can't even read?

Hey Cruxx,

Are you trying to be funny or just plain dumb?

Here's what I was responding to :

You wrote:

"Yes, steffychun is right. Governments are different from households and individuals. They can borrow any amount they like. After all, they can just print $ to repay their creditors. What can go wrong with printing money?"

Here what's Steffy wrote (which you reference):

"you people are confusing individual-to-individual loans and global economic governance and IOs."

The topic under discussion is the IMF, which should be clear any simpleton
Hence, my reply that the IMF can't print money precisely for the reason you now state

got that? Duh!

 

[londontrader]

You don't just look at how much money an institution can pay you while ignore the basic system, structure and business model that institution engaged in. That is why many people fall for ponzi scam because they only look at the money receive and they are happy, without putting a serious thought on how the money come from or whether the institution which they put their money in has sound business model and principles.

GMS,

Looks like we share very different views about IMF Pledges, loans, etc.
This illustrates how impt it is for some form of Parliamentary oversight (in Singapore) when these decisions are made
A diversity of opinions is an indication of a healthy and functioning democracy
That's the direction Singapore should be heading

 

[steffychun]

GMS,

Looks like we share very different views about IMF Pledges, loans, etc.
This illustrates how impt it is for some form of Parliamentary oversight (in Singapore) when these decisions are made
A diversity of opinions is an indication of a healthy and functioning democracy
That's the direction Singapore should be heading

If you want the global economy to falter then dont loan at all. Go to DC and protest in front of the IMF.

 

[londontrader]

Like any organization that extends credit, the IMF loses money when the money does not get repaid. In the history of the IMF, there have been plenty of write offs and hair cuts. If you look at the current IMF loan portfolio, you can see an abundance of loans which look as if they will never get paid back. Without looking too far back, let's look at the loans which have been extended since the crisis of 2007. Do you think all of the money will be repaid?

The IMF avoids bankruptcy not because it is anything special. It does so because when things get bad, they can always pass the can around to raise more money. And in the past, the US, Europe and Japan have always come up with the $.

The world has however changed since 2007. Europe, one of its 3 largest contributors, is now the party in need of aid. The US and Japan are in bad fiscal condition. China has $ but they have an agenda which wants a rewriting of the world order in their favor which means that any money they cough up is going to come with some serious strings.

The IMF loses money on loan defaults, Yes
So the question is how does the IMF raise the funds to make these loans in the 1st place
The answer is from the quota contributions from member nations (that's the money lost when debtors default)
Singapore's pledge is not a quota contribution and hence, has senior status in the pecking order for repayment
That's why it's considered low risk
The real risk for Singapore's pledge is that the IMF goes bankrupt
That's another low risk event because the Fund doesn't over-extend itself (the IMF is accused of not helping enough as opposed to casually cancelling loans everywhere)
It's also sitting on 40+billion in gold bullion that is technically off balance sheet
BTW the money coughed up by the USA, Europe & Japan in the past was not needed to avert IMF bankruptcy
The Fund passed the donation can around so as to raise funding to take action when things get bad in the world
YES, that's how the Fund works ie. ask for money 1st, then make the risky loans
that's how it avoids bankruptcy

 

[steffychun]

The IMF loses money on loan defaults, Yes
So the question is how does the IMF raise the funds to make these loans in the 1st place
The answer is from the quota contributions from member nations (that's the money lost when debtors default)
Singapore's pledge is not a quota contribution and hence, has senior status in the pecking order for repayment
That's why it's considered low risk
The real risk for Singapore's pledge is that the IMF goes bankrupt
That's another low risk event because the Fund doesn't over-extend itself (the IMF is accused of not helping enough as opposed to casually cancelling loans everywhere)
It's also sitting on 40+billion in gold bullion that is technically off balance sheet
BTW the money coughed up by the USA, Europe & Japan in the past was not needed to avert IMF bankruptcy
The Fund passed the donation can around so as to raise funding to take action when things get bad in the world
YES, that's how the Fund works ie. ask for money 1st, then make the risky loans
that's how it avoids bankruptcy

IMF going bankrupt?

 

[londontrader]

Yes, China has made 43 times more money than Singapore but wait, what's the size of China's population as compared to Singapore?

Goh Meng Seng

I was just educating some people here who claim that China is too smart to make risky IMF pledges

 

[londontrader]

When was the last time?

Read (if you can!)

http://www.independent.co.uk/news/uk/politics/osborne-criticised-over-imf-bailout-bull-7668034.html

Focus on :

Parliament has previously approved around £40 billion in support for the IMF, of which about £30 billion has already been committed.

If the increase had gone beyond the £10 billion "headroom" still available to Mr Osborne it would have required a fresh vote by MPs.

 

[londontrader]

IMF going bankrupt?

Not even close

 

[londontrader]

If you want the global economy to falter then dont loan at all. Go to DC and protest in front of the IMF.

I'm in favour of the IMF pledge
Not in favour of the way the PAP govt shoved this decision thru without oversight

 

[elephanto]

Mr Londontrader,

I salute you for:
- good knowledge of IMF & ability to present it in very simple terms

- stamina & persistence

- patience & desire to continue handling 7 pages now, of some very vexatious smartarses!

- finally, apart from some legitimate steam-letting, by and large, very civic language unlike the likes of papsmearer and chaopappypoodle who may have made very covent points, but spew vitroil as if they live in bitter-cynic-land where their bile far outweigh their brain.

 

[aurvandil]

We seem to be making progress. From some sort of mystical super loan shark who always gets back their money, we now have acknowledgement that the IMF is in the business of making high risk loans. Because these are high risk loans, a large proportion of these gets written off and is never paid back.

The IMF is able to stay in business by passing the can around. As long as member countries drop money into the can, it can stay in business indefinitely. In the past, the three largest contributors were US, Europe and Japan.

Given recent events, the IMF can no longer rely on these 3 and have to look to non traditional sources like China. Anyone who thinks China will just empty out their pockets for the IMF is living in la la land.

The IMF from conception has been largely an instrument of the US. It has been used many times in the past to pursue US foreign policy. The fact that Tharman has a place at the IMF is not because Singapore is of any consequence but because in the game of nations, Singapore is a trusted agent of the US. Given China's agenda, we can therefore expect China to do the bare minimum with regard to the IMF. So far on a per capita basis, the China pledge has been embarrassingly small.

If IMF passes the can round and the takings are insufficient, the IMF can and will go bust.

As a global investment banker, I am surprised that you think that the only risk from the loan pledge is the IMF going bankrupt. What about the risk of a debt moratorium/hair cut? Let's say the loan facility is called. After pouring billions into Europe, it emerges that the only way out is a debt moratorium. As part of restructuring, all creditors (IMF included) take a 50% hair cut. Out of the US$4 billion we lend out, we might only get back US$ 2 billion and that it might be like 10 years later that we get our money.

The IMF loses money on loan defaults, Yes
So the question is how does the IMF raise the funds to make these loans in the 1st place
The answer is from the quota contributions from member nations (that's the money lost when debtors default)
Singapore's pledge is not a quota contribution and hence, has senior status in the pecking order for repayment
That's why it's considered low risk
The real risk for Singapore's pledge is that the IMF goes bankrupt
That's another low risk event because the Fund doesn't over-extend itself (the IMF is accused of not helping enough as opposed to casually cancelling loans everywhere)
It's also sitting on 40+billion in gold bullion that is technically off balance sheet
BTW the money coughed up by the USA, Europe & Japan in the past was not needed to avert IMF bankruptcy
The Fund passed the donation can around so as to raise funding to take action when things get bad in the world
YES, that's how the Fund works ie. ask for money 1st, then make the risky loans
that's how it avoids bankruptcy

 

[aurvandil]

That's why it's considered low risk.

At the time they were being sold, Lehman mini bonds were also classified as "low risk" investments.

 

[Goh Meng Seng]

Londontrader,

We do share some similar views on IMF but I am more of a skeptic of the claim that IMF is "risk free". Although IMF has 188 countries as its members but that doesn't mean that these members are obliged to make guarantee to any loans IMF raised. And of course, we know IMF didn't have the ability to print money though it has gold reserves in its kitty.

I share the view that any loans to IMF by Singapore should go through parliamentary debate or even referendum, especially so when the per capital amount of loans we are lending to it is pretty high as compared to China or USA. We are just a little Red dot.

Goh Meng Seng

GMS,

Looks like we share very different views about IMF Pledges, loans, etc.
This illustrates how impt it is for some form of Parliamentary oversight (in Singapore) when these decisions are made
A diversity of opinions is an indication of a healthy and functioning democracy
That's the direction Singapore should be heading