Public
A confidence hole
Public worries about Singapore’s big investment in Merrill Lynch and other troubled banks remain very high. By Seah Chiang Nee.
Aug 1, 2008

Despite its success in leveraging down its investment, Singaporeans are generally very concerned about the state of their state investments in Merrill Lynch – and other deeply troubled banks.

Of late spotlight has fallen on Merrill Lynch (ML), the badly hit US bank-brokerage firm, in which Temasek Holding has increased its stake – but succeeded in paring away its paper loss of US$2.5b.

Singaporeans I spoke to have expressed views on ML and the other foreign banks that I sum up as follows: It was premature, the judgment was poor and the timing horribly ill timed, but although it is badly battered it might be too early to dismiss it as a gone cae.

Some optimists agree with Temasek that the bank – like the others – will eventually survive the US and global financial crisis and return to its old glory.

“It’s a matter of time and staying power,” said one stock speculator.

These are the minority, though.

In the face of a lack of any substantial statement from Temasek on its current problems or future strategy to face the world crisis, people are generally expecting the worst.

The public broadly feels let down and believes Temasek could lose money or be forced to have Singaporeans’ hard-earned money tied up for years and years on its unprofitable bank investments.

Some are angry; others are desperately worried about their reserves, if not about losing part of them, at least in lost opportunities>

They fear this could lead the government to come up with more revenue-raising measures to strengthen the reserves, higher public fees or more expensive publics flats.

A few are wondering whether, in the event of the deal failing, whether it may adversely affect the rule of the People’s Action Party (PAP).

Some of the fears about their savings are exaggerated, but they very real, which requires government clarification and assurance.

The following is a cross section of recent online comments: -

Comments
Source: Online Citizen

Dr Syed Alwi
The PAP better pray that this investment deal works out! If it fails - I think people will skin the PAP folks alive!

ahsayman
I'm no economist, so Temasek was savvy enough, but what if Merril Lynch goes under? We still get our money back in 30 years? Or do we move on again?

Daniel
Only a naive and innocent chap will accept a 30 years investment.

Bear Solo
Dr Syed, don't hope for the people to skin PAP alive, because most Singaporeans don't know and/or don't care. This practice of non-transparent dealings suits PAP just fine.

hongjun
Whenever a stock falls by 50%, we need 100% rise to get it back to the original buy price. I think we need to pray really hard to make sure it will recover!

mr kit
Can you smell all that tax money burning in the air? All the blood sweat and tears of the common man are in it? Sweet isn’t it?

Harrison
Not too long ago, Ho Ching was conferred as among the most powerful women. Now, we understand the real reason behind this dubious and sarcastic award that she so humbly accepted.
The power to lose multi-billions and still get paid multi-millions without being questioned by the board of Temasek Holdings. This is not only powerful but ridiculously so.

lol
(The leaders) made the wrong bet. We can only depend on the foreign press!

dumbspg
Please tell me, if half of our foreign reserves were to be lost, what would our dollar be worth then? Will we have to pay more for our mortgages? Will inflation hit the roof? I’m so worried.
Maybe, maybe we should give more support to the Minister Mentor, Senior Min8ister, Prime Minister and Ho Ching Oh! I forgot Mah Bow Tan. You know whatever portfolio he holds, he always makesmoney, I think he should assist Ms Ho and Temasek. Thank you.

Yuchengko
Interesting food for thought. AT might have played up the part on CIC & GIC getting conned. But the lack of due diligence is frightening. Throwing good money after bad? My parents always cautioned there won’t be big frogs all over town for you to grab - good things aren’t easily available. If there is ever to be a turnaround, it will be a long time waiting. Good luck everybody!

rafi
I think it is meaningless for people without economic and financial expertise, like us, to judge whether it is a sound investment.
Sorry, but I think it’s not strong enough to conclude that the investment decision is bad one over a longer term.
I do not have indisputable evidence that it is good either. But I want to say that it’s simply impossible for non-experts to judge, and I prefer to withhold judgments.
But that’s an entirely a different question altogether on how sovereign funds should be utilized, and this issue not specific to Singapore only.

Daniel
quote “I think it is meaningless for people without economic and financial expertise, like us, to judge whether it is a sound investment.”
Even you ask a financial expert, they will tell you the same thing. It is a gamble. Whatever condition they put to hedge the risk is no excuses for gambling. There is only a Win and Lose in term of dollars.
Question is why is the government gambling on frail banks and not on citizens, and why government gambling on building images and not on substances? Why not treat the citizen better instead as economic slaves?

Dr Syed Alwi
To me - the issue is NOT about the merits and demerits of the investments. To me the issue is one of values and priorities.
Why is it that the Government REFUSES to help the lower and middle income groups with some subsidies in this time of hardship - but yet - the Government is completely willing to risk losing billions of dollars of public money in risky and controversial investments?
(from OnLineCitizen forums)