Muddy Waters releases report on Temasek's Olam - shares plunge 6%!

[Merl Haggard]

City Spring is a joke. I cut loss immediately after it was reported that the company paid out the bulk of the profit as bonus to the management team.

Very clever of you to have cut your losses.

I was offered a huge parcel by UBS, but I refused the offer.

 

[watchman8]

So if the stock price falls to, say, S$0.10 or S$0.20 sometime next year, that would cost Temasek less than S$300 million to buy a majority controlling interest in Olam for such a relatively small amount of money that they can well afford to lose, in return for the much more valuable asset of FOOD.

Remember, Temasek likes to plan for the long term, including the possible scenario of a worldwide shortage of food due to whatever reasons.

So even if Olam never makes a profit again (in monetary terms), Temasek (and of course, Singaporeans) would have profited in terms of food, or at least survived the ordeal of a food shortage; by then, even losing billions of S$ or US$ would seem like money well-spent.

Come to think of it, ironically, Muddy Waters Research and their team of relatively young people, led by some guy who's only 36 (implying possible inexperience) and a white U.S. American (implying even more inexperience and lack of understanding when it comes to East Asian culture; or at least, I think it's safe to say that he can't possibly be more experienced and understanding than the average East Asian about East Asian culture), might be doing Temasek (and even Singaporeans) a favour by giving it the opportunity to buy, at a cheap price, food assets that Singapore obviously has a severe shortage of to feed a few million people on this tiny island.

I'm not pro-Temasek or pro-PAP or pro-government, but that's just my own conspiracy theory about Temasek's true intentions.



And that was quite possibly a political favour that Temasek did for the US government under the guise of a "financial investment".

Financial power, in the form of monetary wealth, is certainly a priority for Temasek and the PAP and their cronies; but MOST important of all is REAL power, meaning MILITARY power and POLITICAL power, which Temasek and the PAP are smart enough to understand that such power, in the modern world, comes mostly from the USA and its allies.

Otherwise, how else can we explain why the US central bank dares to print so much money to repay its government's debts in a currency that's losing value year after year, which is tantamount to a default?

And more importantly, why are so many countries around the world still willing to accept the US Dollar as the reserve currency (which is why they are still willing to accept payments in USDs)?

Monetary wealth is obviously not the be-all and end-all of the upper classes around the world, and I believe Temasek and the PAP should be smart enough to know that and act accordingly.

Ultimately, what the upper classes need, and have always needed, are SLAVES, regardless of whether their slaves are willing or unwilling (or even slaves who THINK they are NOT slaves), as long as they do their jobs and serve their masters satisfactorily. And in order to enslave people, the upper classes need power, both financial (to bribe) and military/political (to bully); essentially, it's really as simple as that.

But ironically, even the upper classes are also "slaves" in a certain sense, i.e. they depend on their own slaves to maintain their upper-class status; because without slaves, the upper class would lose their status and the power/possessions/pleasure that comes with it, which they are addicted to and, therefore, slaves of; just like how a drug addict is addicted to drugs and a slave of drugs.

So... what shall we do? haha

1. Olam is heavily in debt, and total assets is less than total liability. Why would a logical investor want to dump more money into Olam when the same amount of money can buy you even more food production capacity from elsewhere?

2. You don't secure food production by controlling Olam's equity, because Olam's debtors have first rights to seize these assets. If Singapore is really worried about food security, the better way is to source from multiple countries from multiple companies. What is so special about Olam?

3. Muddy water most certainly has more powerful people helping them. You think such a young team can do so much on their own? Minimum a few of largest hedge funds are secretly funding and helping muddy water. The muddy water team is just a front.

4. Why does GIC buy UBS in early 2008? To curry favour Switzerland? Why many other countries sovereign wealth fund (like Qatar and Norway) got a much better result from their 2008 distressed investment in US banks? Why does Temasick and GIC decide to strategically overweight global financials in 2006 -08, right before the crisis? Two words, Hubris and Stupidity.

 

[Zatoichi]

Olam is heavily in debt, and total assets is less than total liability.

I agree that total cash assets is much less than total CURRENT liabilities, according to their own latest quarterly report:
http://olamonline.com/wp-content/uploads/2012/11/14Nov2012-Q1FY2013_PPT.pdf
which is why I'm wondering how they are going to cover that current liability within their current financial year.

Why would a logical investor want to dump more money into Olam when the same amount of money can buy you even more food production capacity from elsewhere?

An ordinary investor wouldn't, but all I can say for now is that Temasek is obviously not an ordinary investor! haha

Olam's debtors have first rights to seize these assets.

Yes, that's correct.
So we'll have to see whether Temasek will let that happen.

If Singapore is really worried about food security, the better way is to source from multiple countries from multiple companies.

Yes, the Singapore government has been consistently doing so for the past few decades, I believe.

What is so special about Olam?

It's special in its own special way, I guess; but there must be something about it that motivates Temasek to invest in it substantially, not just the simple profit motive in monetary terms.

Muddy water most certainly has more powerful people helping them. You think such a young team can do so much on their own? Minimum a few of largest hedge funds are secretly funding and helping muddy water. The muddy water team is just a front.

And yet Muddy Water's track record, which has lasted for only the past 2 or 3 years, is not exactly perfect, is it?
They did make some mistakes with at least 1 or 2 China companies whose stock prices went up instead of down, didn't they?

Why does GIC buy UBS in early 2008? To curry favour Switzerland?

Possibly and probably.

Why many other countries sovereign wealth fund (like Qatar and Norway) got a much better result from their 2008 distressed investment in US banks?

So did GIC with Citi, right?
That investment was definitely profitable, if I recall correctly.

Why does Temasick and GIC decide to strategically overweight global financials in 2006 -08, right before the crisis? Two words, Hubris and Stupidity.

My guess is that Temasek/GIC had a budget of a certain amount, which they wanted to invest in some of the biggest banks in the world to the point of becoming a SUBSTANTIAL shareholder IMMEDIATELY.

Those big banks probably even made the first move by approaching Temasek/GIC and other sovereign wealth funds for financial help as a FAVOUR to these banks, which were probably among the ones who helped Temasek/GIC and those other sovereign wealth funds get so rich in the first place.

So if Temasek/GIC had refused to help at that time, those too-big-to-fail banks would have got help from other sources and Temasek/GIC would have offended these banks unnecessarily.

And if Temasek/GIC had waited until the stock prices of those banks became MUCH cheaper and then bought in:
1. Selling pressure and volume would have become much lighter, so Temasek/GIC would not have bought enough shares at those low levels to become substantial shareholders, or they would have had to patiently buy a bit everyday or every week, which would have been too tedious;
2. If Temasek/GIC still wanted to become substantial shareholders at those low levels, and even use up their huge budgets at that time, they would have ended up owning at least 20-30% of a big bank like UBS, which is too high for political comfort.

Anyway, if I've estimated correctly, GIC's unrealized net loss for its UBS investment should be about 50% at the moment, so it should break even in some years' time... haha

In the meantime, a running net loss of a few billion USD or CHF shouldn't be a big deal to Temasek/GIC's portfolio of a few HUNDRED billion USD:
http://www.swfinstitute.org/fund-rankings/
http://en.wikipedia.org/wiki/List_of_countries_by_sovereign_wealth_funds

Especially since this worldwide advertisement for Singapore has helped Singapore to become the number one country in the world in terms of:
Net international investment position per capita
http://en.wikipedia.org/wiki/List_of_countries_by_net_international_investment_position_per_capita
beating even Switzerland and Hong Kong by significant margins.

And ultimately, that's what matters to the PAP, right?
To maintain Singapore's status as one of the top financial centres in the world because it's a reflection of the power of the PAP.

 

[mojito]

Displaying excessive stupidity and ignorance can be cause for an infraction.

 

[Dreamer1]

Madam Ho should take the money and run asap,hope that she frequents Sammy to get the latest tips,PAP IBs kindly inform your boss.Thank you,God bless

 

[watchman8]

All olam management can rebut to the thick stack of muddy water report is to say that it was without any merit. No detailed, point by point rebuttal, just a general sweeping statement. Typical ah NEH style.

The debts and bond holders must be shitting in their pants now.

 

[mojito]

The debts and bond holders must be shitting in their pants now.

If it is as bad as what the report suggests, they are probably trying to offload to some greater fool. Anyone vested in equity? Relax lah... zapping me will not return you your hard earned money. Just look for opportunity to do what you must.

 

[Merl Haggard]

Olam hit a low of 1.465 and closed at 1.50, down 6c or 3.85%.

Total voloume:101,805,000.

 

[Merl Haggard]

Carson Block's interview with Bloomberg TV:

[video]http://www.bloomberg.com/video/olam-accounting-is-incompetent-carson-says-U1V8p0DiRXumODRCbH03bQ.html[/video]

 

[Clone]

Murky waters yesterday went 'all-in' liao izzit?

 

[mojito]

Murky waters yesterday went 'all-in' liao izzit?

Bird in hand, two in bush.

 

[Zatoichi]

All olam management can rebut to the thick stack of muddy water report is to say that it was without any merit.

Yes, "without merit" can be found in the following two CNA articles posted today:

Olam refutes claims of Enron-style collapse
http://www.channelnewsasia.com/stories/afp_singapore_business/view/1239829/1/.html

Olam shares fall despite rebuttal of Muddy Waters' report
http://www.channelnewsasia.com/stories/afp_singapore_business/view/1239921/1/.html

No detailed, point by point rebuttal, just a general sweeping statement. Typical ah NEH style.

But that's not true, because of the following 45-page rebuttal, which CNA did not provide the link to:

Olam Dismisses Muddy Waters Findings
http://olamonline.com/olam-dismisses-muddy-waters-findings
http://olamonline.com/wp-content/files_mf/1354069923OlamRespondstoMWReportFindings_28Nov2012.pdf

The debts and bond holders must be shitting in their pants now.

But at least Temasek is not:

http://www.channelnewsasia.com/stories/afp_singapore_business/view/1239921/1/.html
("Olam CEO Sunny Verghese said Temasek has stood by Olam "by staying invested as it battles short-seller Muddy Waters"")

which is what REALLY matters to Olam and Sunny and even the Kewalram Chanrai Group (the founder and top major shareholder of Olam), right?

 

[Xisiqomelir]

This is the time that ISD, MSD, SIB put in their surveillance resources and fixing abilities on Muddy Waters.

How do they "fix" Carson Block when he lives in Los Angeles?

 

[Bigfuck]

How do they "fix" Carson Block when he lives in Los Angeles?

Do you think state resources are not used to hire PIs to trail people to protect important Leegime assets when overseas? Do you think possible talents from Singapore are not tracked for their affilitations? Do you know how much resources that could have saved old folks in Singapore are burnt for a cuckoo bananas old man who is not chinese not malay not anything?

 

[ray_of_hope]

Olam hit a low of 1.465 and closed at 1.50, down 6c or 3.85%.

Total voloume:101,805,000.

Any idea how to borrow Olam shares from CDP for purposes of shorting? I have a trading account with UOBKayHian.

 

[Dinkum]

Any idea how to borrow Olam shares from CDP for purposes of shorting? I have a trading account with UOBKayHian.

To my knowledge, all houses have no more shares to lend.

 

[ray_of_hope]

To my knowledge, all houses have no more shares to lend.

Oh. That's useful info.

 

[Dinkum]

But at least Temasek is not:

http://www.channelnewsasia.com/stories/afp_singapore_business/view/1239921/1/.html
("Olam CEO Sunny Verghese said Temasek has stood by Olam "by staying invested as it battles short-seller Muddy Waters"")

which is what REALLY matters to Olam and Sunny and even the Kewalram Chanrai Group (the founder and top major shareholder of Olam), right?

http://sgforums.com/forums/10/topics/336674


When ABC was exposed, Temasek increased their stake further.

Every business man in Sydney, Brisbane & Melbourne knew that Eddy Groves was a crook except for Temasek.

 

[Xisiqomelir]

Do you think state resources are not used to hire PIs to trail people to protect important Leegime assets when overseas? Do you think possible talents from Singapore are not tracked for their affilitations? Do you know how much resources that could have saved old folks in Singapore are burnt for a cuckoo bananas old man who is not chinese not malay not anything?

Your questions do not answer my question, Bigfuck. Carson Block is an American citizen, resident in the state of California. Barring gross violation of US sovereignity, he is not "fixable" by any Singaporean entity, private or public.

Also germane to this topic, why is Olam pressing charges in the Singapore High Court, which has no jurisdiction in America? If they seek legal recourse, they should file suit in the appropriate venue.

 

[batman1]

The source is eternal, every minute there is somebody out there working, at any hour of the day...this is free flow...free flowing...

Ho Ching can play monopoly like nobody's business with free flow of funds anytime and anywhere,no questions asked.If she needs money,she will order Pinky and Pinky got to think of new ways to get more funds e.g increase HDB property taxes,increase ERP charges,all goods brought into Singapore via Changi Airport will be subject to GST.
OMG,if count all the losses by her till todate,she may have lost billions in overseas speculations !!!