Be prepared for another market turmoil 2011

Creating wealth could be easier if you have invested your time, energy and money in the right places for the right purposes and of course with some "smart logical thinking" and following up with the world news around you. The day we cross from the stage of dependency to the stage of independence, no longer under our parents' charge, we automatically assume responsibility of our own time-line. This requires a sense of duty and care to plan and be responsible for our own futures as well as ensuring our self-discipline is always up on our head and levelled.

Nonetheless, there are many who simply live day-to-day, without much thought and preparation for the future. Unless you are contended with what you are presently doing and no worry or concern about your future and heck care, then simple life would do you better with no stress at all and probably you live life up to a century.

Some steps to taking charge of your future include having a plan, identifying your present resource position and allocating your resources to the right places. You should also establish a series of capital preservation programmes to enhance your savings as you move towards the retiree stage, and institute a proper distribution and succession plan for your loved ones.

In many instances, when reality finally catches up, people are caught off-guard and suffer the painful consequences of their careless attitude and you may find it too late to turn your steering around to miss the deadly corner.

One of the keys to achieving lifetime success financially is to engage in any higher level of education. Example, Financial education, which is more than just acquiring information and knowledge. Financial education is more than just knowing the facts if you want to make sure your financial portfolio continues to grow ( look at remisier king, Peter Lim, his wealth management is certainly up to mark with his piggy bank non stop growing ).

The real process of financial education should entail:

• Acquiring financial knowledge

• Being connected to the financial community

• Being engaged in financial development

• Being mentored by financial experts

• Being courageous to explore financial options

• Being clear about your own financial destiny

Financial planning creates a well-planned and well-organised time line that can withstand three major shocks:

Time-line shock

A proper risk management portfolio (RMP) must be established for your time line to manage all your risk exposure efficiently and efficiently. A RMP is the combination and coordination of a portfolio of risk management programmes to manage the different aspects, levels and degree of impact of the risks that you are exposed to everyday.

You may have purchased insurance policies without much consideration and coordination as to the scope of coverage, level of coverage and cost of coverage. As a result, you may be implicated in one of the following:

• Coverage that is not comprehensive enough - risks that you should have been covered for, but are not.

• Too low coverage amount - risks that you are currently covered for, but at too low a level.

• Too high in overall premiums paid - paying a larger premium than necessary.

These inefficiencies can be avoided by insisting that you are given a thorough financial health check before any insurance plan is recommended or purchased.

You should also insist that you are given a comprehensive selection of the insurance plans from different companies to compare and choose from so that you can have the best option in terms of coverage and premium costing, and insist too on being given a complete report on how your overall risk management portfolio can withstand the three shocks described here.

Self-funding shock :

One of the most overlooked aspects in risk management is the risk of 'self-funding shock'.

A classic example can be found in the way most people manage their medical risks. The cost of medical insurance plan increases every three to five years, depending on the medical plan.

If you are struck with a critical illness like cancer or heart attack, most probably you will be out of work for some time, and maybe even a long time. This could create a great challenge - who is going to pay the premiums for the medical insurance plan which is rising every three to five years?

The premiums can reach an unaffordable level after a few rounds of adjustment, so unless a funding mechanism is structured within the overall Risk Management Portfolio, your savings or cash reserves will be wiped out rather quickly.

Therefore, it is important to ensure that your overall risk management portfolio is able to withstand the self-funding shock and at the same time, provide you and your family with lifetime financial security.

Market shock :

A risk management portfolio without any element of protecting you against market shock can only be as good as temporary protection. We have seen so many cases in which the risk management portfolio was wiped out completely due to the inability to keep the program going in the midst of an economic or market crisis.

Market shock can only be managed through proper strategic planning. Understanding how the various impacts that inflation, economic data, interest rate and liquidity have on the market is vital to the successful management of your money in the capital market, be it fixed income, collective investments or direct investments.

Depending on your risk profile, your funds can be invested into tactical growth, balanced and income funds. The percentage of allocation into each of these investment categories will depend on your risk appetite, investment objectives, time horizon, capital desired to be accumulated and the portfolio returns needed to achieve your investment objectives.

Your objective here is to construct an investment portfolio that can withstand market shocks and also give you a decent rate of return of between 8 per cent to 12 per cent annually.  Do note that profit earnings do not come free of risk and the higher returns (ROI) you expect, the higher risk you would be facing when you plough your liquid assest into some investment.  Make sure your portion of buffer is sufficient in your reserves with part of your dollar thrown into risk investment.  The risk here we are not referring to the recent risk that a businessman has taken at the Resort World casino making a loss of over $26mil, that kind of irrational gamble deserve no pity at all.

Next year 2011 a bumpy economy ?

The global economic recovery since the severe recession of 2008-2009 was artificially boosted by various countries massive monetary stimuli and hoping to bailout their country's economy out of the financial turmoil. But the fundamental excesses that led to the crisis - too much debt in the private sector - have not been addressed, for private sector deleveraging has barely started. Now there is massive re-leveraging of the public sector in advanced economies, as a result of massive budget deficits driven by automatic stabilisers, counter-cyclical Keynesian fiscal stimulus and the socialisation of private losses.

Thus, a protracted period of anaemic sub-par growth in advanced economies as the deleveraging of households, financial institutions and soon governments, starts to kick in.

Moreover, countries that spent too much - the United States, Britain, Spain, Greece and others - now need to deleverage, and are thus spending, consuming and importing less, some may seem to be going into the "protectionism" effect although free-market does not endorse such practice. Countries that saved too much - those in emerging Asia, China, Germany and Japan - are not spending more to compensate for the fall in spending of the first group and in a world of excess supply, global aggregate demand will be weak, pushing global growth much lower.

The global economic slowdown for the second quarter of this year, will accelerate in the second half of the year. The fiscal stimulus will become a drag on growth as austerity programmes in most countries kick in. Inventory adjustment, which boosted growth for a few quarters, will run its course. The effects of tax policies that stole demand from the future - such as the 'cash for clunkers' scheme in the US, investment tax credits, tax credits for home buyers, or cash for green appliances - will fizzle. Labour market conditions will remain weak; a sense of malaise will spread among consumers.

The likely scenario for advanced economies is a mediocre U-shaped recovery, even if a W-shaped double dip is avoided. In the US, growth was already below trend in the first half - 2.7 per cent in the first quarter and a mediocre 2.2 per cent in the second quarter. It will slow down further to 1.5 per cent growth in the second half of this year and into next year. Thus, even if the US technically avoids a double dip, it will feel like a recession, given mediocre job creation, larger budget deficits, a further fall in home prices, larger losses by banks on mortgages, consumer credit and other loans, and the risk that the US Congress will take protectionist action against a China that has allowed only a token appreciation of its currency.

In the euro zone, the outlook is even worse. Growth is likely to be close to zero by the end of this year, as fiscal austerity takes hold, along with an increase in the cost of capital. Increases in risk aversion as well as sovereign risk will further undermine business, investor and consumer confidence in Europe. And the weakening of the euro will hurt the growth prospects of the US, China and emerging Asia.

Even China is showing signs of a slowdown as the tightening to deal with asset inflation takes effect. The slowdown in advanced economies and the weakening of the euro will further dent Chinese growth in the second half of this year. The world's leading growth locomotive is thus slowing, from over 11 per cent towards a 7 per cent rate by year's end. This is bad news for exporters in the rest of Asia, especially commodity exporters, who rely on Chinese imports.

Japan where domestic demand is anaemic will be hit hard. It suffers from low potential growth, given the lack of structural reforms and ineffective governments, a large stock of public debt, an ageing demographic and a strong yen that tends to get stronger during bouts of global risk aversion.

A scenario where US growth slumps to a mediocre 1.5 per cent, where euro zone and Japan growth slows to zero per cent, and where China slows below 8 per cent is not a global double dip but it will feel awfully close to one. Also, any additional shock could tip this fragile global economy, growing at close to stalling speed, into a full fledged double dip. The sovereign problems of the euro zone could get worse, leading to another round of asset price correction, global risk aversion, and financial contagion. Also, one cannot exclude the possibility that Israel might strike Iran within the next 12 months. Then oil prices could rapidly spike and tip the global economy into a recession.

Major policymakers are running out of policy ideas. If the risk of a double dip rises, some additional quantitative easing will not make much of a difference. Also, there is little room for further fiscal stimulus in most advanced economies; consequently, the ability to bail out financial systems that are too big to fail, but also too big to be saved, will be sharply constrained, given the fiscal deficits.

Thus, as the delusions of a rapid V-shaped recovery go out of the window, the advanced world will, at best, be in a long U-shaped recovery. In some cases - the euro zone and Japan, in particular - the U may stretch into an L-shaped near-depression, struggling to avoid a W-shaped double dip recession. Even the V-shaped recovery in stronger emerging markets will be dented, for no country is an island and many emerging economies - including China - are dependent on now-anaemic advanced economies.

With all said, both Europe and America seem to be suffering from delusions—of strength and weakness respectively. In Europe it is far too early to say of sign of recovery on at least two counts. First, Germany apart, the euro area remains weak. Spain, whose economy is barely growing and where the jobless rate is 20%, would love to have America’s problems. Second, Germany relies on exports, not spending at home: the home market is one of the few places where sales of Mercedes cars have fallen this year and obviously in bad times, such luxury items would be least wanted as they are not "needs".

How real are the risks of a double dip in the United States? The recovery has lost momentum in part because shops and warehouses are fuller, so that the initial boost to demand from restocking is fading. The housing bust still casts a shadow. Households must save to work off excess debts. Firms fearful of weak consumer spending are cautious about investing. Bank credit is scarce. All this stands in the way of a full-blooded recovery. But a slide into a second recession would require firms to cut back again on stocks, capital spending and jobs. The cash buffer corporate America has built up in case of harder times makes a fresh shock of that kind unlikely.

Yet even without a double dip, America could plainly be doing better. Its firms might be more willing to spend their cash if they had a clearer sign from Mr Obama how he intends eventually to close their country’s fiscal deficit (and the extra taxes that might entail). But in the short term eyes are fixed on the Federal Reserve. On August 10th the central bank acknowledged that the recovery had slackened and said it would reinvest the proceeds from the maturing mortgage securities it owns in government bonds. This was a small shift back towards “quantitative easing”—but less than the bears wanted.

Anxiety about deflation remains justified: any sign of it would require much bolder measures from the central bank. However, for the moment the Fed has sent the right signal: concern but not panic. Apart from anything else, it is not clear that yet more monetary stimulus would have created many new jobs. The relatively high level of job vacancies in America seems consistent with far lower unemployment. Some firms have complained that the available workers do not have the skills that they want. Unemployment, sadly, may thus have deep roots, with more people this time remaining out of work for longer. It will be a hard slog. But on the current evidence don’t expect America’s recovery to grind to a halt.

Next year 2011 may seem to be another critical performing year for the global economy and top policy makers better wake up from their comfort zone and start to think what else to do about the current "sick" economy condition.

By following Textbook strategy, we could try some luck below  :


One strategy is to buy long-term Treasury bonds, which many people already appear to be doing as a hedge against general economic troubles. Yields on 10-year Treasury securities have plunged to 2.8 per cent from about 3.8 per cent in late April.

Strategists who've expressed concerns about deflation aren't necessarily predicting a return to protracted, Depression-era downward price spirals. Robert Arnott, chairman of the asset management firm Research Affiliates in Newport Beach, California, said that while a brief bout of modest deflation was a threat in the short run, inflation - or rising prices that eat away at consumers' purchasing power - remained the bigger long-term menace. As a result, Mr Arnott isn't focusing entirely on near-term deflation. Rather than buying long-term Treasuries, he suggests an investment in Treasury inflation-protected securities.

Need to be choosy

Among corporate securities, investors should pay attention to companies' balance sheets. 'You want to avoid highly leveraged companies,' said Carl Kaufman, manager of the Osterweis Strategic Income fund. In a deflationary environment, a debt-ridden company would have to pay back obligations with increasingly valuable dollars.

In inflation, you're cheapening the value of dollars over time. In deflation, it's the opposite: dollars become dearer over time. Fixed-income investors may want to focus on high-quality companies that routinely generate tons of cash. The same argument goes for equity investors as well.

Standard & Poor's, says that in deflationary times, some stocks could actually post gains. Throughout the 1990s, when the Japanese stock market began to crater under the weight of deflationary forces, technology, telecommunications and healthcare shares rose on local markets.

Go for blue chips

Investors who want to maintain their stock weightings should consider high-quality, large, blue-chip companies that have balance-sheet strength. Companies like Google and Microsoft often have an added advantage: dominance over their industries, enabling them to maintain their prices even if others in the industry start to lower theirs.

Stocks that pay dividends would also make sense, because the cash thrown off by these shares would be quite valuable in a deflationary environment.

If investors really fear deflation, they might consider increasing the cash in their portfolios. There's a strong case for building up dry powder. If something bad happens economically - whether it's deflation or inflation - that generally provides a good buying opportunity for investors who have some cash

Happy 45th birthday Singapore !!

Darren Fifield

Managing Director

e-Dialog Asia-Pacific

Singapore is a relatively young country, but in 45 short years it has become a satellite business nation to Southeast Asia, and to the rest of Asia Pacific. It is where MNCs come to set up business and reach out to the world. Singapore's cultural and linguistic diversity is astounding. In spite of this, Singapore is largely English-speaking. Furthermore, the fusion of eastern and western business practices makes it easier for foreigners to adapt to the culture, business practices, and to adjust to the protocols of the nation. Today, Singapore is synonymous with development, growth and a bright future. It is truly among the top cities to live in for both business and a great quality of life.

Vinod Kumar

President and Chief Operating Officer

Tata Communications

It is indeed worthy of celebration that Singapore's anniversary should fall at a time when it's expected to chalk up the world's fastest full-year growth rate of up to 15 percent. This is an amazing turnaround for a country that was also the first in Asia to go into recession in 2008.

It's an exciting time for businesses. After a few difficult years, they have finally found the confidence and courage to invest in long-term innovation and growth opportunities. This bodes well for the communications and IT services industry, which plays a vital role in enabling the transition of the Singapore economy in the coming decade.

With the government's focus on productivity, innovation and support for knowledge based industries, we are confident that Singapore and Tata Communications, whose regional HQ is based here, will continue to thrive.

Lim Soon Hock

Managing Director

PLAN-B ICAG Pte Ltd

What pleases and excites me most about Singapore is our ability to transform ourselves and to overcome seemingly insurmountable obstacles. Singapore has also demonstrated that we have the tenacity and versatility to tackle whatever problems come our way, starting with Separation and on to the recent financial crisis.

As we move forward, while we continue with our economic and career pursuits, Singaporeans should set aside time for the family and make it a top priority. As we celebrate our 45th National Day, apart from making the national pledge, every Singaporean should make a personal pledge for the family, as it can potentially touch the lives of every Singaporean. If more Singaporeans pledge to marry early and have children early, we can be on the way to reverse the declining trend of our total fertility rate (TFR). When this happens, all Singaporeans will have a good reason to rejoice and celebrate in a bigger way.

Note: Lim Soon Hock is also the Chairman of the National Family Council

Daniel McConaghy

Vice President and Managing Director

FICO Asia Pacific

I would like to congratulate Singapore on 45 years of progress and economic success and make a special mention of the rapid strides it has made to transition from a regional to global hub in the banking and financial services sector in recent years.

The hallmark of Singapore's success over the years has been its winning mindset where policy makers abandoned failed models and creatively invented new ones thereby establishing a new status quo for other countries to follow. The nation's success in the banking sector is due to this visionary approach and an unrelenting commitment towards creating an environment where business risk was minimized.

Looking to the future, Singapore will need to find ways to create and exploit new competitive advantages, including renewed investments and enhancements to the country's risk management capabilities and infrastructure. In addition, the Singapore government would do well to continue with its bold and forward looking policy framework and build an operating environment that supports innovation as the future will belong to entities that seize the initiative as well as manage the uncertainties.

Andrew Tay

President

Zebra Technologies of Asia Pacific

I'm a firm believer in the dictum that life begins at 40, and at 45, Singapore has matured into a country that I am proud to be part of. The nation's excellent performance in the first half of 2010 means that Singapore is now set to become the world's fastest growing economy. While the future looks promising, the next 50 years are going to be a challenge. Our economy, though robust, relies a lot on its strategic geographical location, world-class talent and trade support from EMEA and North America. As such, we need to strengthen our relationships with the APAC countries and global emerging markets like Latin America. We need to remain hungry for, and dedicated to, continuous success and growth. If we do this, I am sure that Singapore will continue to be as successful 50 years down the road.

David Leong

Managing Director

PeopleWorldwide Consulting Pte Ltd.

...Our new leaders need new dreams.

Dream again, we shall again fly into another realm.

I think of bygones times, my admiration grew even more.

This National Day is a celebration for all.

A celebration to our new leaders not forgetting our rootsWho led us from dust to developed nationhood.

Happy Birthday Singapore!

Philip Chua

Country Manager for Singapore and Malaysia

Akamai Technologies

Singapore is the epitome of a "young achiever". At the age of 45, it has earned itself the reputation of having one of best infrastructures in the world.It is extremely heartening to note that Singapore is not resting on its laurels but is continuing to innovate and invest in the future. The Next Generation Nationwide Broadband Network (NGNBN) is currently being rolled out nationwide. NGNBN is set to change the way we will do business and consume online content - right from doing business in the cloud to live and on-demand HD streaming.Great innovations revolve around cities with world class infocomm infrastructure and on that note, here's wishing this wonderful city a Happy 45th Birthday. Akamai Technologies looks forward to contributing to Singapore's ongoing success.

E H Lim

CEO

Avi-Tech Electronics Ltd

Singapore has been built on the hard work, foresight and willpower of its people and its government. I am proud of the fact that we are today a thriving global city, one of the financial centres of the world with a developed legal and political system, excellent transportation and world class business infrastructure. Yet, despite the attributes of a First World city, Singapore still maintains much of its proud Asian heritage with a truly multicultural population.

I am looking forward to the next 45 years as we ride the wave of what many people believe will be the Asian century. With some of the world's biggest markets at our doorsteps, Singapore can continue to grow economically even as we develop as a society rich in culture and graciousness. I look forward to Singapore becoming a nation that can take its place among the globe's leading countries, and contribute towards the future economic and environmental sustainability of our planet. All my colleagues and I at Avi-Tech wish Singapore a very happy 45th birthday!"

Thirumalai Chandroo

Chairman/Ceo

Modern Montessori International Group

Like someone who has gradually come of age and gracefully matured with time, Singapore today exudes the class and confidence of a first-world nation that transcends borders and boundaries. What continues to impress and inspire me is the fact that, despite a lack of natural resources, Singapore has built herself up, brick by brick from a humble fishing port, to become rich in expertise and infrastructure. The year Singapore at 45 is a regional leader in finance, healthcare, infocomm and education, while concurrently setting international standards in the airline and shipping industries.

The immediate challenge is to leverage on the potential of our limited local and foreign talent so as to remain relevant and competitive in an increasingly cosmopolitan global village. Singapore is now reaping the fruits of her labour, and looking forward to greater opportunities that may present themselves in the new frontier.

William Woo

Managing Director

Xchanging Southeast Asia

A stable political set-up and an excellent economic infrastructure have made Singapore an ideal place for businesses to invest in and grow. The vibrant social environment makes it an attractive place for local talents as well as for expatriates. Most importantly, the meritocratic culture of Singapore gives it an edge over all other destinations for businesses as well as for individuals. I believe the times today bring opportunities as well as challenges for Singapore as it takes a prominent position in the recovering world economy. The challenge will be to sustain its growth momentum despite the slow recovery in the European and American economies. At the same time, Singapore has a brilliant opportunity to establish a strong position in financial services as well as new generation technologies and truly showcase its potential. At 45, Singapore is still a relatively young nation with tremendous potential. I believe the country has a great future ahead. Happy Birthday Singapore!!

Dhirendra Shantilal

Senior Vice President-Asia Pacific

Kelly Services

Singapore's resilience, tenacity and foresight has instilled confidence in its people to be proud of the distinctive global city we live in, one that has been a model of excellence for many others to emulate. In a span of 45 years, Singapore has grown from the strength of the industrial era to a knowledge-based economy at the forefront of the world's free market economies. Premier performances high up on the cultural quotient scale illustrate our nation's endeavour to be a well-rounded, all encompassing sanctuary for Singaporeans.

Looking ahead, human capital will continue to be the driving force for our nation's success. The key concepts of the knowledge economy that are knowledge and education are already deeply ingrained in the master plan for future growth, and will be the cornerstone for Singapore as a progressive nation to identify and address emerging global trends and economic growth sectors. Together, we the people, are well poised to harness the collective efficacy of a nation that will strive to build a better tomorrow for Singapore.

Deb Dutta

Vice President

Brocade Communications

Unlike most countries, the red dot has proven that size does not matter and it has done so for the last 45 years. The struggles and ideals of its founding fathers has created a platform of quality, efficiency and transparency that has drawn the world to it's doorstep surpassing the wildest dreams of 1965. A cursory glance across Singapore's skyline bears testament of this success. It has been imperative for Singapore to scout the world to attract best foreign talent to work and live here. Meanwhile, many Singaporeans are talent hunted to work overseas. Against this backdrop of shifting demographic ratios, social policies governing equality, fairness, tolerance and justice has to be in work-in-progress mode all the time. Playing to this year's NDP 2010 theme "One Voice", Singapore is more than the sum of its parts - that out of many, we are truly one. Happy 45th Birthday, Singapore!

R Dhinakaran

Managing Director

Jay Gee Enterprises Pte Ltd

It feels great to see how far we have come as a nation over these 45 years and how much we have achieved. Our vision as a nation and its meticulous execution over the years has been key to the nation's prosperity and wellbeing. Today, looking ahead, our challenge is to preserve and further this success and build a more inclusive society. As an aging country, we will be challenged by constraints on labour and welfare for the aged. Our quest for success will need to stretch beyond material gains and visible signs of success. Our ability to continue thriving as a successful multiracial country will be key for Singapore to remain attractive to talents from far and wide.

In the years to come the baton of leadership in all fields will be slowly passed on to the younger generation. These are people who have been born in a more prosperous Singapore and have embraced values which may be in variance from those of the earlier generation. Our challenge will be to understand and shape them better so that they are ready to take the next leap ahead for Singapore in the years to come. National Day always leaves us with joyous emotions, thrill and pride and salutations to the pioneering leaders who have had the vision and sacrificed so much to build the nation we love so much.

Dora Hoan

Group CEO

Best World International Ltd

Modern Singapore -- an economic powerhouse with one of the world's highest per capita incomes, excellent schools, outstanding health care and remarkable public services that have made it a magnet for global attention and admiration. The question: who and what kind of spirit built this remarkable city-state?

45 years ago, at the dawn of our nation's birth in 1965, our First Prime Minister announced "We shall be a Republic". It began with this dream. Our founding leader had the audacity to envision a multiracial and multilingual society that would be unified by a sense of a unique "Singaporean identity" where people, if they work hard and in harmony with society, can live life with grace and dignity. It was followed by succeeding leaderships that did its best to remain true to the vision, and stayed on track, building brick upon brick on the ideals of a "graceful society", and now an emerging "global city" where we aim for that "Athenian spot of light"-the comfort and lifestyle of a modern society as we work to lessen the disadvantages that often attend it.

Our people, in support of our leadership did not falter at what seemed like an improbable story of a nation that no one thought should even exist -- a nation with almost no natural resources, without a common culture, a fractured mix of Chinese, Malays and Indians, standing by itself to stay afloat and prosper amidst a sea of global uncertainty. In our search for the best solution, it is exciting how we seemed to have struck a unique formula for what makes a nation great, that is, people and government working together for the common good. The profoundness of this truth, the clarity of vision of our leaders' vision and the boldness of our people's purpose has turned our nation into the economic miracle of the modern world. Yet material wealth alone was not what sustained us. It is the sense of idealism and service borne of our social solidarity and national pride that have and will continue to drive us forward.

I see the many stages of our young republic not as self-contained but rather as a continuum. Certainly, our journey is not complete and not without its challenges. Yet amazingly, each period has evolved into one that is better than the last. Singapore took a different path as a nation that has made a choice to uphold civic citizenry based on responsibilities and respect for the common good, over individual merits and rewards. Rather than feel peculiar and discrepant about the path we have taken, we must in fact, feel uniquely blessed. Indeed, all our troubles notwithstanding, we are blessed to have the opportunity to dream and become co-creators of an "ideal republic" as envisioned by our founding leaders. It is a kind of society where we can live our dreams and where, if we work hand in hand, "enlightened political power" and the "empowerment of people" will finally coalesce and come to attain for all of us, the new meaning of freedom.

Deep Drilling in the Gulf

The Ensco8500, one of the two Keppel FELS rigs to be given the green light to re-enter the Gulf of Mexico.

The first two rigs in the series that Keppel FELS delivered - the Ensco 8500 and Ensco 8501 - were the first two deepwater rigs in the world to be given the green light to re-enter the Gulf by the United States' Bureau of Ocean Energy Management Regulation and Enforcement.

The new "fitness" certification requirement was introduced under the new regulatory framework following the BP oil spill in April and the subsequent ban on drilling activities until Nov 30 by the US government. These two units are now working again for Ensco's customers and are doing the owner proud with their excellent operations in the Gulf of Mexico.

The Ensco 8503 is slated to start a two-year primary term with Cobalt International Energy, L.P. in the Gulf of Mexico early next year. It is the fourth in a US$3 billion series of seven Ensco 8500 semisubmersible drilling rigs being built exclusively for Ensco. The remaining rigs are expected to be delivered through 2012.

[ Time flies, a few years on since the day I went to the Gulf to go on  board and take a look at the E7500 in 2005 while our management was talking to ENSCO for the building of 8500 series. Some improvements made to the 7500 which was built in US yard F&G Texas, former TDI Halter yard. Long way from Houston to Gulf, drove all the way 7hours to Louisana and from there another 2 hours to Holma for a chopper flight to the rig .... ]

7500 Slides 

Why bosses have to act "bad and tough" ?

Many management theories show the importance of supervisor-subordinate relationships. They are one of the principal drivers of employee engagement or the staff turnover. So why bosses still have to act tough and bad? After all, each year companies spend billions on leadership training and development. And the number of books on how to be a better, more effective leader must be approaching infinity. Suffice it to say although the boss may be “bad,” that boss has been extraordinarily successful and is continuing to thrive by any reasonable measures. That’s because numerous studies point to an inherent contradiction between the prescriptions about how to get the most from others on the one hand and the realities of what it takes to build your own reputation and power on the other. While being positive, supportive, and warm often gets the best from subordinates, being critical and even nasty results in more attributions of intelligence and competence. Because people usually get hired (and promoted) on the basis of how competent they appear, companies, sometimes unintentionally, reward precisely the opposite behaviors that would make someone a good boss.

Some studies show that people who want to appear smart engage in more critical behavior than those who want to appear nice or a control or silence group. Other research on group perception also shows evidence of a compensation effect, so that being rated positively on one dimension is likely to lead to being seen much less positively on a second dimension. Groups are perceived as either warm and incompetent or competent and cold. The conflict between the behaviors required to be a good boss and the actions often necessary to attain and hold onto leadership positions helps explain why many people find that their best opportunities for obtaining coaching and mentoring come from people not at the most senior levels nor on the fast track. Unless people can overcome the oft-observed psychological tendency to see the traits of warmth and competence as negatively related and softness as a sign of weakness, there seem to be very slim prospects for implementing all of the good advice about how to be a be a better leader.

Leadership "gurus," and lots of employees hate to hear this, but the truth is that the skill-sets and metrics for being a good boss, from the perspective of employees, are not necessarily aligned with those of being a good manager, from the perspective of the goals of the company.  In a brutally competitive global market, if you're a shareholder in a company - make no mistake, that's who owns the company - what do you want its leadership focused on, shareholder value or turning out "good managers?"

Can you have it both ways? But in the real world, well, you might just as well ask, "can't we all just get along?" It just doesn't work that way where human beings and the different level of educated people around your company are involved.

There could be companies and organizations rewarding "bad" behaviors and discourage "good" ones, and they do so to their own detriment. While this may appear to serve the company/organization's aims, one wonder if the "bad" CEO calculated the cost to the organization of losing the talent he alienated and having to recruit, train, and indoctrinate replacements? If so, was that cost worth the benefit of whatever outcomes the tough boss has achieved? Companies/organizations almost never look at the direct and indirect costs of "bad" or "tough" boss behavior because they are less visible than the potentially good outcomes the "bad" boss may achieve (but perhaps not less costly).

The cost of creating fiction instead of being honest with employees is the reduction in creativity, production and commitment they have to the overall good of the company. A feeling that you cannot trust the veracity of your superiors introduces worry and insecurity into the worker. That worry, combined with the general letdown, might cause the slide of the productivity. More to the point, it may cause someone to not suggest a radical change to a product or service that would double the profitability.

Managers shouldn't be 'old softies' who don't hold their employees accountable, they should insist on excellence from them, AS WELL AS from themselves. An excellent manager will inspire loyalty from excellent employees, who will stay on and help fight through downturns and troubled times, even when they could have better opportunities elsewhere. If the captain stays with the ship, the First Mate and others are more likely to stay with them.

Nasty may never be good! The same can be said for being cold or aloof. Unfortunately, such adjectives have come to equate superior knowledge??? By whose definition? The irony is that the opposite is more often true. Being understanding in approach does not mean one is soft. Seek first to understand is the mark of a strong mind and demands more courage than many percieive.

Leadership is now and always has been about influence. There is no conflict in the different types of behavior. As Ken Blanchard has known for years, the appropriate behavior for a leader is situational. Sometimes requiring directive behavior; other times requiring supportive and all of the nuances in between (coaching, collaborating, delegating...).

It was written in the late 1990's that there is a dearth of leadership talent in the ranks of corporate companies. Far too many experienced leaders were discarded leaving a vacuum. Too many people found themselves in leadership positions who had never been given the opportunity to observe and learn about how to lead. We have come to equate leadership with having an MBA, having read a certain number of books, or success in "climbing the ladder". These things can certainly be positive, but will not teach leadership. Leadership is an acquired skill requiring time, observation,learning, failure, examination, and practice; no different than the practice of medicine or law. Like an apprentice good leaders usually had the benefit of good example. We now suffer from leaders who have never had the benefit of observing real leaders practicing their craft. Now young leaders get up there purely by chances or just happened to be someone leaving the seat. They have less experience and not being trained to take on challenges before.

The older and senior employees are finding that the hard won knowledge, skills and capabilities earned while being loyal are no longer valuable in the employment market place.  Good luck to those organization with bosses thinking they have the great idea to move ahead with inexperience employees.