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Singapore Election : Our Analysis [Updated]

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Updated on 11th July 2020 at 0257

One of the longest serving democratically elected Governments in the world goes to the polls today. The PAP, which has ruled Singapore since its Independence in 1965 is up against an Opposition alliance comprising of the Workers Party, the Progress Singapore Party and the Singapore Democratic Party.

According to Bloomberg, the election is expected to be a walk in the park for the ruling party.

I am not so sure. Bloomberg got the GE 13 Malaysian Election result horribly wrong.

4-2-3-1

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Earthquakes. Floods. Riots. China. Anwar. Hong Kong. Recession.

Well, we got better headlines than that and its called 4-2-3-1

Updated: An Iron Curtain descends across Hong Kong

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Picture: Credit LA Times

Breaking News: US Congress passes the Hong Kong Autonomy Act on 02nd July 2020 Kuala Lumpur time. This is a game changer for interbank Dollar funding markets in Asia. More analysis to follow.

 

The elements of the Hong Kong National security law is finally out. The following could be punishable by sentences up to lifetime imprisonment:

The four categories of criminal offence outlined in the law are: Secession, subversion of state power, terrorist activities and collusion with foreign and external forces to endanger national security. Lead perpetrators and serious offenders can receive a maximum life sentence, or long-term imprisonment of 10 years and above for offences in all categories. Criminal acts under the category of foreign collusion include: Inciting Hong Kong residents’ hatred of the Hong Kong or Chinese government, electoral manipulation or sabotage, and sanctions against Hong Kong or China.

The law applies to both residents and nonresidents and has extraterritorial jurisdiction: meaning that a Malaysian citizen criticizing China in Timbuktu can now be jailed for life if he stepped into Hong Kong. To make matters even worse, communist totalitarian regimes usually interpret criticism as any sentence which involves the regime as a subject in that sentence and the sentence does not fall into the following categories: genuine pandering, curry favoring, and the author does not adopt the form of a obsequious waiter.

If that wasn’t enough, the implementation of this law is governed by a National Security Commission in Hong Kong which is above Hong Kong’s basic law, can involve agents from China who are given immunity from all laws in Hong Kong and can be conducted by Chinese law officials from the moment of arrest to incarceration within the 99% Conviction positive Chinese legal system.

Thus, for the benefit of the doubt, the Rembau Times is about to join the US Senate, the US House of Representatives and all other bodies which are highly critical of China in breaking Hong Kong’s National Security Law on Day One of its enactment.

Hong Kong is now officially under the similar iron curtain that fell on Eastern Europe after World War 2.

⚠️ Warning for Malaysian economy due to LNG collapse.

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Global LNG prices have crashed to the worst levels in history. For example, in December of 2019, LNG prices arriving in Japan were contracted at prices of about  USD $6.70 per MMBtu. Based on the latest data available, that same LNG can only fetch USD $2.60 per MMBtu. This will severely impact Petronas, which counts as LNG sales as an important revenue driver.

The Adapter Quest : A photo journey

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This afternoon I prepared myself to make a journey to the one place where I was sure to find an answer to the issue of my new Dell monitor not being able to connect to my new Dell desktop. It will finally answer the question of whether my monitor was busted and needed a replacement or whether a simple $1 part was all I needed.

Dell Computers – Cables sold separately

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There are certain things I thought I will never do. I thought I will never stoop to buying an Intel Celeron processor. I did just that . I thought I will never buy an Acer . I did just that.

But never did I think that buying a Dell will lead me to contemplate larger issues that affect the minds of males, but so it did.

There is a lesson here, so read ahead.

Rembau Times proposes amendment to CRE 70.12

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The Bank of International Settlements, or BIS, is known as the Central Banker’s bank. Its origins trace back to the earlier part of the 20th century. I actually read the book about its history, including an unflattering description of how the Bank operated during World War 2.

However, this issue we have with the BIS has less to do with past history of Nazi collaboration, but rather how pronouncement / proclamation / rule CRE 70 is currently worded.

The following is the current wording of CRE 70. that apply to failed trades and unsettled transactions on securities, commodities, and foreign exchange transactions. It’s structured in the passive form and we at Rembau Times are aggressively changing the world to communicate in the active form.

70.12

If five business days after the second contractual payment/delivery date the second leg has not yet effectively taken place, the bank that has made the first payment leg will risk weight the full amount of the value transferred plus replacement cost, if any, at 1250%. This treatment will apply until the second payment/delivery leg is effectively made.

Our proposal:

70.12 A bank that has made the first payment leg will risk weight the full amount of the value transferred plus replacement cost, if any at 1250%, if the second leg has not effectively taken place five days after the second leg’s contractual payment/delivery date was due. This treatment will apply until the second payment/delivery leg is effectively made.

What do readers think?

Explanation:

The 1250% or 12.5x effectively means that the exposure is treated as a total loss. Say for example, if you are a broker and you delivered $100 of Apple shares to Mr. Magoo on 01 Jan 2020. 5 days later, Mr. Magoo has still failed to remit the $100 to settle his purchase. To make things worse, Apple shares suddenly went up to $180. What the rule means is that you will treat the $180 as a loan to Mr. Magoo and risk weight by 1250%, which means it carries a risk charge of $2,250. As a bank you need to set aside capital for your increased risk, which is say 8%. That means the additional capital required is $180. Effectively, the standard means that the bank’s capital is set aside for the entire value of the failed trade. Actually this is even worse than taking an expense of $180, because the capital impact is reduced by the tax shield, which may reduce capital by $135, assuming a 25% marginal tax rate.

Langkah Sheraton saved Malaysia

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Let’s roll out some stats related to Coronavirus cases in Malaysia as of 30th May 2020.

  • Total cases per 1M population: 240. In the US it is 5,400 and in the UK its 4,021.
  • Total active cases: 1,317. In Germany, its 9,494.
  • Total deaths:  115. In Italy its 33,340. In Switzerland its 1919.
  • Total new infections in the last 24 hous: 30. In Singapore, its 506.

In terms of Coronavirus response, Malaysia is at least an A candidate, second only to perhaps Taiwan which is the only A+ country in the world.

Under the previous Pakatan Harapan Government, we could not even manage a temple dispute without it turning into almost an all out race war. Under the current Perikatan Nasional Government, Tan Sri Muhiyiddin’s Government worked like a well trained Formula 1 Pit crew and navigated the Coronavirus crisis efficiently and effectively.

Langkah Sheraton saved Malaysia from Coronavirus!

Let everybody be clear about this: Langkah Sheraton saved Malaysia!

 

Hong Kong’s future thrown in doubt

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Violence is expected to escalate as protesters will mistakenly assume American intervention on their behalf.

A few days ago, the National People’s Congress (NPC), which is equivalent to the Dewan Rakyat in Malaysia, moved to impose a security law that will allow for officers from China’s Ministry of State Security to operate in Hong Kong as well as meet out stiff sentences for those accused of protesting against China. In effect, in one fell swoop, the legal system in Hong Kong will be changed and Hong Kong will no longer operate under a One Country, Two Systems approach but under a One China model.

Will Uncle Sam pay for JP Morgan’s Interest Income

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An interesting part of a bank’s financial statements is what is called the Loan Accounting Framework or LAF. In normal times, this is glossed over but we live in strange times indeed.

Accountants get paid for recording the figures. Analysts get paid for reordering them. We are Analysts.