Wednesday, September 24, 2008

Dynamite Economy 3 Summary for Deadly Urgency

Solvere, Cognose LIM Swee Keng (Sep 22, 2008)
http://www.cts-ideas.com/ tab Cognose.blogspot.com
Dynamite Economy 3 – Summary for Deadly Urgency

What we see today, collapsing, chain collapsing of financial institutions, like a dominos. The root causes have been discerned as early as 2001,[1] since then, time, scale, together with cause, effect, wrong solutions and resolutions have been detailed.

Financial industries depends on the economy at large, this reflect also the economy at large.

By 2000, innovation came to a halt, economy, predominantly technology-led economy definitely come to stagnation. No new, significant industries has been racing for listing, investment bankers face over-capacity.

However, Over Abundance Wealth (OAW) has been cumulated that find no profitable ventures. Negative interest rate and war were predicted then. So they were.

Negative Interest rates are fabrications.
Fabrication has no limit, so free wheeling of fabrication escalated till stand stark as most profitable, biggest employers, in 2007.


To inject Well Governed Funds to Free Private Hands, in the market flooded with OAW, is analogous to inject sugar into diabetics. It will clog the arteries, impair physical body, and caused stroke, paralyze. Again it has been forewarned. It was taken note, but not acted adequately.[2],[3],[4] The situation today, is the outcome – parallel to The Great Depression.

The said reference to Japanese similar rescue in the 1990 by her Financial Service Minister of State Yoshimi Watanabe, is irrelevant. Unlike America, Japanese was a smaller economy and did not lead all the major fields of industries. The funds latter were quickly absorbed into new immense industries - the internet, mobile communications expansions - the most rapid technology-economic expansion in history. There was no impact to commodities prices that sink the economy, as we see today.

Free Private Hands, is subjected to no governance, no obligation to facilitate the bigger picture. When they are over-endowed with OAW, they move from financial instruments (which are not factor of production) to commodities (key factors of productions). When bank call for liquidity, OAW in private hands has no obligation to response, this is Credit Crunch in OAW. This is worse than stagflation, because stagflation is merely a phenomenon spanning private, public sectors. While OAW overloaded in private, ungoverned hands, is a dynamite-clogged arteries, clogging every passage of economic activities – material, transport, communication.

Many drew parallel to The Great Depression.
No one has mentioned of its sequel – WWII.
This may be because after two major campaigns, no one can foresee mighty power will commit another.

However, today real weapons and virtual tools while multiplied in power, are miniaturized in size and within the access of private, many faceless people. Without visibility, governance, accountability, the damage will be much bigger, wide spread, unpredictable, uncontrollable. The damage will be far beyond the sequel of The Great Depression – WWII.

With globalization, with weaken, poorer governments, the outcome will be worse than WWII.

So before we foolishly empty nations’ vaults, weaken governments, we must act to prevent such tragedy from happening.

Here, practical solutions, that take priority to address the nature of human is presented, supported by technology, invention, apply with philosophical depth.

To mop up the OAW from Free Private Hands is the right approach.
To create new industries, in innovative way, immediately implementable is prescribed.
The outcome will be to bring
1. millions urbanities and billions rural farmers busy creating wealth,
2. to keep them occupy, so that even their insatiable nature is fulfilled, because
3. their vigor is engaged in meaningful, profitable engagement.

The Fed, the Treasuries may think such fundamental approach take too long, but the correct treatment for all serious ailments took long time, arduous effort, patient to heal.

Taking any quick approach, like pouring well govern funds into OAW market, is like helicopter dropping of dynamite into wild fire, when even the last plant has lost water - dried up. The outcome is obvious, destruction, violent destructions. You see your delivery, but others experience the death, burnt and torn bodies, while no one actually is saved – the spread ensure no one can escape, no spot for the pilot to land!

But if you understand human nature, once a good, effective policy is conceived, the market confidence swing before the policy is fine tuned, approved, implemented. People start to move, faster, more decisively, than legislature, executive branches – when there is profit to make.

So the Fed and Treasuries, together with world leaders must improve not just their understanding of economy, also

the very purpose of their function – wealth creation
only wisdom will bring peaceful, progressive, prospering world

while brute force, foolishness
using wealth to destroy wealth creating engine
resulting in depression, retardation, poverty of even the richest


Choose the sections relevant to save the world from worse than WWII.

Dynamite Economy 3 Summary for Deadly Urgency
[1] “Real Economy, Realities of Economy, Economic Realities” April 2001, collected in “Cognose – Recover the Lost Key to Infinite Wisdom.” ISBN-9810-513757
[2] “Dynamite Economy” Aug 13, 2007, http://www.cts-ideas.com/G0813DynamiteEconomy.pdf
[3] Sep 9, 2007, after delivered above warnings, I have encouraged Steve Forbes, on a luncheon in Raffles Hotel, Singapore, that America must lead to create new industries.
[4] “Dynamite Economy - Proliferation, Wrong Solutions, Resolutions” , Nov 8, 2007 http://www.cts-ideas.com/G1108DynamiteEconomyProliferation.pdf

Dynamite Economy 3.1 Magnitude

Solvere, Cognose LIM Swee Keng (Sep 22, 2008)
www.cts-ideas.com tab Cognose.blogspot.com
Dynamite Economy 3 - Deadly Urgency
3.1 Magnitude

Within months, American injected, injecting in total exceeding US$905 billions just to save a few major financial corporations, while leaving numerous others behind, never mind about other industries, nations.

This sum is the size of
1. World 14th economy – GDP of 21 million (11million labor force) Australians in 2007; OR
2. 13,000 pieces of Boeing 737 (more than double Boeing has produced - 5,815 since 1968[1]); OR
3. 1.3 time total profit of 2008 Fortune Global 100, employed 22 million DIRECT workforce; OR
4. 22 times the budget of Beijing 2008, good for Olympic games right into next century.

The differences are:
1. the injections was within months compare to year, or decades of good hard work
2. even it may moderate the indebtedness of few, it does not improve, for even one entity, the very dire situation they are embroiled.
3. even it may delay a few hundred thousands job losses, it may not secure them in the long term, never mind about create a single job.
The mid to long term effect for improving economy, does not exist

This comparison is depressing.
The scale demand the world to unite together to resolve.
This represent we need superior wisdom, strong leadership to resolve.

America remains the leader, sole leader of new industry creation, economy leadership
Americans have to lead, to improve world economic situation

America, the most resource and market dependent nation
A world in strife has been proven not a wise choice
for the profit of the most powerful nation!


I shall provide the key motivation and causes analysis, AND solutions, supported by consistent, accurate, precise prediction, prescriptions made since 2001.[2]

[1] http://en.wikipedia.org/wiki/Boeing_737
[2] “Real Economy, Realities of Economy, Economic Realities” April 2001, collected in “Cognose – Recover the Lost Key to Infinite Wisdom.” ISBN-9810-513757

Dynamite Economy 3.2 Cognized before Happening

Solvere, Cognose LIM Swee Keng (Sep 22, 2008)
www.cts-ideas.com tab Cognose.blogspot.com
Dynamite Economy 3 - Deadly Urgency
3.2 Cognized before Happening

What we see today, have been forewarned, in 2001, to the leaders of Singapore and her technology leader, whom i expected to lead sovereign fund.[1] Stated clearly was that technology no longer able to drive economy, economy will hit stagnation. (Since then Technology companies, one by one, dropped out from top 10 listings. Today, 2008, even GE ranked 12.)

Technology cumulated wealth found no place to invest, interest rate will go into negative, which is pure fabrication - the impact will be unprecedented. War will take place (in a separate, now no longer sensitive submission – Afghan was identified as the first battle field.[2])

Aug 13, 2007,[3] witnessed the lack of understanding of economy by leaders – the fundamental driving forces for economy. Stated clearly, that among top corporations of the world, Finance and Energy overwhelmed the whole economy with revenue size (29%, 25%, total more than 50%), profit (41%, 31%, total almost 75%), AND profit margin of 9%. Banks being a lubricant for market economy, such profit margins can only be fabrication, cannot be sustained. (So by today, Sep 2008, a year latter, THREE out of top FIVE investment banks collapse.) Energy should be the cheapest among all key factors of productions. At such magnitude and profit margin, all business will not survive.

Sep 9, 2007, after delivered above warnings, I have encouraged Steve Forbes, on a luncheon in Raffles Hotel, Singapore, that America must lead to create new industries, “Energy Solvere”[4] was presented as one among a battery of eight new industries that will energize economy again. Also clearly stated that pumping well governed sovereign funds into free private hands to rescue banks, will spread turmoil from non-factor of production(financial instruments) to key factors of production (energy, commodities, grains).

Nov 12, 2007[5], after monitoring the scale of intervention from international sovereign funds, I stated clearly that together with other key factor of production, oil and gold will exceed $120 and $1000 respectively in a few months time. This will pull the carpet under all business’ survivals.

Gold hit $1000 on Mar 17, 2008. Oil hit $120 on May 5, 2008, manifestations of serious impact all around the world, including transport workers went on strikes, airlines cut operations. This testifies $120 is a critical point for most business survival. Oil peaked at $147 on Jul 11 2008, and dived to $94 today (Sept 17, 2008). Violent up and down swing prices may be, damages it has caused to world economy are definitely unprecedented, severe, the sufferings – long, prolonged.

[1] “Real Economy, Realities of Economy, Economic Realities” April 2001, collected in “Cognose – Recover the Lost Key to Infinite Wisdom.” ISBN-9810-513757
[2] Tracking the speeches of the Singapore leader, before Shanghai Communique, Mid 2001.
[3] “Dynamite Economy” Aug 13, 2007, http://www.cts-ideas.com/G0813DynamiteEconomy.pdf
[4] “Energy Solvere” www.cts-ideas.com, update on cognose.blogspot.com, is one among 8, will bring billions farmers into middle class, billionaires shall come!
[5] “Dynamite Economy - Proliferation, Wrong Solutions, Resolutions” , Nov 8, 2007 http://www.cts-ideas.com/G1108DynamiteEconomyProliferation.pdf

Dynamite Economy 3.3 What has Happened

Solvere, Cognose LIM Swee Keng (Sep 22, 2008)
www.cts-ideas.com tab Cognose.blogspot.com
Dynamite Economy 3 - Deadly Urgency
Dynamite Economy


Sep 17, 2008, within the last 50 hours, two out of four top investment banks AND one of world largest insurers collapsed. This is not the beginning, neither do we see a pause in sight. It is just a moment in a long sequence, a rapid sequence, a rapid sequence without a pause, a rapid sequence of Dynamites detonating, spare no country, spare no industry, spare no leaders, differentiate not poor or rich man, hurting every social fabric.

Within the last 100 days or so, fifth ranking investment banks together with two largest mortgage companies fallen. Oil prices hit the predicted mark of $120 on May 5, 2008, struggles for survival started to be felt around the world, strikes of transport workers, airlines cut operations are some indicators.

Even with such time window for rethinking, elaborate deliberation, free from official position, the former Federal Chairman, Allan Greenspan, both US Presidential candidates, only state what is already obvious to all – greatest disaster in 100 years, worse than The Great Depression, etc, without analysis, never mind about causes, impacts, solutions. The criterions for rescue considerations, were poorly uttered …..

From the following reports, we see that economists, bankers without basic understanding of market, economy, made wrong statement, almost all of the time, even late into events.

2007 March 14, “Subprime alone won't sink Wall Street bankers” “SUBPRIME CRASH: It may not be fatal, but it can be painful” USA Today, Lehman Bros, told investors during its quarterly earnings call that its exposure to such loans is minimal. That came a day after Goldman Sachs reported strong quarterly results despite any troubles in its subprime mortgage business.

2007 May 17, “Bernanke Believes Housing Mess Contained” Forbes reported.

2007 July 18, “Same Old Ben with a Dash of Subprime” Forbes reported Ben Bernanke concern subprime

What has becomes obvious are:
1. Three out of top five investment bankers already failed.
2. Immense sum of well governed sovereign funds that equivalent to the labor product of one full year of labor by 11 million Australian work force, or the highly skill to sell double the number of 737 jets since 1968, is going to poured into the market, without adding one jobs, without producing any goods and services.
3. Before this, smaller token of such injection, already escalated commodities prices to a level that pull the carpet under all business survival – Oil prices exceeded $120 that whole world felt physical choked.

Monday, September 22, 2008

Dynamite Economy 3.4 How Faults Initiate?

Solvere, Cognose LIM Swee Keng (Sep 22, 2008)
http://www.cts-ideas.com/ tab Cognose.blogspot.com
Dynamite Economy 3 - Deadly Urgency
3.4 How Faults Initiate?

No nation can function well without great leaders.
No economy can sustain without healthy fundamentals.

From Dynamite Economy 3.3 we know that:
Economists, without discern of the basics of economy, while tightly coupled to their doctrines
over stated their effectiveness, under-stated the problems !
This is the very problem, Economists who yearn to be key contributors to society
must admit, must improve, must overcome !!
Here they are:

It is when technological innovation reached a plateau, industrialization no longer able to drive economy. We need new engines for growth!

It is when industrialization cumulated an immense scale of wealth, no new, significant industry was invented, this wealth becomes over abundance, Over Abundance Wealth (OAW), just like a hyperactive strong man without meaningful employment, will inflict more severe damage than small babies, hungry men.
We need new industries!

When the size of integration of civilization changed from nations to global village,
nations cannot contain problem by themselves.
Nations need cooperation from others, every nation.
We need new realm of thinking!
None has happened, so seed of disaster buds, grew, destructing, devastating!!

Dynamite Economy3.5 Who is at Fault?

Solvere, Cognose LIM Swee Keng (Sep 22, 2008)
http://www.cts-ideas.com/ tab Cognose.blogspot.com
Dynamite Economy 3 - Deadly Urgency
3.5 Who is at Fault?

To resolve any issues, we must seek the causes.
For such unprecedented scale, unprecedented spread, as Dynamite Economy, we must also understand the very motivation forces that effected these causes into affecting whole world economy.

But the spread, magnitude determined that even there is a person, a group, an industry that is liable for this disaster, the greater environment allowed it to exist, propagate, proliferate, eventually almost everyone participated, so affected.

To assign fault to anyone, is so very easy, is definitely possible.
In this situation that demand unity, if we focus on fault assignment, will only divide the people, divert the resources.
We cannot afford it, can we?

Even everyone is at fault,
Even so,
we must objectively study every wrong move,
1. Not just the effect, but the broader, deeper impacts.
2. Not just the causes, but the immense motivation forces behind that bring these effects to cause series of over whelming failures.

Dynamite Economy 3.6 Wisdom from History

Solvere, Cognose LIM Swee Keng (Sep 22, 2008)
http://www.cts-ideas.com/ tab Cognose.blogspot.com
Dynamite Economy 3 - Deadly Urgency
3.6 Wisdom from History

Historically, when agrarian communes matured into feudal states, without necessary wisdom to drive economy, when power of communes become inadequate to survive, while organizing into feudal states was an experiment, great philosophical thinking came side by side with centuries of bloody conflicts.

Today, when the world has evolved from sovereign states into global village,
with borders fading away,

without learning from history, without philosophical depth,
we would easily repeat what those great philosophers failed to mitigate -
ceaseless blood flowing battle fields, of east, of west.

But we journeyed thousand years of journey,
we have integrated wisdom of west, of east, of intuition, of analysis.

We must prevent bloodshed, strife, even hardship, suffering from furthering,
while we gracefully migrate into a tightly integrated global commune.

The Great Depression, brought up only World War Two,
only a few states had mighty power,
only a few exceptional leaders can pull the triggers. A
nd they can be found guilty,
and in fact few war criminals were executed.

Dynamite Economy 3.7 Where can we be heading

Solvere, Cognose LIM Swee Keng (Sep 22, 2008)
http://www.cts-ideas.com/ tab Cognose.blogspot.com
Dynamite Economy 3 - Deadly Urgency
3.7 Where can we be heading

Today, with more powerful weapons, miniaturized, store in private bunkers belongs unknown.
Today, with connected world, some unknown can monitor, adulterate from a far, prices can be justified by mathematics model that pack junks and sell you for a good fortune, respectfully and legally. Most transactions, the only record is in one computer, which can be easily adulterated yet cannot be fully protected, audited.
Today, Globalized business made businessmen richer than nations, Lawyers smarter than legislators, bad management, misadventure, corporate failures, can demand support from nations.

The scale, spread of calamity, will be beyond World War II.

Sovereign Nations cannot act alone.
Just like post agrarian commune, while experimenting Feudal States was not ready to effectively govern. Great Philosophers came too late.

We need global cooperation, governance, yet Global Cooperation, Governance, Leadership are yet ready.

Without immediate action to create massive industries, to keep everyone bus
Without global order to manage businesses
The rapid escalation of immense wealth, brains power, fire power in free private hands
Will bring about unprecedented chaos

Compare to what can come, if we do not solve it, effectively now!
Barings, Enron, Societ General, WWII are just small plays!

Solutions, immediate, practical, this engineer, inventor, philosopher has prepared for nations with different situation.
Sharing this understanding, joining our wisdom and might
We shall carve, record the future into a happier history!

Dynamite Economy 3.8 Can Nations inject Sovereign Funds to rescue Enterprises?

Solvere, Cognose LIM Swee Keng (Sep 22, 2008)
http://www.cts-ideas.com/ tab Cognose.blogspot.com
Dynamite Economy 3 - Deadly Urgency
3.8 Can Nations inject Sovereign Funds to rescue Enterprises?

It is wrong, Why?
First, by injecting funds, does not change the dire situation this Enterprise is in.
Second, the whole world economy is in grave trouble, saving even all of Fortune 100 is not enough.
Third, injecting well governed funds to rescue, the effort is arduous, the effect of rescue is small,

the repercussion is shown here:

Sep 16, 2008 AIG, the biggest Insurance Group declared great losses, price drop from US$79 a year ago to $1.25. Not a world wide household name but a typical shrewd businessman, Oei Hong Leong bought 1 million share. The Fed gave a US$85b loan. The price escalated to $3.75 end of same day. Oei could easily move into his Free Private Hand more than double his original.
Immense money dispensed from Well Governed Sovereign Fund
Where they actually sink into?
How much money actually help the economy?
Where will myajory be used for?
Oei donated the shares to LKY School of Public Policy[1]

This solution is wrong, fundamentally wrong, so fundamental that injecting wealth into the market with Over Abundance Wealth, is as idiotic as injecting Sugar into Diabetics.

As pre-warned,[2],[3] by H1, 2008, after well governed sovereign funds, in smaller measure, were injected to rescue smaller failures, the impacted no longer limited to Non-factor of Production (financial instruments), Key-Factor of Production (energy, minerals, grains) sky-rocketed. It pulled the carpet of survival under all businesses.

With even small, initial injection of fund into Free Private Hand, has already overheated Energy, Commodities Prices!
The Carpet of survival for all Businesses, was pulled.

With such immense injection
we will be seeing Oil climbing up to $200 in few months time.

Which industries can survive?
How many employees will loss their livelihood?
With skills, brains, accesses, with earlier knowledge of failures, with no hope of next jobs
Major failures will come also from lawful slips, crimes, even for healthy organization.
Enron, Barings, Societ Generale will be child play overshadowed by more, bigger, countless fiasco?

Paralyze of world economy is a definite outcome!


[1] Lee Kuan Yew, Sep 16, 1923 - ; Founder of Singapore, among the contemporary of post anti-colonial era world leaders, led colonies , independent, THE ONLY who led progressed from Third World to First.
[2] “Dynamite Economy” Aug 8, 2007 http://www.cts-ideas.com/G0813DynamiteEconomy.pdf
[3] “Dynamite Economy - Proliferation, Wrong Solutions, Resolutions” Nov 12, 2007, http://www.cts-ideas.com/G1108DynamiteEconomyProliferation.pdf

Dynamite Economy 3.9 Key Characters of Correct Policy

Solvere, Cognose LIM Swee Keng (Sep 22, 2008)
http://www.cts-ideas.com/ tab Cognose.blogspot.com
Dynamite Economy 3 - Deadly Urgency
3.9 Key Characters of Correct Policy

Certainly there are many solutions, ineffective, many worsen problems, some caused fatality.

There is no perfect solution, with more cooperation, synergy among diverse strength-wisdom, new revelation shall come, all solutions shall be improved upon.

Characters for Correct Policy are:

  1. addressed the main causes,
  2. broad base employment,
  3. profitable, AND
  4. promote business efficiency, reach

In this case:
1. Immediate - Rejuvenate infrastructure[1], this
a) Mop up OAW in private hand
to invest in design, through to constructions, operations.
b) Create across the board, numerous jobs
c) Resulting in escalated demand,
especially for those on poverty line, the first job create a lot of anxious purchases.
d) Improved efficiency,
(i) integrate businesses,
(ii) reduce cost of business operations,
(iii) magnify economy of scale.[2] (US$ 900 billions can create a lot of activities, can employ more than 11 millions.)[3]

Market is not driven by what is physical, but by expectation.

Good policy will raise market confident even before it is approved,
long before it is implemented, effecting.
Bernanke think this process took too long is wrong!

2. Mid Term - create new industries that will employ Billions for real value-adding activities.[4]

3. Outcome - Trillionaires shall come before 2016.[5]

Successful policy is not one by reacting, but by leading appropriate changes.

Great Successes, Satisfaction are not for followers of situation
but for leaders that improve situation.

Effective policies are not one by reacting, but by leading appropriate changes.
Successful policies are those that change the greater environment to facilitate businesses.

This is not a few Billions dollar corporate, but Billions of OAW, Brains & Labors!

This is a problem that Sovereign Nations need Global Cooperation to overcome!
Leader who leads cooperation
will be THE Leader that bring about new stage of Civilization!!

[1] This was proposed to McCaine campaign, Jan 18, 2008. Huckebee used it, Ben Bernanke first think it takes too long, latter included in his plan.
[2] To know the only constant is change is feeble. “The ONLY constant change in Civilization is to INTEGRATE greater number, from greater diversities, deeper, broader, faster, more frequently”, Solvere, @Globalpolis, 2006. Transport, Communication are the key for integration, to gain economy of scale, to synergy ideas, to multiply strength. Historically, all key economy are about integration, from river transport, horse carriage, ocean sailing, rail way, auto-car, radio, telephony, computer with network, banking with network, while medicine though is key, “Aimless to Win” ISBN 9810 579043
[3] “Dynamite Economy 3.1 Magnitude” http://www.cts-ideas.com/ tab cognose.blogspot.com
[4] “Energy Solvere” http://www.cts-ideas.com/, update on cognose.blogspot.com, is one among 8, will bring billions farmers into middle class, billionaires shall come!
[5] 1916 Rockerfellar became first billionaire in History.

Dynamite Economy 3.10 Importance of Human Motivation

Solvere, Cognose LIM Swee Keng (Sep 22, 2008)
http://www.cts-ideas.com/ tab Cognose.blogspot.com
Dynamite Economy 3 - Deadly Urgency
3.10 Importance of Human Motivation

Late 90s, Economists discussed about the situation when interest rate zero bound[1],[2]. They cannot imagine interest rate can go negative, because they understood very well number, busy with building models, they do not respect the nature of human.

In fact, as early as 1970s, holding Swiss Franc was an attractive option. Foreigners were given negative interest rate to hold this privileged currency.

January 24, 2003, Friday, normal Japanese domestic interest rates went negative. Banks lent money on that night and accepted back a smaller amount on Monday morning. Banks have too much money from the mighty works of Morita-Matsushita generation. Cheap money overshadowed the reality – dearth of real wealth creating engines for investing, economy definitely stagnated, Japan lost her eminence, economy remain at the valley for almost a decade now.

If we understand nature of human, these are not only reasonable acts, these acts indeed are predictable, from the basic instincts of investors’ unpretentious positioning to reduce losses, to multiply profits.

If we look at only number, without satisfying human's nature of profit seeking, without invigorating the economy, how can present severe, complex problems be addressed correctly, even partially?
Will not partial anesthesia impair progressive movement?
Will not cosmetic surgery weaken the patients?
Will not incorrect solutions bring more harm?


To avoid the worse than WWII from unfolding
we need to solve this deadly urgent problem!

To solve this complex, deadly urgent problem with certainty, effectiveness, efficiency,
We need to satisfy the nature of human, even seemingly insatiable!


[1] “Three Lessons for Monetary Policy in a Low Inflation Era” September 1999, David Reifschneider and John C. Williams, Board of Governors of the Federal Reserve System, Washington, DC 20551, david.l.reifschneider@frb.gov jwilliams@frb.gov
[2] “Price Stability and Monetary Policy Eectiveness when Nominal Interest Rates are Bounded at Zero” June 1998, Athanasios Orphanides and Volker Wieland, Board of Governors of the Federal Reserve System.

Dynamite Economy 3.11 Approach - Finance Industry

Solvere, Cognose LIM Swee Keng (Sep 22, 2008)
http://www.cts-ideas.com/ tab Cognose.blogspot.com
Dynamite Economy 3 - Deadly Urgency
3.11 Approach - Finance Industry

Banks are lubricants for market economy.
Banks shall not, can never be wealth creator.

It was clearly stated in Aug 2007, that Banks making 9% profit over weak economy that barely made 1% profit is unsustainable. The big profit is through instruments, then sub-prime instruments.[1]

All the Top 5 Investment Banks has since faced the realities, except the top two still able to resist, the rest collapsed.

When there are OAW in banks clients’ pocket, the temptation is so high.
So they pretend they are wealth creator, these are fabrications, fabrication cannot be really fulfilled
Banks shoulder upon themselves promises they can never fulfill.
So dreamers’ hearts broken, banks bankrupting.
Rules of law are last resort, is late, it can be applied only after grave harm is inflicted.

Greed for profit is human nature, trying to ignore, using money to feed, law to control are feeble.
Salvaging is too late, too costly, usually the result is decimation of wealth.
So to satisfy temptation is the most important for design, for regulation.
Successful application will improve social order, for economic stability.

Banks should be divided into two categories:
First, Banks as they are remain as a conduit, a lubricant, continuously improving effectiveness, efficiency for capital formation, capital flow in the market. This category subjected to lower return, tight governance, and government backing.

Second, Investment Characters. These are avenues for higher return, naturally coupled with higher risk. No one should bank on it for survival, emergency. So they should not be called banks. The coupling of the secured character of banks with the promises of high return investment led to overwhelming popularity. Just like most euphoria, eventually brought about today’s disaster. By calling themselves Investment Characters, they make everyone aware the nature, the character of such investment – taking high risk may be rewarded handsomely. Investors take their own risk – “caveat emptor”. When it fails, there is no embankment to protect against the onslaught of storm.

The creation of this category is so very important for channeling excess capital back to the market. These are excess liquidity that is not survival critical. Failures in venture shall not be supported by government. Since they are not survival critical, the impact of failures will not affect the economy at large, surely not national stabilities, global orderliness.

US government chose to support Insurance and not Investment Banks is one great improvement in understanding, despite inadequate one, too late.

Finance Industries is not the only industry that needs this segregation, philosophical segregation.

In face of OAW, Medical cares, Education, Insurances also need such differentiating approach to differentiating for the survival essential and the comfort, pampering of the overly-endowed.

We shall divide Cosmetic Care from Essential Medical Care; Enjoyment Institutions from Scholastic pursuits, Basic Education; Wealth Protection Insurance from Disability, Retirement Pension.

With this approach, the governance of such institutions is made easier:
1. Aggregating to achieve economy of scale, in training, in facilities, in expertise.
2. Segmentation to provide premium products,
3. Dispensing of public subsidies, canvassing for support can be appropriately managed, scaled.

This is the wisdom derived from the great Western culture. Western strict disciplines, strict discipline of research brought about today’s leadership in the world, in science, in technology, in financial institutions.

Even a simple, singular transaction, we need to enter twice, one left, one right, one credit, one debit, to ensure there is accountability, accounting trails, mistakes minimized.

Even Black & Shore inspired many, very complex, very precise models, none can stand to the very basic requirements of strict science – cause and effect, measurable and repeatable. Forgotten the Western Strict Discipline in research, this cancer was allowed to grow under the eyelids of the best of Finance Industries for almost a decade, led to the collapse of world finance industries and repercussion spread through out the world.

Without addressing it now, it may bring about worse than Great Depression & World War II.


To ensure a stable, progressive, efficient economy, strict discipline in managing the essential is essential to survival, if not social serenity, if not transaction efficacy, efficiency, world order.

Every one yearn for freedom, full freedom of expression, full spectrum of fabrications, not limiting to Collaterals, Derivatives, Options, Free- willing Valuation. When one is such given, one must shoulder his own risks, and cannot count on others to bear the blunder, just like no one is entitled to taking a slice away from the pie, when it is ready, when it is tasty. This again is Western Strict Discipline of Transparency, then Accountability.

This two-prone approach provides solutions that satisfy seemingly mutually exclusive requirements –
highly secured vault for essential liquidity AND infinite free flowing cannels for excessive capital

together they shall ensure the spirit of free market principal and social good order –
Basic, critical capital flows efficiently, reliably.
no capital is stashed away from the economy
no creativities is stifled
no naive lost his sole piggy bank.

It is darkness that bring us cherish the sunrise.
It is strict disciplines that provide us the basic securities, so that we can venture beyond, venture freely, venture for high profits – even reach the unreachable stars, dreams the unrealizable dreams.

It is only when the society can provide everyone with basic securities, that society can be safe, stable, progressing.

The rich, the powerful, are the most vulnerable, in a society that is full of strife, conflicts, unemployment.
Why should they not support such categorization?


[1] “Dynamite Economy” Aug 8, 2007 http://www.cts-ideas.com/G0813DynamiteEconomy.pdf

Dynamite Economy 3.12 Approach – Essential Commodities

Solvere, Cognose LIM Swee Keng (Sep 22, 2008)
http://www.cts-ideas.com/ tab Cognose.blogspot.com
Dynamite Economy 3 - Deadly Urgency
3.12 Approach – Essential Commodities

The values of commodities cannot multiply over a short span of months, yet their prices did.

This is only possible because Prices detached from Real Values.

If we examine carefully, deeper, it becomes clear that the real supply and demand of commodities, especially with immense stockpile by nations, cannot swing violently within short period, yet the prices of energy, metals, grains etc commodities did.

This is only possible because Purchases independent from Actual Demand.

Demand cannot swing so much. Other than those resources really need for real operations, who would purchase something higher than its real values?

Speculations - especially those who are well endowed with OAW, who found no place to park their liquidity will speculate, were speculating.

It is because after the injection of well governed sovereign wealth into free private hands, the scale of OAW available for trading in commodity market is multiplied, become significant, adequate to SIGNIFICANTLY INFLUENCE prices, faster, more effective, effective in inflicting bigger effects, unprecedented swings these are witnessed only after governments dispensed huge sum to intervened in Sub-primes.[1]

The whole world is tightly connected, integrated.
If commodities need to be physically transacted-delivered, the price would not swing so violently.
Commodity traders in fact devised futures, on top of other instruments, to facilitate immediate, easy, many unwarranted, transactions.

The operations of such markets, are they essential to Free Market operations, Free Market objectives?
If free market means the linkage of suppliers and consumers in the most effective, efficient manner -
Does these markets improve efficiency, or hinder transactions, multiply agency cost?
This hurts the real suppliers, the real consumers, which eventually passed on the losses to the economy.
This is agencies theory, but in this case, the agents are performing transactions without real supply nor actual demand.

They are not even agents, merely interfering parties who has no interest in the real commodities.


There will be no urgencies for governments to intervene, if the impact is small, short-lived.
But the impacts become real, severe, stark.
if all traders are likely to make great profit
The inertia to accept change, regulation will be formidable

But with such gloomy economy, without recovery insight
would traders not want to bail out?

From governments, international regulatory bodies
it is the best window to get the support of traders!!


[1] Sep 16, AIG, the biggest Insurance Group declared great losses, price drop from US$79 a year ago to $1.25. Not a world renowned tycoon, Oei Hong Leong bought 1 million share. The Fed gave a US$85b loan. The price escalated to $3.75 end of same day. Oei could easily move into his Free Private Hand more than double his original.

How much money moved from Well Governed Sovereign Fund actually help the economy?
Oei donated the shares to LKY School of Public Policy
This also demonstrated that market move with expectation than real impact manifested!

Dynamite Economy 3.99 Deadly Urgency

Solvere, Cognose LIM Swee Keng (Sep 22, 2008)
http://www.cts-ideas.com/ tab Cognose.blogspot.com
Dynamite Economy 3 - Deadly Urgency
3.99 Deadly Urgency

Today is not about saving a few fallen giants.
It is about whole economy, whole global orders, to help the Over Abundance Wealth (OAW), cumulated over technology era, find profitable investments.

Injecting Well Governed Sovereign Funds into Free Private Hands, not only will not save a single corporate, it has already sky-rocket all key factors of productions, suffocating all businesses.

We cannot wish the brutality of Great Depression, WWII away, today, with more powerful weapon miniaturized, filling private bunkers, with mighty instruments sink good money into junks, the brutality will be beyond WWII, physical, financial. Worse, those who can inflict such catastrophe, are no longer nations leaders bound by laws, but by numerous faceless, nameless unknown, leaders, operators.


With present scale of injection
Oil will hit $200 in few months
All businesses will be suffocated!
Skillful frauds, penetrating at all level, all transactions, every computer!
not few companies, but Industries collapse AND Governments topple!

Putting intelligent brains, restless muscles onto the streets, the most at risk, even profitable companies will be exploited, beyond trains/banks robberies, massive frauds in paperless transactions.

The most brutally tormented will be the rich, the powerful and their vulnerable children.

All effort must try to mop up wealth held in Free Private Hands, through exchanges with longer term bonds. Promising higher yield in the long term is better, much better than promoting, accelerating market disarrays, promote detonations of Dynamites, in stock markets, all industries, whole world.

All investment must be done, to rejuvenate infrastructures, which need only matured technology.
This is to engage to full capacities of OAW, all brains to device more efficient design, to exhaust all muscles to construct.

Eventually, all businesses profit from more efficient greater environment, profit from multiplier effect,.

All research must be to develop new, more efficient, healthier, natural sources of agriculture for human food.[1] Fully use, cascading usage from roots to seeds, from desert thorns to water algae, for animal, industrial feedstock, for packaging and construction material. Only the waste be used for energy generations.
From same plot of land, same investment, farmers multiply their income –


Billions farmers shall enter middle class
Millions engineers, Factory workers invent, build new processing machines
Trillionaires shall come!!

All work, especially research, finance, banking must subject to tight discipline beyond transparency, accountabilities, also strict scientific reasoning of cause and effects.

Selling freedom, ignore the precious jewel in western cultures - strict disciplines, rigorous scientific cause and effect reasoning, measurable and repeatable evaluation, have brought the world away from efficient mass production factories that brought about billionaires, but unprecedented disaster that profit no one.

It is only such grave catastrophe, will bring the world back to reality, of responsible actions
Integrated world, cooperative progressing will be the next phase of civilization –

Post Industrialization Renaissance!!


[1] “Energy Solvere” http://www.cts-ideas.com/, update on cognose.blogspot.com, is one among 8, will bring billions farmers into middle class, billionaires shall come!

Thursday, September 18, 2008

From First to ? - Water Resource

Sea Water:

Kranji Reservoir:

Minister of Water Resource, can you enlighten me the rich green in Kranji Reservoirs taken on Sep 18, 2008 at 1700 hours compare to the sea water outside.

From First to ?

This is not a feedback or complain passage.


but from one Cognize before Happening and Provide Solutions beyond Root Causes.


Lee Kuan Yew, my respected, as well as may be the most respected contemprorary leader, who bring strict self-discipline to first himself, then to this citizentry, and bring us from third to first.


Even we have many strong foundations, they are eroding away, by bags of tricks up sleeves, by pole dancing and bar top dancing that can save our entertainment business, by many claims that bring us less than even illusions.


here i shall move from providing insight, foresight behind the scene, to work with all with full commit, so that the cadres of PAP, the civil servants can appreciate the deep wisdom our founding generation dispensed to bring us here.


First, please for all Member of Parliament, please do not call yourself Advisor to grass root organization. You are elected to serve, change your title to Person Fully Responsible PFR.


Second, all civil servants, reach to your heart, and find some self-respect, you have wisdom if your put your decision to the ground and test, put your failures to seek root causes, put your successes to further simplify the solutions, concise the answers, integrate more solutions to solve more with less, just like computer design, the better, faster is cheaper, smaller, faster, use less energy, and do more work. You can be better than the best Ang Mo in many way than one.


Third, Chief of Civil Services, please review through the last batch of super scale, who say they can get more pay from being a Investment Bankers, even they cannot have good foresight, they do not understand banking businesses, they must have realise working with PAP is more rewarding after seeing ALL the FOUR top investment bankers lost great deal, money and reputation.


With this certainly we will move from first to be one best sought after models by the whole world.


None of us, Politicians PAP and Opposition, Top Civil Servants and front Desk as well as those who are yet civilized have the right to fail the founder, the founding generation.



The world is facing greatest challenge, our founder is no longer so very young.
We have no place to migrate to, just look at Chen Sui Bian, just look at our foreign talent construction workers, if you fail, we will be dog everywhere we go.
Time is runing out, your Minister of Environment and Water Resource, Chief of EDB must testify that timing i know very well.


Read aloud to yourself

I, your name, shall commit myself to make Singapore from First to the Best place to live for ourselves, our family.


Solvere shall you call me from this time forth