The reason is that consumer lending is primarily driven by mortgage lending, which is a relatively low-margin business.

RB S banking analyst Trevor Kalcic

Malaysian group says haze originating from Indonesia "eco-terrorism".

CEOs win Entrepreneur award

SINGAPORE

They are Mr John Tan, Chief Executive of ACR Capital Holdings; Ms Olivia Lum, Group CEO of Hyflux; and Dr Ng Chin Siau, CEO of Q&M Dental Group.

One of the three will be Singapore’s representative at the Ernst & Young World Entrepreneur of the Year awards to be held in Monte Carlo next year. He or she will be announced at the Ernst & Young Awards Gala here on Dec 2.

E&Y said an independent judging panel selected the winners from a pool of over 50 nominations based on their merits in fulfilling six criteria.

These include entrepreneurial spirit, innovation, personal integrity and influence, financial performance, strategic direction and global impact.

Country managing partner at Ernst & Young, Mr Steven Phan, says the three winners are exceptional first-generation entrepreneurs who have created compelling business propositions in very niche areas.

[same  CANDIDATES    ? ? ? ?

 same  AWARDEES    ? ? ? ?]

This is the first time in the nine-year history of the awards programme that it has received nominations in such diverse fields as dental healthcare and reinsurance, he added.

Mr Phan said the nominations reflected the diversity of entrepreneurial talent in Singapore and the attractiveness of Singapore as a start-up and investment location.— Three chief executives have been named winners of the Ernst & Young Entrepreneur of the Year awards for 2010.

Jonathan Peeris

Large capital inflows a risk

Rachel Kelly

rachel@mediacorp.com.sg

SINGAPORE — Too much of foreign capital is too much of a good thing. The World Bank says a risk to economies in East Asia is the return of large capital inflows, which are driving up prices and causing inflationary pressure. 

Inflation in China — Asia’s largest economy and the world’s second biggest — accelerated to the fastest pace in almost two years in September, according to data out yesterday. September’s inflation rate was 3.6 per cent over a year earlier, compared to August’s 3.5 per cent and well above the 3 per cent official target.

Helping drive overall prices higher was a 6.1 per cent jump in food costs due to shortages of vegetables and other items.

China — the world’s fastest growing major economy – is sucking foreign capital in billions of dollars at a go. And too much money — together with the domestic stimulus — is fuelling a property bubble which has prompted the Chinese authorities to take steps to prevent overheating.

World Bank’s chief economist for East Asia & the Pacific, Mr Vikram Nehru, said:

“In China the authorities have used a variety of measures to try and curb credit growth. The bulk of those measures have been through administrative means, specific targets and so forth for banks.”

“So this is part of a more concertive action by the Chinese to take some of the froth off the real estate sector and try to stabilise asset prices.”

Other countries in East Asia are also grappling with large and rapid inflows of foreign capital and are adopting different strategies to deal with the challenge.

Mr Nehru said that some of these countries were “simply allowing their currencies to appreciate and that is one way to try and absorb the inflationary pressures that might be coming through these capital inflows”.

He added that some countries had been intervening in foreign exchange markets to try and reduce the volatility of these inflows or were keeping a close eye to see what was happening in the banking systems.

G20 finance chiefs aim to avoid currency wars

SEOUL

Finance ministers and central bankers will say after talks conclude in Gyeongju, South Korea, tomorrow that they want a “more market-determined exchange rate system that minimises adverse effects of excess volatility and disorderly movements in exchange rates”, a G20 official said yesterday, citing a draft statement and speaking on condition of anonymity.

G20 policymakers are convening amid concern countries are pursuing weaker exchange rates as a route to stronger economic growth, either by limiting currency gains with interventions like Japan or by discussing possible monetary easing, as the United States and the United Kingdom have done.

The risk is of a protectionist backlash that curbs economic growth, with emerging markets including Brazil and South Korea already introducing capital controls to stay competitive.

Treasury Secretary Timothy Geithner said in a

Mr Geithner delayed a report on foreign exchange markets last week, saying the yuan remained undervalued and that China needed to show continued commitment to allowing the currency to rise against the US dollar over time. The yuan has risen about 2 per cent since a two-year peg against the greenback was scrapped on June 19.

People’s Bank of China Governor Zhou Xiaochuan said his nation needed to avoid the “shock therapy” of excessive yuan appreciation and “very fast” gains probably would not end global economic imbalances.

Chinese Premier Wen Jiabao also warned of the dangers of a rapid rise, saying yuan gains of 20 to 40 per cent would exacerbate unemployment and cause social upheaval.

Mr Marc Chandler, global head of currency strategy at Brown Brothers Harriman and Co in New York, said the US is trying to forge a united front among the G7 nations in urging China and other emerging market nations to let their currencies rise.

“How the dollar does against the euro and sterling might be different than how the dollar does against Asia,” he said. Mr Chandler predicted there would be increasing pressure on China at the G20, without an international agreement on intervention such as the Plaza Accord in 1985.

[Xtremely OUTdated  1985 AccOrd    ? ? ? ?]

[COmplacency  IncOmpetence  NeglIgence  ExUberance    ? ? ? ?]

Canada wants to “address, with our G20 colleagues, mechanisms to enhance and timelines to enhance the flexibility of currencies”, Bank of Canada Governor Mark Carney said yesterday.

Bank of England Governor Mervyn King said finance chiefs need to reach a “bargain” to coordinate economic policies, though real agreement would require a “revolution”.

The US backs current-account targets to gauge whether individual trade surpluses or deficits are sustainable, and Mr Geithner wants the International Monetary Fund to take on a larger role of economic surveillance. — Group of 20 finance chiefs plan to say members will refrain from the “competitive undervaluation” of their currencies in a bid to soothe trade tensions before they derail the world economy.Wall Street Journal interview published yesterday that China needs to let the yuan rise so other emerging market nations will feel comfortable letting market forces affect their currencies, repeating a theme from speeches he gave earlier this month. He also said that “major currencies” were “roughly in alignment”.Bloomberg

Elderly and exploited

Low-wage workers often subjected to unreasonable rules

Letter from Arthur Lim

I READ with sympathy the letter from Ms Jessie Chong about her father’s experience upon landing a job as a cleaner (“Clean up treatment of cleaners”, Oct 19).

I am not surprised such treatment exists and could be commonplace, especially for senior citizens employed in the cleaning industry.

I have met some elderly cleaners, working for a pittance, who told me that they are expected to remain standing throughout their work hours, even if their assigned areas are spotlessly clean.

I once asked one such cleaner: “The toilet is so well maintained and there is nothing more to clean. Why don’t you just take a seat and rest for a while, and get up to clean the area when the need arises?”

His answer: “No, I can’t because if the supervisor sees me I’ll be fined $50.” When asked, he told me he was paid about $800 a month.

Imagine, if he sat down 16 times in the course of a month, he wouldn’t be paid a cent. What right does the cleaning company have to impose such a penalty?

Of course, everyone likes a clean toilet but expecting a cleaner to stand still like a robot is clearly thoughtless exploitation.

The authorities encourage the elderly to work into their golden years but more can be done to address such abuse.

There must be legislation in place to ensure employers do not have the right to arbitrarily impose financial penalties. If such penalties are imposed there should be a limit to the fine, based on the monthly salary.

Many employers get away with such rules because many of their workers do not know the legality of such practices, thereby opening the door to abuse.

The authorities should take the lead to ensure such abuse is not condoned and act on it rigorously when a complaint is made about a company.

A snip in time saves lives

Letter from Chung Siqi

I WRITE in response to “Addict sterilised in Britain in exchange for cash” (Oct 19).

Despite accusations of the charity’s action being morally reprehensible and irrelevant, I feel that this controversial project is commendable as it benefits a majority of society.

Should addicts conceive, apart from the damage done to children, there is the damage done to society. Not only will addicts be unable to support their families because of their drug problem and criminal activities; social services may even take their children away. His or her family would ultimately be forced to survive on donations from the rest of society and the healthcare system.

The implementation of such a system is a win-win situation since a person’s autonomy to get sterilised (albeit for cash) is respected, plus there will be an overall reduction in risk and cost to society.

Perhaps the charity could look to other means of contraception which are less permanent in nature. Reproduction capabilities of its subjects will not be affected and detractors may be appeased.

Notwi thstanding the shortfalls which I have addressed, I feel that this movement is good for the majority of society in the long run and should be applauded.

I am trying to do the right thing with regard to the dengue situation, yet I am left frustrated.

Why the seeming apathy?

China hides rampant inflation in money binge

Patrick Chovanec

Money, money everywhere. At least that’s what it feels like at the moment in China. Awash in luxury cars, condos and expensive jewellery, the Chinese are enjoying what looks to be an unstoppable boom.Bloomberg

The writer is an associate professor at Tsinghua University’s School of Economics and Management and is an independent fund adviser. The opinions expressed are his own.

>> China’s rate hikesand Singapore B1

Inflation figures due today should give pause to those who assume China’s economy is on sound footing. To an extent few appreciate, China’s astonishing growth rates these past two years have been fuelled by an even more astonishing expansion of its money supply, by more than 50 per cent. Until now, the inflationary consequences have been largely camouflaged in the form of rising asset prices.

High-end property prices in dozens of Chinese cities doubled during the global financial crisis. Sales of gold bars have done the same this year. Fine pieces of jade are selling at US$3,000 ($3,950) an ounce, up 50 per cent in the past couple of months, while packets of certain types of Da Hong Pao tea are going for US$30,000 a kilogramme.

Art and wine auctions in China are pulling in record prices, while the Shanghai stock market surged 8.5 per cent last week to the highest level in almost six months.

Now there are signs that inflation is spilling over into consumer prices. China’s CPI has been climbing steadily all year and Chinese officials are making noises about raising their CPI target to 4 per cent or even higher. Food prices gained 7.5 per cent in August, from a year earlier. Economists estimate wages are rising about 8 per cent. The HSBC Holdings Purchasing Manager Index survey for August reported a marked increase in input cost being passed along in higher output prices.

As inflation comes out from hiding, the authorities may be forced to sharply rein in liquidity, turning China’s cash-fuelled boom into a bust.

If it seems like there’s a lot of money sloshing around the Chinese economy, that’s because there is. Over the past two years, M1 expanded by 56 per cent, M2 by 53 per cent.

Currently, even with much-touted “cooling measures”, both are still growing at an annual rate of about 20 per cent.

Unlike the United States, China never really had a fiscal stimulus, where the government spends its own money directly.

The funding for infrastructure and other projects to juice up the Chinese economy came almost entirely from a boom in lending by the state-run banking system.

Last year, those banks made almost 10 trillion yuan ($2 trillion) in new loans — more than double any previous year — expanding the country’s loan portfolio by a third. This year, they will probably lend 8 trillion yuan, almost twice as much as in 2008.

Where did all that money come from?

It came from Chinese banks being allowed to draw down on their reserves, which opened up a cascade of new lendable funds throughout the entire system. China’s lending boom was, in effect, a massive monetary stimulus, or “quantitative easing”.

The pressure behind this monetary eruption had been building for some time.

For years, China has been running big trade surpluses. To maintain the yuan’s peg to the dollar, its central bank must buy up the excess dollars earned by Chinese exporters, to be stockpiled as foreign exchange reserves, and issue yuan in exchange. Normally, that newly issued yuan would add to China’s domestic money supply and fuel inflation.

To prevent that, the authorities try to “sterilise” the monetary expansion by forcing banks to hold higher levels of reserve deposits and buy special central bank bonds. In short, there was a huge reservoir of liquidity bottled up in China’s banks, just waiting to be let out. The low loan-to-deposit ratio of Chinese banks, often touted as evidence of their financial solidity, is really a product of pent-up inflation.

The main tool used to boost bank reserves was the annual lending quota imposed by the central bank. Since banks could lend up to the quota, but no more, most had no choice but to hold excess reserves beyond their reserve-requirement ratios. Then last year, the lending quota went out the window. Actual reserve ratios fell from 21 per cent to about 17 per cent.

China’s central bank issued more “sterilisation” bonds, but effectively, it stopped sterilising. Trillions of yuan, formerly locked up in bank reserves, flowed into the economy.

The amount of yuan created far exceeds even China’s nominal, stimulus-fuelled gross domestic product growth for the period.

When money is created at a faster rate than real economic growth, the result is inflation.

Yet so far this year, China’s official statistics show consumer inflation at barely over 3 per cent. Those figures have many economists scratching their heads, wondering where the inflation went, while most people in China seem content to believe their country has found a fantastic new formula for prosperity.

In reality, there is rampant inflation in China.

It’s just showing up in asset prices.

The new money that was created entered the economy as loans, mainly to fund investment in fixed assets. When it finally reached consumers, they bought tangibles, like property, instead of spending on consumer goods.

Asset-price inflation is tricky because it doesn’t feel like inflation.

When the price of bread doubles, it feels like it’s getting harder to make ends meet.

When condo prices double, it looks like smart investors are getting rich. But it’s only a matter of time before asset inflation starts working its way through the rest of the economy as broader price inflation — and puts China’s policymakers in a serious bind.

Said Dr Yaacob: “I don’t think we need to cut back on anything in terms of our daily activities but, for those who are slightly sensitive to haze, I think they have to curb their outdoor activities.”— The fact that the haze has returned only five days after an Asean meeting to address land and forest fires in the region has left Minister for the Environment and Water Resources Yaacob Ibrahim — in his own words — “a bit disappointed”.

Time  to send  the   affected  RESIDENTS  to  INNOVATE

MINISTERS  had  been  talking  for  over  a  DECADE  since  the  1990s    withOUT  sOlUtIOn    ? ? ? ?

pharoah88      ( Date: 20-Oct-2010 18:52) Posted: go to msn.com Welcome to xinmsnMake this my home page Haze back in S'pore User Photos: Air quality dips to 84 on the PSI Index HAVE YOUR SAY: Haze returns to Singapore   ASEAN ministers to meet and discuss measures if haze worsens

A million protest pensions plan as fuel shortages bite

A million protest pensions plan as fuel shortages bite

PARIS (AFP) - – Strikes threatening to paralyse France's economy looked set to rumble on into Wednesday after a million people took to the street for their right to retire at 60 and fuel shortages began to bite.

Clashes erupted between youths and riot police in several towns Tuesday and shops in the city of Lyon were looted as workers and students came out in force around the country to protest President Nicolas Sarkozy's unpopular reform.

Sarkozy refused to back down however and leading unions in some sectors including airports called for stoppages to continue on Wednesday, while oil refineries remained blocked, hit by a week of strikes.

The DGAC aviation authority said a quarter of flights from Orly, Paris's second-biggest airport, would be cancelled on Wednesday morning but did not detail further disruption at the main hub, Charles de Gaulle.

Facts: France's biggest demos

Around one in three flights at Roissy-Charles de Gaulle and regional airports were cancelled on Tuesday, while one in three filling stations ran out of fuel, the government said.

The latest day of protests, the sixth since September, drew around 1.1 million people onto the streets, police said, slightly fewer than the 1.23 million on the last comparable day, October 12.

The CGT, France's biggest union, told AFP it estimated overall turnout at 3.5 million, equal to its estimate for October 12. Unions' estimates have habitually been several times higher than those of police.

With more than 200 protests on Tuesday, all 12 French oil refineries shut down by strikes and truckers blocking roads, Sarkozy instructed the cabinet to draw up a plan to stop France grinding to a standstill.

Environment and Transport Minister Jean-Louis Borloo said that "a little under 4,000 petrol stations are awaiting deliveries." There are around 12,500 filling stations in France.

French fuel and heating federation FF3C said the "extremely worrying" situation "should definitely be called a shortage", while the International Energy Agency said France has "sufficient stocks" to deal with the situation.

Authorities in Normandy requisitioned 12 petrol stations for use by rescue and emergency services, while Prime Minister Francois Fillon said a third of departments or local administrations were experiencing fuel shortages.

Fillon chaired a meeting with several ministers and oil industry officials on how to deal with the crisis and ministers later held talks with Sarkozy.

Fillon's office said the government would ensure access to fuel depots, many of which are blocked by strikers, and that distributors would pool their fuel and trucks to help needy stations.

The interior minister promised tough action as clashes erupted anew outside a secondary school in Nanterre, near Paris, where youths burned a car and threw rocks at riot police for the second day in a row.

Police fired tear gas and arrested nine youth protestors in Lyon who had overturned cars and set one alight. At least five shops were later looted, police said.

Nine people were arrested Tuesday in Paris, police said.

The ministry said that 1,158 troublemakers had been arrested at demonstrations since the start of the week, 163 of them on Tuesday morning.

The powerful CGT union's transport section called for their strike action to be renewed on Wednesday, encompassing airport staff, air traffic controllers, public transport workers and employees of national railways operator SNCF.

Unions want to force Sarkozy to abandon a bill to raise the minimum retirement age to 62, which is in the final days of its journey through a parliament in which the right-wing leader enjoys a comfortable majority.

Most French back the current protests, with a poll published Monday in the popular Le Parisien daily showing that 71 percent of those asked expressed either support or sympathy for the movement.

A poll published Tuesday showed that Sarkozy's approval rating dropped this month to its lowest in three years at 30 percent, two percentage points less than when the main pension protests started in September.

According to the ideology of the American Dream, America is the land of limitless opportunity in which individuals can go as far as their own merit takes them.

According to this ideology, you get out of the system what you put into it.

Getting ahead is ostensibly based on individual merit, which is generally viewed as a combination of factors including innate abilities, working hard, having the right attitude, and having high moral character and integrity.

Americans not only tend to think that is how the system should work, but most Americans also think that is how the system does work (Huber and Form 1973, Kluegel and Smith 1986, Ladd 1994).