Banking

My web connection is a tad dodgy today. So this post might not make it up. Rebooted my laptop for no effect, then tried getting Windows to diagnose the connection woes. I can get msgr now (skype was never a problem somehow), but can't get hotmail, so msgr is telling me that I have emails, and I can't get to them. One of those emails is a password for YET ANOTHER password reset by steam in my ongoing war with steampowered.com. Their site keeps saying that my password is wrong, but then won't send me a reset because it 'doesn't recognise' my email address, and you can't contact steam support without logging on - their incredibly stupid and user hostile website does not have any email contact or issue logging form that can be accessed without first logging on. So I use another steam account to log in to report the problems with my 'real' account, and they continually reset my password and think that this is the sole solution. This last email had the incredibly stupid comment that passwords are numeric only - then they wouldn't be passwords dolt, they would be passcodes, anyhow, my password has always been a mix of alpha and numeric, and my second account is pure alpha (a very rude phrase about steam with no spaces). The main problem is, of course, that steam won't let me buy anything online. They say that the transaction is always refused by either PayPal or my credit provider (i.e. my bank and VISA), both of whom state that the transactions aren't being stopped at their end and I 'should contact the merchant' about the problem. The problem is that steam is totally twentieth century, they, not PayPal or my bank, they refuse the transactions because my IP address is stating that I am in a different country than my PayPal and VISA accounts. No kidding! It's called THE GLOBAL ECONOMY geniuses! To satisfy steam I would have to create a new PayPal account for every country that I visit. And the worst of it is their total refusal to acknowledge that they are in any way actually responsible for any of this.

But this rant has nothing at all to do with what I am going to blog about today...

As I have previously mentioned, I follow a few Singaporean blogs, it started as researching the country that I was thinking of moving to, and has kept up both because some of them are okay and to keep abreast of things.

I generally check them on a weekly basis; since most of them don't blog very often checking daily is pointless.

The ones I most often check are: mrwangsaysso.blogspot.com, miyagi.sg, mrbrown.com, [deleted]'s xiaxue.blogspot.com, dawnyang.com mostly, and a few others. There are probably twenty in the full list in my favourites and that is only the ones that I could remember / find to add to my favourites on my Asus laptop, there are more in my FireFox favourites on my box back in Oz (also an Asus) that I had emailed to me recently but haven't gotten around to adding yet.

Note that I do not play favourites; I always read Mssrs Brown, Miyagi, and Wang together (there are two others that should be in that group as well, and will be when I check my FireFox listing) and I always read Xiaxue and Dawn Yang together. I have to admit that the ladies perplex me; why have nose jobs but then photoshop your pictures? Why didn't you both get the noses that you wanted in the first place? Anyhow, I am a firm believer that Euro style noses don't necessarily go too well with an Asian profile.

Anyhow, I was walking back from the post office, having posted a form to get the bond from my last rental in Australia returned, when it occurred to me that one of these gentlemen was sabotaging the Singaporean financial system!

No shit!

I am totally serious.

If you remember your first economics subject (probably either 'introductory economics, economics 101, introduction to financial economics' or whatever, depending on where you studied) you will recall how the banking system works. And if you didn't do one of these subjects then 1) you will just have to take my word for it, and 2) you should not be offering advice to others on the subject. If you give money to a bank (as in make a deposit) it keeps some, the level is set by legislation and both differs between countries and changes in each country, and it lends the rest out. What this means is that if you lend $100 to a bank and it keeps $10 and lends $90 out, then the bank only has $10 in cash. The theory is that the $90 goes somewhere, gets spent, but ends up back in the banking system, maybe in a different bank, but in the system somewhere, where $9 will be kept and $81 lent out again, and so on. This ends with all $100 of cash being in the banking system, and there being $900 owed to the various banks that make up the system, but there are $1000 of deposits recorded in the books. This is taught so that we understand how banks create money (specifically debt, non-cash money), it is also part of the explanation given to us as to how governments control the financial system (namely by controlling the ratios involved).

The point is that there are $1000 of deposits but only $100 of actual paper money in the bank.

This works because history has shown us that only 10% of the money is withdrawn during any set financial period.

Unless some dufuss comes along and advises people to take all of their savings greater than $20,000 SGD out of their bank accounts! It matters little that he advises readers to put that money into another bank, that would only work if the mass of the population took their monies out and re-deposited it at a measured pace, which was not advised. No, what was advised was that all Singaporeans withdraw masses of cash from the financial system and cause a system-wide liquidity problem leading to an immediate, get that - immediate, collapse of the Singaporean financial system and all banks based within Singapore. This could only be averted by the authorities freezing all funds.

The result of this foolishness would probably be hundreds of jobs lost, significant impairment of Singapores ability to operate in the global market, a total loss of face for the Singaporean financial system and a total loss of trust by other market participants in the Singaporean financial system. And that is if the government acted quickly to freeze funds, if they did not then there would be tens of thousands of Singaporeans joining the ranks of the unemployed, total bankruptcy of the nation. And it would take ten to fifteen years for the nation to recover. Foreign talent (like me) would just take our six digit salaries to some other economy. I work by contract, I can move anywhere.

Thankfully no one paid heed to this ill advice. But it does make one wonder how an individual can elucidate at length upon a subject they understand so little. Undoubtedly he was thinking of the good of the individuals he addressed, but he totally failed to see the bigger picture. There is a word for this; where individuals take action for their own benefit, but which is bad for the group, and bad for all individuals if all individuals take this same action. But at this moment I cannot recall the name of the theory that covers such behaviour.

Anyhow, the point is that he should not be considered a safe financial adviser. Or, to put it another way, he should stick to his area of expertise.

Being a member of society is reason enough to comment on social issues, we all have the right to speak up about cultural and political subjects, we can all comment on the behaviour of drivers parking on double yellow lines on corners, and if a person has legal qualifications then they are well suited to speaking about legal issues. But a person should refrain from making definitive statements of a financial nature unless one is a qualified accountant or economist. And you have probably figured out that I have such qualifications, and, I might add, twenty years experience.

Not that I want to get offside with a person that I generally consider to be intelligent and well written and whose blog I shall continue to read, just that this time his comments moved outside his area of competency and need correction. Although, in my usual manner, I have probably stomped far too hard.

And that ends todays rant.

Yes, that's right, there is no apostrophe in "todays rant" since the day does not own the rant. As there is no apostrophe in "King Georges Street" since the street is named in honour of the king, not owned personally by him, and no apostrophes in "KK Womens and Childrens Hospital" since the women and children do not own the hospital. Unless, of course, you are writing in Singlish rather than English.

I should actually clarify this; there used to be a non-possessive apostrophe in the written English language, but its use was discontinued, formally, by the international body that controls the English language. It just seems that somebody forgot to tell Singapore.

(Naturally one expects Americans, such as Microsoft Word spell checker, not to get this correct.)

But that is a whole different rant.

[Addendum - yeah, I deleted a name there. I thought about it later and realised that I don't have my full / real name up here, so I should respect the desire of others not to have their full or real name known for their blog. It was thoughtless of me and I should be a bit more mature than that.]

[Second addendum - it's called 'game theory'.]