Just for illustration - during the Great Depression .......market dropped almost 90%. If you have invested $100 at the peak of the market ..... your investment would now be worth around $900k ...................loss of 90% during the Great Depression. On the other hand, if you had held back your investment and waited for the market to fall to its lowest, your investment would now be worth $9 million, enough to buy a fair size, non-Good Class bungalow. The most important thing is that both investments would have given you a 11 to 12% annual rate of return with almost non-perceptible difference. One was a good investment, the other was shit.
=> I take it that you mean one bought 1 share lot and the other bought 100 share lots where the law of averages makes the % not telling you much if that is all u know.
Economics Nobel Prize Winner, Paul Krugman, once challenged the Singapore Govt on the need to have such a large reserve which he advised should be ploughed back into the economy to generate growth, very much like cash rich listed companies giving back to their shareholders cash either as dividends or even as capital. That is exactly the point that you raised.
=> Singapore Government is effectively "REIT"zing the whole of Singapore with the land evaluation being assuring that the asset value floor will be maintained. With the notional value, we get our international ranking in terms of wealth and it allows the government to borrow happily. That is why Singaporeans have becoming asset rich and cash poor. My disgust is the way they fooled around with the CPF to make the REITs work. I do not mind being so called allowed to live in a house till I die, but the CPF which is now a de facto pension and asset locking traphole should be paying better pension payouts from 67 years onward. That is contingent that the government can ensure work for Singaporeans from 40-67. Our government and their 2nd rated scholars are only good at lazy solutions which do not address more serious issues. If you want to REITs Singapore, you better make sure the island is friendly to the elderly and young as well as less flood prone.
Regarding government policy, we have missed a good chance in the recent ministerial salary review to benchmark the salaries to a median income that would have set the KPI for the whole Cabinet as well as for Parliament to come out with policies that will address the income inequality.
=> This needs to be done and I said it a few times here. Together with this benchmarking, the bonus needs to be withheld for a few years with interest to let the policy to mature to exhibit the degree of effectiveness. Then the bonus accumulated is evaluated to see if it should disbursed fully or partially returned to the coffers. If you give bonus without much evaluation, you might as well make it the de facto salary. It would less insulting to me to see a minister work for a high salary than a minister getting 3 years of money for 1 year of salaried work.
Destructive investment banks that earn the most in the quickest time are actually bona fide swindlers. They borrow 1 million from you and promise you 25% returns which is actually your money paid back to you, find a crooked bank to pyramid it in terms other financial instruments, our fucker friend is actually sucking your 1 million into his own pocket directly while your poor 1 million becomes a super rubberized and leveraged dollar. Mind you 100K deposit can generate 1 million in deposits for the bank in theory and if some bank decides to do it. When the leverage goes out of hand, the bank has to become a swindler themselves and then it escalates to the governments who have their balls squeezed to issue government bonds or inflate the currency as a possible option. As we are playing with the exponential but humans live by the arithmetic series, the younger living and unborn generations get fucked big time like God hated them. Since governments, the politicians in particular who are elected by terms, they behave like destructive investment bankers by perpetuating the lie. The pension crisis in EU an USA is that by product which Paul Samuelson already said in the late 60s that the pension system in its current form is a Pyramid scheme. CPF was created by our brilliant UK former masters to not fall into this pension hell hole. But we are going back to the pension system again. The short-sight PAP by tying property with the CPF has now hit the quagmire of the stop gap as the cheaper new "subsidized property" is becoming so expensive that it has bankrupted new couples from retirement, given the current method of pension payouts of the CPF. Either the PAP decides to change CPF system or lower the price of properties which fucked when you REITS Singapore, you end up with shit waiting to happen when things choke up.
Tying the MP salaries with the median income is the right thing to do as it is a powerful shame factor and also improves Singapore's financial and government policy performance ranking in the world. Let's face it, the unwritten kick backs from privileged property purchases and share options will continue. These are the simpler ones and more elaborate ones are around which can be made more elaborate.
