Silence is more than golden ......

It seems that the evidence for the benefits of silence continues to mount these days. Studies have demonstrated that silent meditation improves its practitioner's ability to concentrate.  Teachers who introduce silence into classrooms report that it fosters learning and reflection among the students.

Working adults and professionals involved with conflict resolution have found that by incorporating times of silence into negotiations they were able to foster empathy that inspires a peaceable end to disputes.  [ Maybe this is not workable in tense environment, such as manufacturing industry or shipyards where they are rush for time and schedule and the pressing need to deliver on time the construction project and this led to intense argument and many excuses for delay or work stoppages,etc]

The old idea of quiet zones around hospitals has found new validation in studies linking silence and healing.

If you have the means, you buy your luxury silence in the form of spa time, or products like quiet vacuums, which are always more expensive than their roaring bargain cousins. The affluent pay for boutique silence because, like silk on the flesh and wine on the palate, silence can kindle a sensory delight.

Unfortunately, in a world of diminishing natural retreats and amplifying electronic escapes, this delight is in ever shorter supply. The days when Thoreau could write of silence as 'a universal refuge' and 'inviolable asylum' are gone.

With all our gadgetry punching up the volume at home, in entertainment zones and even places of worship, young people today often lack any haven for quiet. These problems are everywhere, but can be especially acute in disadvantaged neighbourhoods.

Too many people think of silence only in terms of 'being silenced', of suppressing truth. In consequence, silence itself is now often suppressed.

People who appreciate the value of silence have, by and large, done a poor job of sharing their understanding, let alone making silence more accessible. Yet silence can be nourished in our larger spaces not just by way of an inward journey that most people lack the tools to embark upon, but via education and architecture.

Some of the imaginative work is being done today by urban planners involved with soundscaping. It is easier to create oases of quiet - by, for example, creating common areas in the rear facades of buildings with plantings that absorb sound - than it is to lower the volume of a larger area by even a few decibels.

And having access to these green oases can greatly enhance quality of life. A recent Swedish study found that even people who live in loud neighbourhoods report a 50 per cent drop in their general noise annoyance levels if residential buildings have a quiet side. These modest sanctuaries can provide at least a taste of silence, which is then recognised not to be silence at all, but the sounds of the larger world we inhabit: birdsong and footsteps, water, voices and wind.

Even a little bit of silence can create a sense of connection with our environment that diminishes alienation, and prompts a desire to discover more quiet.

The MBA Oath

With my MBA degree,  I solemnly recognise my role in the Singapore society, not many years left though....

•My purpose is to lead people and manage staff and resources to create better value that no single one can create alone.

•My decisions could affect the well-being of individuals and staff inside and outside my organization, today as well as the future.

I shall, therefore, carry out my duty within my ability  :

•I will manage my organization with sincerity and honesty, and will not advance my personal interests at the expense of my organization or the public society.

•I will understand and uphold, in good spirit, the laws and contracts governing my conduct and that of my organization.

•I will refrain from corruption, unfair competition, bias judgement, partiality or business practices harmful to society.

•I will protect the staff rights and dignity of all people affected by my organization, and I will reject any discrimination and exploitation.

•I will protect the right of future generations to advance their standard of living and enjoy a healthy world.

•I will report the performance and risks of my organization accurately.

•I will invest in developing myself and others, helping the management profession continue to advance and create sustainable and inclusive prosperity.

In exercising my professional duties according to these principles, I recognise that my behaviour have to set an example of integrity, eliciting trust and esteem from those I serve or to serve. I will remain accountable to my peers and to the organization as well as society for my actions and for upholding those standards.

This oath, I make freely and upon my esteem honour and dignity.

Why the single EURO currency fail to work?

THE crisis in Greece and the debt problems in Spain and Portugal have exposed the euro's inherent flaws. More than ten years of smooth sailing since the euro's creation, the arrangement's fundamental problems have become to surface with obvious reasons.

The single currency for 16 separate and quite different countries seem to have failed and the shift of single currency meant that individual member countries lost the ability to control monetary policy and interest rates in order to respond to national economic conditions. It also meant that each country's exchange rate could no longer respond to the effects of differences in productivity and global demand trends that have accumulated. The single currency weakens the market signals that would otherwise warn a country that its fiscal deficits were becoming excessive. A country with excessive fiscal deficits needs to raise taxes and cut government spending, as Greece does now, the resulting contraction of GDP and employment cannot be reduced by a devaluation that increases exports and reduces imports.

Why the United States is able to operate with a single currency, despite major differences among its 50 states? There are three key economic conditions - none of which exists in Europe - that allow the diverse US to operate with a single currency: labour mobility, wage flexibility and a central fiscal authority. When the textile industries in America's north-eastern states died, workers moved to the west, where new industries were growing. Unlike the unemployed workers of Greece, Portugal and Spain they do not move to faster-growing regions of Europe because of differences in language, history, religion, union membership, etc. Moreover, wage flexibility meant that substantially slower wage growth in the states that lost industries helped to attract and retain other industries.

US fiscal system collects roughly two-thirds of all taxes at the national level, which implies an automatic and substantial net fiscal transfer to states with temporarily falling incomes.

The European Central Bank (ECB) must set monetary policy for the euro zone as a whole, even if that policy is highly inappropriate for some member countries. When demand in Germany and France was quite weak early in the last decade, the ECB reduced interest rates sharply. That helped Germany and France, but it also inflated real estate bubbles in Spain and Ireland. The recent collapse of those bubbles caused sharp downturns in economic activity and substantial increases in unemployment in both countries.

The introduction of the euro, with its implication of a low common rate of inflation, caused sharp declines in interest rates in Greece and several other countries that had previously had high rates. Those countries succumbed to the resulting temptation to increase government borrowing, driving the ratio of government debt to GDP to more than 100 per cent in Greece and Italy.

Until recently, the bond markets treated all euro sovereign debts as virtually equal, not raising interest rates on high-debt countries until the possibility of default became clear. The need for massive fiscal adjustment without any offsetting currency devaluation will now drive Greece and perhaps others to default on their government debt, probably through some kind of International Monetary Fund-supported debt restructuring.

The euro was promoted as necessary for free trade among the member countries under the slogan 'One Market, One Money'. In reality, of course, a single currency or fixed exchange rate is not needed for trade to flourish. The US has annual trade turnover of more than US$2 trillion (S$2.8 trillion), despite a flexible exchange rate that has seen sharp ups and downs in recent decades. The North American Free Trade area increased trade among Canada, Mexico and the US, all of which have separately floating exchange rates. Japan, South Korea and other major Asian trading countries have flexible exchange rates. And obviously, only 16 out of EU's 27 member states use the euro.

Despite its problems, the euro may survive the current crisis but not all of the euro zone's current members may be there a year from now. In retrospect, it is clear that some of the countries were allowed to join prematurely, when they still had massive budget deficits and high debt-to-GDP ratios. Moreover, some countries' industrial composition and low rates of productivity growth mean that a fixed exchange rate would doom them to large trade deficits.

Some mechanism of enhanced surveillance and control may be adopted to limit future fiscal deficits. But even with a smaller group of member countries and some changes in budget procedures, the fundamental problems of forcing disparate countries to live with a single monetary policy and a single exchange rate will remain.


The euro rulebook doesn't work !

Business Times, Sept2010

WHAT does a country need to do to make a success of the euro? The European Commission and the European Central Bank would say the recipe is simple: Cut your budget deficit, slash wages, keep taxes competitive, boost your exports, and live with austerity.
There is just one problem: Ireland has been following precisely that formula and it hasn't done much good. The government is being squeezed at a time when the cost of bank bailouts is soaring. Blame it on the banks.
If there is one country that proves what a mess the single currency has become, it isn't Greece, or even Spain or Portugal. It's Ireland. When countries break the rules and then get into trouble, it isn't that surprising. But if they stick to the rulebook and still run into as many problems, it suggests there is something badly wrong with the system itself.

There was a stark reminder that Ireland is still a long way from market redemption, almost two years after the credit crunch burst the real-estate and asset bubble that had been building up in the country for most of the past decade.

Ireland now has its lowest rating since 1995. Irish bonds plunged on the news. The spread over German bunds widened to a record.
It isn't hard to understand why the decision was made. Ireland ran a budget deficit of 14.3 per cent of gross domestic product last year, the largest of any euro-area country. The gap will narrow to about 11 per cent this year, according to European Commission forecasts. That is a slight improvement, but hardly enough to reassure the bond market.

There is a mountain of debt building up and the economy remains in a terrible state. Over the past two years, it has shrunk about 10 per cent, one of the worst recessions in the developed world. There isn't much sign of a bounce back, either. The Irish central bank predicts the economy will expand 0.8 per cent this year, a figure it revised up from the 0.5 per cent contraction it forecast in April.

And yet, Ireland has been exemplary in its austerity drive. Public-sector salaries have fallen by an average of 13 per cent. Taxes have been raised where necessary, but not in a way that will hurt business. The Irish have been willing to tighten their belts and adjust to hard times. There was no sign of the street riots, strikes and political protests that took place in Greece.

Ireland is doing exactly what it has been told it should be doing. It is following the path laid down for Greece, Portugal and Spain, and doing so with admirable self-restraint and discipline. There ought to be some reward for all that effort. But there is very little sign of it.

Ireland had one of the most successful economies in the world when it joined the euro in 1999. All it has got out of monetary union is massive financial and real-estate bubbles, the collapse of which will scar the country for a generation.

If austerity doesn't work for Ireland, it is hardly going to help Greece, Portugal or Spain. The whole experiment with monetary union is doomed if the euro's leaders don't jettison their simple recipe.

"Developing Economies" overtaking Developed Nations with Innovations.....

"

In the 80s’ US car producers were shock to find that Japan had replaced the United States as the world’s leading carmaker. How the Japanese beat the Americans on both price and reliability and how did they manage to produce new models so quickly. The answer was not industrial policy or state subsidies but business innovation. The Japanese had invented a new system of making things that was quickly dubbed “lean manufacturing”.

Developing countries are becoming hotbeds of business innovation in much the same way as Japan did from the 1950s onwards. They are coming up with new products and services that are dramatically cheaper than their Western equivalents: $3,000 cars, $300 computers and $30 mobile phones that provide nationwide service for just 2 cents a minute. They are reinventing systems of production and distribution, and they are experimenting with entirely new business models.

Why are countries that were until recently associated with cheap hands now becoming leaders in innovation? The most obvious reason is that the local companies are dreaming bigger dreams. Vietnam or Cambodia—they are relentlessly climbing up the value chain. Emerging-market champions have not only proved highly competitive in their own backyards, they are also going global themselves. There are now around 21,500 multinationals based in the emerging world. The best of these, such as India’s Bharat Forge in forging, China’s BYD in batteries and Brazil’s Embraer in jet aircraft, are as good as anybody in the world. The number of companies from Brazil, India, China or Russia on the Financial Times 500 list more than quadrupled in 2006-08, from 15 to 62. Brazilian top 20 multinationals more than doubled their foreign assets in a single year, 2006.

At the same time Western multinationals are investing ever bigger hopes in emerging markets. They regard them as sources of economic growth and high-quality brainpower, both of which they desperately need.

China produces 75,000 people with higher degrees in engineering or computer science and India 60,000 every year.

The world’s biggest multinationals are becoming increasingly happy to do their research and development in emerging markets. Companies in the Fortune 500 list have 98 R&D facilities in China and 63 in India. Some have more than one. General Electric’s health-care arm has spent more than $50m in the past few years to build a vast R&D centre in India’s Bangalore, its biggest anywhere in the world. Cisco is splashing out more than $1 billion on a second global headquarters—Cisco East—in Bangalore, now nearing completion. Microsoft’s R&D centre in Beijing is its largest outside its American headquarters in Redmond.

Knowledge-intensive companies such as IT specialists and consultancies have hugely stepped up the number of people they employ in developing countries. For example, a quarter of Accenture’s workforce is in India.

Both Western and emerging-country companies have also realised that they need to try harder if they are to prosper in these booming markets. It is not enough to concentrate on the Gucci and Mercedes crowd; they have to learn how to appeal to the billions of people who live outside Shanghai and Bangalore, from the rising middle classes in second-tier cities to the farmers in isolated villages. That means rethinking everything from products to distribution systems. These islands of success are surrounded by a sea of problems, which have defeated some doughty companies. Yahoo! and eBay retreated from China, and Google too has recently backed out from there and moved to Hong Kong. Black & Decker, America’s biggest toolmaker, is almost invisible in India and China, the world’s two biggest construction sites.

But the opportunities are equally extraordinary. The potential market is huge: populations are already much bigger than in the developed world and growing much faster ( chart1), and in both China and India hundreds of millions of people will enter the middle class in the coming decades. The economies are set to grow faster too ( chart 2). Few companies suffer from the costly “legacy systems” that are common in the West. Brainpower is relatively cheap and abundant: in China over 5m people graduate every year and in India about 3m, respectively four times and three times the numbers a decade ago.

This combination of challenges and opportunities is producing a fizzing cocktail of creativity. Because so many consumers are poor, companies have to go for volume. But because piracy is so commonplace, they also have to keep upgrading their products. Again the similarities with Japan in the 1980s are striking. Toyota and Honda took to “just-in-time” inventories and quality management because land and raw materials were expensive. In the same way emerging-market companies are turning problems into advantages.

Until now it had been widely assumed that globalisation was driven by the West and imposed on the rest. Muscular emerging-market champions such as India’s ArcelorMittal in steel and Mexico’s Cemex in cement are gobbling up Western companies. Brainy ones such as Infosys and Wipro are taking over office work. And consumers in developing countries are getting richer faster than their equivalents in the West.

Old assumptions about innovation are also being challenged. People in the West like to believe that their companies cook up new ideas in their laboratories at home and then export them to the developing world, which makes it easier to accept job losses in manufacturing. But this is proving less true by the day. Non-Western companies are becoming powerhouses of innovation in everything from telecoms to computers. [ Our company, a world-class rig builder,   has produced quite alot of innovative ideas in the IQC intiative producing feasible "short-cuts" and leading to more productivity and output and thus saving quite a substantial sums each year in building major offshore oil rigs, and it is such motion of getting all the thinking hats together coming out with workable ideas, some could have been overlooked to be day-to-day chore but when look deeper, you could save few hundred thousands especially in rig building business involving the need to take the "economy-of-scale" advantage ]

Re-invent innovative ideas

The very nature of innovation is having to be rethought. Most people in the West equate it with technological breakthroughs, embodied in revolutionary new products that are taken up by the elites and eventually trickle down to the masses. But many of the most important innovations consist of incremental improvements to products and processes aimed at the middle or the bottom of the income pyramid: eg.Wal-Mart’s exemplary supply system or Dell’s application of just-in-time production to personal computers.

The emerging world will undoubtedly make a growing contribution to breakthrough innovations. It has already leapfrogged ahead of the West in areas such as mobile money (using mobile phones to make payments) and online games. Microsoft’s research laboratory in Beijing has produced clever programs that allow computers to recognise handwriting or turn photographs into cartoons. Huawei, a Chinese telecoms giant, has become the world’s fourth-largest patent applicant. But the most exciting innovations—and the ones this report will concentrate on—are of the Wal-Mart and Dell variety: smarter ways of designing products and organising processes to reach the billions of consumers who are just entering the global market.

China and India say their country’s current economic situation is good (chart 3), expect conditions to improve further and think their children will be better off than they are. This is a region that sees opportunities in every difficulty rather than difficulties in every opportunity.

Now the emerging markets are developing their own distinctive management ideas, and Western companies will increasingly find themselves learning from their rivals. People who used to think of the emerging world as a source of cheap labour must now recognise that it can be a source of disruptive innovation also.

Stocks are at 10-month lows with recent Europe debt and N-S Korea saga....

Asian stocks are at 10-month lows amid fears that tensions will keep escalating on the Korean peninsula and possibly of bringing the stocks sliding to 2008 crisis?

A Korean war is not the only downside risk to markets and before that, fears were festering that Europe's debt crisis could spread, and that China's real estate bubble could pop horribly and cause problems around the globe. Another scare came when the Dow Jones Industrial Average plunged almost 1,000 points in less than 30 minutes earlier this month, for reasons yet to be fully explained although it was quickly to blame on computer glitch or human error in keying the trade figure with additional zero 000s’.

The ups, as well as the downs, are also getting sharper - with the Dow often rising or falling 200 points or more in a single day.

For long-term investors, it should not be reacting to the short-term volatility and be derailed from their long-term plans. In times like these - while there can be an appropriate shift of risky assets to less risky assets - totally exiting from risky assets may not be the most advisable strategy.

If one is uncomfortable putting in a lump sum of money, regular investing is a disciplined approach and more palatable if you are uncertain about the market.

Question is whether this level of volatility is keeping you up at night if your main concern is limiting your losses and saving what cash you have, then you may want to put a lower percentage of your money into stocks and stock funds.

You can put all your money in bank deposits just because they are very secure, but that is not wise as your purchasing power will be reduced by inflation - which exceeds bank deposit rates by a fair margin ! !

Some says that a sensible combination of products with varying risk levels can provide good returns.

Bonds

Assume you buy a bond that has a face value of $10,000, a coupon - the annual interest payment - of 6 per cent, and a maturity term of five years.

You would earn a total of $600 (6 per cent of $10,000) in interest a year for the next five years. When the bond reaches maturity after five years, you would get your $10,000 back.

Consider buying Asian bonds. Asian bonds are a very attractive asset class to invest in.It is worth mentioning that while bonds are generally safe bets, they are not risk-free either.

The bond issuer could default on its debt payments.

Investing directly in bonds does not come cheap. The average bond is usually sold in blocks of $50,000 to $1 million at a time and if chosen properly can be cost efficient.

Money market funds

Money market funds invest in high-quality short-term instruments and debt securities. The latter are loans sold by firms and governments to borrow money.

These funds are a good alternative for investors who are looking for a stable, low-risk instrument with potentially higher returns - ranging between 1 per cent and 2 per cent - than banks' savings deposits.

Not all money market funds are the same. Do your homework and read the fund's prospectus and annual reports. Check to see what kinds of debt instruments the fund invests in.

Multi-asset funds

The rationale for investing in such funds is straightforward.No single asset class can be guaranteed to top the performance charts each year, so it makes sense to have exposure to a broad mix of investments, such as stocks, bonds and property. Multi-asset funds are riskier than fixed deposits, but they are usually less risky than a stock-only portfolio.

It has the ability and flexibility to invest in not just traditional asset classes like equities, bonds and cash, but also alternative asset classes like commodities and property. The fund also tactically moves into asset classes that are most appropriate for the prevailing market cycle.

Gold

Many people invest in gold as a hedge against stock market declines, burgeoning national debt, currency failure, war and social unrest. In fact, there are a number of studies which show that gold prices generally move in the opposite direction from stock prices: Gold soars when stocks tank.

Gold protects wealth as a safe haven in troubled and uncertain times. This appeal remains compelling for modern investors. United Overseas Bank sells physical gold that can be bought from, and sold back to, the bank at its daily buy-sell market rate.

Gold savings accounts

UOB and Citibank customers can open a gold saving account, allowing them to invest directly in the metal without actually owning the physical item.UOB customers can buy and sell gold at prevailing market rates. The minimum transaction and maintenance requirement for its gold savings account is 5g of 999.9 fine gold.
Based on indicative pricing rates on its website, this would cost $278.55. Transactions are done in units of 1g, at a minimum of 5g per transaction. Holdings in the account are not subject to GST and can be exchanged for cash.
An administrative fee is charged: either 0.12g of gold per month or 0.25 per cent of the highest balance per month, whichever is higher. Fees are subject to GST, which will also be deducted from a user's account in grams of gold.
At Citibank, users have to set up an account with a minimum requirement of 30 ounces of gold bought at market rates.Taking the example of a US$1,258 an ounce price, this would amount to US$37,740.
Trades are done in blocks of 30 ounces. No administration fees are charged.

Gold certificates
Gold certificates, offered only by UOB, are more popular among buyers and allow for ownership of physical gold without any physical movement of the metal. This means it is free of GST.
Issued in multiples of 1 kilobar, or kilocert, one certificate can account for at most 30 kilobars of 999.9 fine gold. An annual administrative charge of $30 per kilobar and a certificate fee of $5 per certificate are levied.
Certificates can be traded at UOB according to daily prices.

Last Friday, 18June'10, a single unit gold certificate sold at $55,843. The bank would buy it back at $55,743 - a 0.17 per cent difference. Customers can also exchange their certificates for gold kilobars with two days' notice. The bars would be subject to GST.

Fixed deposits

If the top priority is to have cash at hand, then fixed deposits are the usual place to park your money.They let you save a fixed amount of money for a fixed period at a fixed interest rate.DBS is offering 0.7 per cent a year for a 24-month term deposit.

Investing tip 1

It is better to remain focused and stay invested during volatile times.During volatile times, it is important to remember to stay focused and stick to your long-term investment strategy. An investor who panics and sells his investments when markets are down is likely to incur losses. In addition, he may also miss out on potential gains when markets recover. Historically, markets have rebounded and eventually returned to or even surpassed previous levels. By investing over the long term, you can ride out the volatility.

Investing tip 2

The three Rs: Revisit goals, review portfolio and rebalance your investments.Over time, our financial goals and needs may change. For example, you may want to set aside funds to cater to growing expenses when new members are added to the family. Your financial objectives will have to be reviewed to meet this need.

The components in your investment portfolio may also need to be readjusted to generate higher potential returns. You may do this by taking on more risks.Even if your financial objectives or risk profile remain the same, market movements may tilt the weightage of each investment in the portfolio, exposing the overall portfolio to more risks than intended.

A rebalancing of the portfolio is required to bring it back to its original risk-return parameters. Generally, you should review and rebalance your investment portfolio every eight to 12 months.

Investing tip 3

Spread out your risks, diversify.Diversification is important as most investors are not able to predict the performance or returns of one particular asset class. Equities, bonds, different geographic regions, sectors or even various investment styles react differently to market events and cycles. Hence, investing in multiple asset classes and types will help to buffer the impact of any non-performing investment in a portfolio. Diversifying your portfolio can also help you weather the ups and downs of the market cycle.

Investing tip 4

Invest in a balanced portfolio to better manage risks and returns. A balanced portfolio is designed to achieve higher returns than debt securities or cash, but at a lower risk than a pure equities portfolio.

A fund offering a balanced approach should include both equity and fixed-income components, which can help to provide cushioning when either one of the asset classes is down. Equities and bonds usually show low correlation to each other and behave in an opposite manner under the same market conditions. Hence, when equity prices are down, bond prices usually rise, and vice versa.

Investing tip 5

Market corrections can mean opportunities; use dollar cost averaging to smoothen price swings.

Market swings and volatility are part of stock market movements. They present opportunities for investors to buy on dips or enter into dollar-cost averaging (DCA).

With DCA, a set amount of money is invested at regular intervals over a long period of time. It can lower an investor's cost of investment and reduce the risk of investing at a peak.

For example, when prices are high, the set amount can buy fewer investment units or shares. Likewise, when prices are low, more units or shares can be bought with the same amount. It helps to smoothen the ups and downs in market volatility.

Most importantly, bear in mind one golden rule: The chain is as strong as its weakest link. Regardless of the size of your investments, be vigilant and disciplined when it comes to preserving, investing and growing your wealth.

The worst of the financial crisis may be over, but the global economy is not totally out of the woods yet. Lingering problems still exist, especially in the developed countries. However, opportunities exist even in the worst of times.

Governments outside the euro zone are also at risk of drawing flawed conclusions, especially on exchange rates and fiscal policy. China seems to think that the euro’s decline makes it less urgent to allow the yuan to appreciate. The opposite is true. With its biggest export market in a funk, China needs to accelerate the rebalancing of its economy towards domestic consumption, with the help of a stronger currency.

For much of the rich world, however, the most important consequences of Europe’s mess will be fiscal. Governments must steer between imposing premature austerity (in a bid to avoid becoming Greece) and allowing their public finances to deteriorate for too long. In some countries with big deficits, the fear of a bond-market rout is forcing rapid action. Britain’s new government spelled out useful initial spending cuts this week. But the emergency budget promised for June 22nd will be trickier: it needs to show resolve on the deficit without sending the country back into recession.

In America, paradoxically, the Greek crisis has, if anything, removed the pressure for deficit reduction, by reducing bond yields. America’s structural budget deficit will soon be bigger than that of any other OECD member, and the country badly needs a plan to deal with it. But for now, lower bond yields and a stronger dollar are the route through which American spending will rise to counter European austerity. Thanks to its population growth and the dollar’s role as a global currency, America has more fiscal room than any other big-deficit country. It has been right to use it.

The world is nervous for good reason. Although the fundamentals are reasonably good, the judgment of politicians is often unreasonably bad. Right now that is what poses the biggest risk to the world economy.