Labour pain and power shortage

 Penang's high-technology dreams hit by double whammy

THE evolution of the technology sector into a veritable hub that supports a variety of high-technology industries has hit a snag, prompting both the federal and state governments to race against time to clear the obstacle.

Known as the “Silicon Valley” owing to the establishment of US-based semiconductors companies such as Intel, AMD, and Fairchild Semconductor in the 1970s, Penang’s technological hub is now facing a shortage of workers and recurring power disruptions.

Having evolved from its semiconductor mould in the 1990s, the Silicon Valley has branched out to provide support for other technology industries in the light-emitting diodes, medical devices, aerospace, automation, and test and measurement devices sectors.

In an interview, Penang Chief Minister Lim Guan Eng says that besides the scarcity of land, human resource is another constraint for Penang, as newly-promoted sectors - such as shared services and business processed outsourcing (BPO) activities — require large numbers of skilled workers such as engineers, scientists and accountants.

“Penang cannot produce sufficient numbers to cater to these requirements. We need to train and retrain new and existing human resources as well as attract new talents,” says Lim.

Last September, Lim said the state was unable to supply 1,000 engineers which had resulted in Penang losing some US$3bil in investments.

Penang Free Industrial Zone Companies’ Association president Horst Rosenmueller says about five years ago, the investments that poured into the state became more involved in product development and designing, and complex manufacturing activities.

“This led to a greater demand for higher skilled workers and more operators. At both levels, we are experiencing a severe shortage of employees, which poses a challenge to expansion and potential investments, should the problem persists,” he says.

Penang Foundry & Engineering Industries Association president Datuk Ng Chai Eng says the Federal Government lacks an understanding on the needs of the electronics sector.

“That is why the engineers that the education system is producing do not meet the needs of the industry. There are many local technicians and engineers today who can’t handle new range of computer numerical control (CNC) machines with more than five axes,” he says.

(A five-axis CNC machine refers to the ability of the machine to move a part or tool on five different axes simultaneously.)

 

The Penang’s ‘Silicon Valley’.

Regular disruption 

The problem is not to be taken lightly. Driving home this point is Pentamaster Corp Bhd executive chairman C.B. Chuah who recently said that the lack of skilled engineers would eventually sound the death knell of the automated equipment manufacturing industry in Penang.

“China will overtake us in the automated equipment segment in two to three years because it has better engineers who can produce innovative equipment that are cost-effective to manufacture,” he says.

Last April, Institute of Engineers Malaysia president Professor Datuk Chuah Hean Teik had noted that Malaysia was facing a shortage of engineers, which would impede the country’s development.

He says there is a need to train more engineers before the situation becomes critical, adding that the country will need about 200,000 engineers by 2020. “Currently, there are only 60,000 engineers in the country. We should plan ahead and not wait until there is an acute shortage.”

Besides the labour-shortage problem, there is also the recurrence of regular power disruption in Penang’s technology hub.

Rosenmueller says many of the companies here experience power disruption at least once a month.

“The power disruption may not be long in duration, but it delays the production process and increases wastage, as the machine and the production line have to be re-started,” he says, adding that Penang will lose out in foreign direct investments from Japan if the manpower shortage faced by the manufacturing sector prolongs and energy supply disruptions by Tenaga Nasional Bhd (TNB) are not resolved.

Due to the global recession, the State Government had a total of only 104 projects with investments totalling RM2.17bil last year, RM1.45bil of which came from overseas. In 2008, total investments brought in RM10.2bil.

“From the 104 projects, 61 were new projects totalling RM1.37bil while 43 were expansion or diversification investments with RM796.9mil.

“The projects approved were expected to create potential employment for 8,696 people,” he says.

Despite the labour shortage, the state’s electronics and electrical sector recorded the highest investment approved in 2009 with RM608.29mil for 30 projects.

The chemical products and test and measurement equipment industries registered the second and third highest with RM445.40mil and RM303.52mil respectively. The state’s gross domestic product has grown from approximately RM1.3bil in 1970 to RM21bil to date. This increase is largely due to the expanding manufacturing sector that now accounts for 39% of Penang’s economy, with the services sector contributing 57%.

Penang has now 1,427 companies, of which 227 are multi-national corporations employing 202,000 workers, where 50% of them are in the electrical and electronics industry. Penang contributes nearly 25% to Malaysia’s imports and exports both in value and volume.

Seeking a solution

To tackle the skills-shortage woes, the recently-formed Penang Skills Development Centre (PSDC) has asked for RM55mil funds under the 10th Malaysian Plan to establish a programme for diploma and degree holders to acquire the hard and soft skills in engineering in the shortest time possible via a finishing school concept.

PSDC chief executive officer Datuk Boonler Somchit says engineers need to be trained for one to two years to become productive.

“This means the companies that provide such training to the fresh graduates during this period will lose productive work. There is a need to formalise a system for graduates to acquire fast-tracked training and experience in six to eight months,” he says.

“The PSC will provide children mentoring on how to make scientific and technological ideas commercially viable,” Lim says, adding that the state has also set aside a 200-acre land in Balik Pulau for an education hub to woo investments from the private sector to build schools to produce the next generation of knowledge labour.

“We believe we can turn Penang into a showcase for silicon and software valley of Malaysia eventually becoming both a sweat-shop of the manufacturing industry and a smart-shop of the services industry,” he says.

On the problem of regular power disruptions, Lim says he will seek a meeting between all parties, including the top management of TNB.

New direction 


Due to scarcity of land, the State Government is also keen to attract high-end technology businesses involved in research and development which require relatively smaller land space or built-up space. However, these companies need to meet the requirement of providing world-class services, adhere to international safety standards and have exposure to a wide market.

BPO fits well into this. It is noteworthy that last year, hard-disk maker Seagate, test and measurement devices manufacturer National Instruments, and broadband communications and storage semiconductors provider PMC-Sierra Inc established their BPO and intellectual property headquarters at the RM100mil SunTech Tower in Bayan Lepas.

A report last year entitled “Exploring Global Frontiers” by KPMG pointed out that Penang was among the 31 sites in the world that could become alternative BPO centres to established Indian cities. The credit crisis had resulted in a new rush for outsourcing services and a number of new locations were emerging as viable BPO hubs, according to the report.

Penang’s strength as a BPO hub has attracted MNCs such as Intel, Dell, Motorola, Citicorp and IBM to set up such centres in Penang.

Besides BPO companies, the State Government’s aim to bring in high-value activities has led to internationally-known companies such as National Instruments (NI), Rubicon Inc, B. Braun, and Symmetry Medical to set up or expand their research and development activities.

NI (Penang) managing director Rajesh Purushothaman says it will develop its products from concept to be released in Penang, which include the hardware, software and firmware. “This is very similar to what we do in our research and development centre in Austin, US.”

Illinois-based Rubicon Technology Inc is setting up a state-of-the-art LED operation in the Prai Industrial Estate to perform a high-end manufacturing process known as post-crystal growth processing.

B. Braun is also investing about RM500mil to expand its research and development and manufacturing facilities at its plant in Bayan Lepas to undertake R&D activities in nano technology, information technology and digitalisation to improve its medical products such as needles.

Meanwhile, US-based Symmetry Medical Inc, the world’s largest orthopaedic product outsourcing firm, also plans to invest RM30mil over the next two years for the design and development of medical devices for the endoscopy industry.

By DAVID TAN
davidtan@thestar.com.my

EC president: Greece bailout will stop spillover

 Barroso says China remains confident in the euro

BEIJING: A multi-billion-euro aid package for Greece will be hammered out within days and the bailout will prevent the crisis from spilling over to other countries, European Commission president Jose Manuel Barroso said yesterday.

Speaking to reporters in Beijing, Barroso said he had discussed Greece’s troubles in meetings with Chinese Premier Wen Jiabao and that China remained confident in the euro even as sovereign debt worries ripple across Europe.

“I don’t think that China is lacking confidence in the European Union (EU) or the euro, on the contrary,” he said.

He also said Chinese leaders “never mentioned” any possible aid for Athens. Reports that Greece would sell bonds to China spurred market optimism earlier this year, but the Greek government subsequently denied there was any deal in place.

 

Visitors look at an art work featuring a projection of a Chinese renminbi note with a talking Mao Zedong at a gallery in Beijing. The Chinese currency has steadily appreciated against the euro since the end of last year.— AP

 

International Monetary Fund (IMF), European Union (EU) and European Central Bank officials are in Athens to negotiate the bailout and hope to wrap up a deal within days in an effort to avoid a debt default in Greece that could sink other fragile EU countries.

Barroso said they were “making solid, rapid progress” in drawing up the rescue package, reiterating that debt restructuring was not on option for Greece.

He also said the aid deal “will prevent further possible effects” of the crisis from spreading within the EU.
German politicians have said the aid package could be worth 100 billion-120 billion euros over three years, against an original plan for 45 billion euros of aid in 2010.

Greece has readied severe austerity measures demanded as a condition for the aid, providing relief to financial markets but drawing threats from unions of a mighty battle to come.

Union officials said the IMF asked Athens to raise sales taxes, scrap bonuses amounting to two extra months pay in the public sector, and accept a three-year pay freeze.

Greece’s debt woes served as a reminder of the need to address economic imbalances both inside and beyond Europe, Barroso said.

In the past, EU leaders have pointed their fingers at an undervalued yuan as a source of global imbalances, fuelling China’s massive trade surplus with Europe. But Barroso had a softer tone in public, at least after his latest round of meetings in Beijing.

“We are not putting pressure on anybody,” he said.

He added that it was natural that “the main global players discuss these issues of global imbalances, because we need to have a common approach, we need to restore growth globally.”

China had “clearly understood” EU’s message on currencies, Barroso said.

Beijing has effectively pegged the yuan at about 6.83 to the dollar since mid-2008, trying to cushion its exporters from the global economic downturn.

Tracking the dollar’s movements, the Chinese currency has steadily appreciated against the euro since the end of last year. — Reuters

Why Greece Will Default?

CAMBRIDGE – Greece will default on its national debt. That default will be due in large part to its membership in the European Monetary Union. If it were not part of the euro system, Greece might not have gotten into its current predicament and, even if it had gotten into its current predicament, it could have avoided the need to default.

Greece’s default on its national debt need not mean an explicit refusal to make principal and interest payments when they come due. More likely would be an IMF-organized restructuring of the existing debt, swapping new bonds with lower principal and interest for existing bonds.

Or it could be a “soft default” in which Greece unilaterally services its existing debt with new debt rather than paying in cash. But, whatever form the default takes, the current owners of Greek debt will get less than the full amount that they are now owed.

The only way that Greece could avoid a default would be by cutting its future annual budget deficits to a level that foreign and domestic investors would be willing to finance on a voluntary basis. At a minimum, that would mean reducing the deficit to a level that stops the rise in the debt-to-GDP ratio.

To achieve that, the current deficit of 14% of GDP would have to fall to 5% of GDP or less. But to bring the debt-to-GDP ratio to the 60% level prescribed by the Maastricht Treaty would require reducing the annual budget deficit to just 3% of GDP – the goal that the eurozone’s finance ministers have said that Greece must achieve by 2012.

Reducing the budget deficit by 10% of GDP would mean an enormous cut in government spending or a dramatic rise in tax revenue – or, more likely, both. Quite apart from the political difficulty of achieving this would be the very serious adverse effect on aggregate domestic demand, and therefore on production and employment. Greece’s unemployment rate already is 10%, and its GDP is already expected to fall at an annual rate of more than 4%, pushing joblessness even higher.

Depressing economic activity further through higher taxes and reduced government spending would cause offsetting reductions in tax revenue and offsetting increases in transfer payments to the unemployed. So every planned euro of deficit reduction delivers less than a euro of actual deficit reduction. That means that planned tax increases and cuts in basic government spending would have to be even larger than 10% of GDP in order to achieve a 3%-of-GDP budget deficit.

There simply is no way around the arithmetic implied by the scale of deficit reduction and the accompanying economic decline: Greece’s default on its debt is inevitable.

Greece might have been able to avoid that outcome if it were not in the eurozone. If Greece still had its own currency, the authorities could devalue it while tightening fiscal policy. A devalued currency would increase exports and would cause Greek households and firms to substitute domestic products for imported goods. The increased demand for Greek goods and services would raise Greece’s GDP, increasing tax revenue and reducing transfer payments. In short, fiscal consolidation would be both easier and less painful if Greece had its own monetary policy.

Greece’s membership in the eurozone was also a principal cause of its current large budget deficit. Because Greece has not had its own currency for more than a decade, there has been no market signal to warn Greece that its debt was growing unacceptably large.

If Greece had remained outside the eurozone and retained the drachma, the large increased supply of Greek bonds would cause the drachma to decline and the interest rate on the bonds to rise. But, because Greek euro bonds were regarded as a close substitute for other countries’ euro bonds, the interest rate on Greek bonds did not rise as Greece increased its borrowing – until the market began to fear a possible default.

The substantial surge in the interest rate on Greek bonds relative to German bonds in the past few weeks shows that the market now regards such a default as increasingly likely. The combination of credits from the other eurozone countries and lending by the IMF may provide enough liquidity to stave off default for a while. In exchange for this liquidity support, Greece will be forced to accept painful fiscal tightening and falling GDP.

In the end, Greece, the eurozone’s other members, and Greece’s creditors will have to accept that the country is insolvent and cannot service its existing debt. At that point, Greece will default.

Copyright: Project Syndicate, 2010.
www.project-syndicate.org , Martin Feldstein Copyright: Project Syndicate

The Greatest Show on Earth

Open Hearings in US reveal the degree of greed and fraud on Wall Street
Investment banks such as Goldman Sachs were self-interested promoters of risky and complicated financial schemes that helped trigger the crisis, said senator Carl Levin

Ladies and gentlemen,

Allow me to present the Greatest Show on Earth or How Wall Street brought the Financial Crisis on Itself. There is a cast of thousands, from the most famous to the most guilty. Never have so few made so much money from so many.

See how god’s bankers say: “Of course we didn’t dodge the mortgage mess. We lost money, then made more than we lost because of shorts.” Of course they are god’s bankers – they make money on the way up and make money on the way down.

See how the Financial Crisis Inquiry Commission (FCIC) and the US Senate Subcommittee Investigating Financial Crisis summon almost every week the stars from Wall Street to show how they did it.

The Senate subcommittee chairman, Democratic Senator Carl Levin, said: “Investment banks such as Goldman Sachs were not simply market-makers, they were self-interested promoters of risky and complicated financial schemes that helped trigger the crisis.

“They bundled toxic mortgages into complex financial instruments, got the credit rating agencies to label them as AAA securities, and sold them to investors, magnifying and spreading risk throughout the financial system, and all too often betting against the instruments they sold and profiting at the expense of their clients.”

 

Senator Carl Levin holds up paperwork while questioning a Goldman Sachs official. — Reuters

 

Goldman Sachs’ 2009 annual report stated that the firm “did not generate enormous net revenues by betting against residential-related products.” Levin said: “These emails show that, in fact, Goldman made a lot of money by betting against the mortgage market.”

We must admire the United States for its high level of transparency and its willingness to go after the big guns. What these open hearings reveal is the degree of greed and fraud that Wall Street has perpetrated against the whole world in its pursuit of ever-growing profits.

Investors used to listen to these gods pontificate on the trend of the market and now realise that with proprietary trading, these gods are talking one book and trading also the other way. So if you believed them and bought the market up, they were probably selling the market down. This is known as “risk hedging”, but guess who pays when the market crashes?

The taxpayer bails the investment banks out and they are still laughing all the way to their golden bonuses.
April is the cruelest month, especially for Wall Street.

On April 7, the FCIC looked into the securitisation mess, beginning with the testimony of former Federal Reserve chairman Alan Greenspan. On April 13, the Senate subcommittee started the first of four major enquiries, which “examined how US financial institutions turned to high-risk lending strategies to earn quick profits, dumping hundreds of billions of dollars in toxic mortgages into the financial system, like polluters dumping poison upstream in a river.”

Coincidentally, on the same day, the Securities and Exchange Commission charged Goldman Sachs of fraud.

In the second hearing on April 16 on the role of the regulators, the subcommittee “showed how regulators saw what was going on, understood the risk, but sat on their hands or fought each other rather than stand up to the banks profiting from the pollution. Those toxic mortgages were scooped up by Wall Street firms that bottled them in complex financial instruments, and turned to the credit rating agencies to get a label declaring them to be safe, low-risk, investment grade securities.”

The third hearing on April 23 looked at the role of the credit rating agencies and the fourth hearing on April 27 considered the role of the investment bankers.

On hindsight, it was remarkable that the Wall Street bankers, who always had a good grip on what was happening in Washington, had clearly underestimated the public anger against them and their vulnerability.

The session on the credit rating agencies was most illuminating. There are three major rating agencies in the world that do most of the global credit rating business – Moody’s, Standard & Poor’s and Fitch. Most investors rely on the credit rating agencies to assess the quality of their investments, particularly bonds.

With the arrival of Basel bank supervision rules in the 1980s, bank regulators also use credit ratings to assess whether the capital-risk weights are appropriate. Thus, if a bank were to hold junk bonds, then the capital requirements would be higher. Of course, pension and money market funds use the credit ratings to distinguish between safe and risky investments.

The result is that having a AAA credit rating was very helpful to borrowing at cheap rates, whereas a downgrade would not only increase the cost of funds, but also cut off liquidity as investors dump the securities and refuse to hold such downgraded debt.

In the last 10 years, the three biggest credit rating agencies gave AAA ratings to the residential mortgage backed securities, or RMBS, and collateralised debt obligations, or CDOs that fuelled the derivative market bubble. Between 2002 and 2007, these agencies doubled their revenues, from less than US$3bil to over US$6bil per year. Between 2000 and 2006, investment banks underwrote nearly US$2 trillion in mortgage-backed securities, US$435bil or 36% of which were backed by subprime mortgages.

At the heart of the problem is the inherent conflict of interest of the credit rating agencies, because they charged fees for a “public good service”. The Senate subcommittee called this “like one of the parties in court paying the judge’s salary, or one of the teams in a competition paying the salary of the referee.”

The investors thought that they were buying super-safe securities rated AAA. But in reality, 91% of the AAA subprime RMBS issued in 2007, and 93% of those issued in 2006, have since been downgraded to junk status. It was the collapse of confidence in the ratings, which led to the withdrawal of liquidity in the market that triggered the meltdown in 2008.

This is only the beginning of the dirt that is coming out of Wall Street. The show will continue.

THINK ASIAN
By ANDREW SHENG

 ● Datuk Seri Panglima Andrew Sheng is adjunct professor at Universiti Malaya, Kuala Lumpur, and Tsinghua University, Beijing. He has served in key positions at Bank Negara, the Hong Kong Monetary Authority and the Hong Kong Securities and Futures Commission, and is currently a member of Malaysia’s National Economic Advisory Council. He is the author of the book From Asian to Global Financial Crisis.

The customer is no longer king

It seemed to me Goldman Sachs had forgotten the first rule of business stated by the late management guru, Peter Drucker

The Goldman Sachs fiasco should remind businesses the purpose of their existence

Whose business is it anyway - by John Zenkin

I WAS going to write about the rather dry subject of risk assessment this week until I watched the Goldman Sachs congressional testimony on Tuesday night and linked it in my mind with an article in The Economist of April 24 entitled “Shareholders vs Stakehol-ders: A New Idolatry” which deals with the old conundrum of where to focus in good governance: on shareholders, customers or employees.

The reason I changed my mind was that I was shocked to listen to three Goldman Sachs traders being unable or unwilling to answer a simple “Yes” or “No” question from Senator McCaskill of Missouri.
Her question was simple and to the point: did they have a fiduciary duty to their clients, which means looking after their clients’ interest first?

Only one of the panel of four said “Yes”.

The other three hedged their answers to the increasing anger of the senator as she repeated her question.

From the testimony it appeared that all that mattered was that Goldman Sachs made money at the expense of the clients it was supposed to serve, even going to the extent of shorting trades that they had sold to their clients as being good investments, even though internal memos described the assets involved as “shi**y”.

Whether their behaviour was illegal is the subject for the courts, though it certainly appeared that the senators believed strongly that what the traders had been doing was unethical.

As I watched, fascinated by the drama, it seemed to me Goldman Sachs had forgotten the first rule of business stated by the late Peter Drucker in 1946 in his book The Concept of the Corporation that “the purpose of business is to create and maintain satisfied customers”.

What is more, this rule of business was Goldman’s own rule as long as they were a partnership because they recognised that the long-term interests of the partners were to avoid alienating their customers in return for a short-term profit.

What seems to have happened since Goldman Sachs went public is that its employees have been able to look after their own interests at the expense of both customers and shareholders.

This is because the money they were playing with was no longer theirs, but that of other people – their investors and their shareholders.

This suggests that there are limits to how much a company can look after the interests of its employees, especially when they are paid enormous bonuses, apparently regardless of how much pain the shareholders are experiencing (as we have seen in the case of AIG or Merrill Lynch).

It is even more the case when the payout comes from the taxpayer in the form of bailouts.

It seems to me therefore that if there is an excessive focus on protecting shareholder or employee interests at the expense of the client or the customer, the company could put itself at unnecessary risk as far as its reputation and license to operate are concerned.

How soon Goldman Sachs will recover from the damage to its brand shown in the following quote from April 28’s Washington Post is anybody’s guess:

“There was a time when issuers would pay a premium to have Goldman Sachs underwrite their securities, just as there was a time when investors would pay a premium to buy into a Goldman-sponsored offering. Today, Goldman has fully monetised the value of its reputation, and anyone who pays such a premium is a fool.”

I was also struck by the fact that their style of defence bore similarities to those of Exxon in the Valdez case, Shell in the Brent Spar case and recently Toyota when it was found wanting on quality. When customers get upset or when NGOs go after companies, their argument is emotional – designed to be fought in the court of public opinion rather than in a court of law. Legal niceties, technical subtleties do not go down well with people who are looking for memorable soundbites.

What ordinary people want to see is someone who shows emotion and empathy, says he/she is sorry and that he/she will try to do better next time and then there can be closure. Lawyers, with their eye on court cases and damages, advise clients to never say sorry and to prevaricate and obfuscate. This merely increases the anger and frustration of the offended parties.

I have, however, yet to see a company suffer because it has focused too much on serving its clients or delighting its customers.

Perhaps a more correct approach in today’s world is that of the new boss of Unilever, quoted in The Economist article referred to earlier, where he says:

“I do not work for the shareholder, to be honest; I work for the consumer, the customer … I’m not driven and I don’t drive this business model by driving shareholder value.”


·The writer is CEO of Securities Industry Development Corp, the training and development arm of the Securities Commission.

Still at the centre of the world’s news coverage

A range of issues keeps China in its coveted position as the most watchable country.

CHINA’S global profile remains undiminished this week, despite many other issues competing for international headline space.

The buzz among foreign investors is whether it is too late to “enter the Chinese market.” There is a strong implicit element of time for what will soon be, if not already, the world’s biggest market.

China Daily on Monday ran a piece on how opportunities still exist, particularly for SMEs. A consensus seems to be that while doing business in nominally communist China is better than ever because of improvements in institutional frameworks and the regulatory environment, competition from Chinese rivals particularly “tech companies” is getting tough.

The Google-Baidu competition could be an object lesson here. With incentives like the recent 4 trillion yuan (RM1.88 trillion) stimulus package for state-owned enterprises, China’s capitalist ethic is doing well.
The number of private companies grew more than 4,600% to 6.6 million over the past 18 years. Among foreign corporations, 96% of Fortune 500 companies are already operating in China.

Then there is the negative side as well, including that which reinforces negative stereotypes. This often involves Beijing’s attempts to control cyberspace, and what China’s 384 million Netizens may or may not do.

A Bill of amendments requiring Internet companies and telcos to report on users passing state secrets is up this week for its final reading in the National People’s Congress Standing Committee before becoming law. Associated Press reports that the move has already attracted criticism at home and abroad.

Officially, tightening the law on communications use is to ensure greater national security. Among the problems is that interpretation of what is a “state secret” is open to interpretation and abuse, so the law would be arbitrary and draconian.

More legislation attracting controversy this week concerns modifications to the law on the detention of suspects. When police have been required to pay compensation to persons wrongly detained, now compensation applies only to wrongful and prolonged detention beyond 37 days (one week and one month).

There would be no huge claims; sums derive from the average daily wage of a state employee in the preceding year. However, there are provisions for further compensation in cases of police brutality. Such laws may not be the best indicators of social change. A better measure would be the impact of public debate and argument on the policymaking process.

China’s next international extravaganza, following on the 2008 Olympics, is Shanghai’s World Expo that opens tomorrow. Singapore’s Straits Times bills it as the “glitziest and greenest” Expo of them all.

The organisers would make it the most glamorous World Expo yet. But, mindful of critics who would condemn a commercial showcase with doubtful environmental value, Shanghai’s show would also be the most environment-conscious.

For symbolism, there would be the world’s largest solar panel; for novelty, a restaurant would recycle excess food to produce electricity; and for visitors’ convenience, 1,000 vehicles powered by renewable energy would ferry people around the site.

Four large parks would act as “green lungs” while 3,000 inefficient factories have been closed. The Expo, due to run for six months, took nine years to prepare. The environmental aspects alone cost US$33bil (RM106bil), which is twice that of the Beijing Olympics. This indicates something of the scale with which China operates, ever since the Great Wall. Inevitably, the growing clout of a rising superpower would be reflected in its role in major multilateral institutions. Perhaps the most appropriate here is the World Bank, where this week China nearly doubled its voting power to 4.42%.

This places China as third-powerful in the bank after the US and Japan, reflecting its number three position in world GDP terms. That could soon change again: China’s economy is already bigger than Japan’s in PPP (purchasing power parity) terms, and is set to be number two even in GDP terms this year.

Every other country in the 186-member institution had its share reduced to make way for China’s increased strength except the US, which retained its share at 15.85%. But since the world’s largest debtor nation owes so much of its wherewithal to China’s economy, relations among Bank members may have to change further to remain relevant.

MIDWEEK By BUNN NAGARA

In China we trust,again

Will China crash economically?

Capital Talk

CHINA bashing by now must surely be the most popular sport among Western investors, mass media and institutions. China crashing now, China crashing a few years later, China crashing anytime and crashing forever is the mantra.

A mantra is like a hymn. If you chant it endlessly and repeatedly, it gets stuck in one’s head. However, the fact that it may get stuck in one’s head does not mean that it will happen or that it represents the reality.
In fact, a mantra based on superfluous analysis or worse, an inherent bias, would block the real realities from surfacing. An objective analysis of the global economic conditions would show that this is what is actually happening.

With all the high profile, high publicity given to China bashing, all eyes are centred on China in general and its property sector in particular. Will China crash? When will China crash? i Capital’s managing director gets these questions all the time.

In contrast to all the dire predictions about China, i Capital expects China’s economy to nicely soft land this year. When the Lehman Panic broke out in September 2008, and almost collapsed the world economy, China was ahead of every other economy in implementing economic expansion measures.

China very quickly bottomed out and pulled the global economy out of its worst conditions (which, of course, no Western country has given China any credit). While the US led the world economy into possibly the worst recession in a long time, China and the rest of Asia quickly pulled the world economy out of a US-created catastrophe (see charts).

As China’s economy recovered quickly and strongly, the Chinese government has subsequently acted very quickly and effectively again. Measures to cool the hot property sector down have already been announced months ago.

China’s government is ahead of the property “bubblet” curve. However, it takes time for the impact to be felt, which is expected to take place in the coming months.

Selected segments of the property sector will cool down but the rest of the economy will still be performing well. China’s economy is huge and a cooling of the property sector will not crash the continental economy.
The decision by The People’s Bank of China not to raise interest rates so far is correct. Why kill the rest of the economy when there is no need to? There are many other effective ways to tackle the property “bubblet”, especially when the cause of the rise in property prices is not low interest rates.

Another unnoticed development that favours China soft-landing this year is that the current global economic recovery is not synchronised. The recovery in the United States is behind that of China and the rest of Asia but it is gathering momentum.

The growth in US exports and the recovery in the industrial sector have led the US recovery. Consumer spending is also recovering and will gather momentum as the US job market improves further. The US housing sector is also expected to contribute positively this year.

As 2010 progresses, the US economic recovery will play a greater role in global economic growth. This is ideal, as it will allow China to turn to other economic sectors for growth while it tackles its property bubblet.
In short, as the US economic recovery gathers momentum in 2010, China’s GDP growth would slow to a healthy, high single-digit rate.

Based on the economic outlook of the United States and China, i Capital sees a benign global economy. Unlike 2006 or 2007, 2010 will see a healthy unsynchronised global recovery. This upbeat view can, of course, be turned topsy-turvy by unexpected events. There seems to be plenty nowadays.

One, while the currency pressure on China seems to have reduced somewhat, the United States is now cleverly turning to other countries and US-dominated global institutions to crack China’s position. Apparently, even India and Brazil are now joining in the bandwagon as prominently headlined on the front page of the Financial Times.

So, although the currency pressure cooker is not boiling over for now, the threat of a trade war needs close watching.

Is China crashing the real worry? Or is the eurozone breaking up the real worry? Actually, an economy that has crashed but that has not been described in this way is the eurozone a.k.a a continent of discontent.

First, it was the PIGS (Portugal, Ireland, Greece and Spain). The budget deficit for Iceland is 14.3%, Greece 13.6%, Spain 11.2%, Portugal 9.4% and China 2.2%. The China bashers say that China’s budget deficit is actually higher because it does not include the local governments. We wonder why the clever Greeks did not think of this simple trickery.

Anyway, the Greek civil servants are on strikes and the budget deficit is running at unsustainable levels. No wonder the Greek economy is not in a sustainable mode. This continent of 35-hour working week but with wages paid equivalent to 350-400 hours of work in China or India is declining fast, faster than what is generally realised or acknowledged.

Greece, supposedly the birthplace of democracy, has transformed itself into a “debtmocracy”. Will China crash, as we all are led to believe, or will Greece be the Sword of Damocles for the eurozone and thus the global economy?

Then, as if Greece et al is not enough, as if an evil spell has been cast on Europe, we all discovered that cash-starved Iceland is actually rich with ashes. Imagine Iceland, more than 1,800km away from London and more than 2,100km away from Germany, taking revenge on the eurozone. Who would imagine that?

The hiatus caused by the volcanic eruption is not small. That a volcano from Iceland is causing so much havoc in the eurozone is symbolic of the very difficult period that this fledgling economic bloc is undergoing.

Almost every economy in the eurozone, including that of the United Kingdom, is in trouble. As i Capital wrote above, this is the reality, this is what is actually happening.

China and the rest of Asia are not crashing. The United States crashed and the eurozone has crashed. Should the East follow the West?

i Capital does not think so although there are many out there who would want to see this happening.
Once again, we have to say, In China We Trust. As i Capital advised previously, “This decoupling is here to stay”.

Aussie 'fraud mastermind' Daniel Tzvetkoff to stay in jail

Happier days ... Daniel Tzvetkoff and his former Gold Coast mansion.

A US judge has crushed former Australian internet high-flyer Daniel Tzvetkoff's hopes of winning release from prison ahead of his trial.Just a week ago Tzvetkoff, 28, accused of being the mastermind of a $US540 million ($590 million) internet gambling money laundering and bank fraud scheme, was granted bail by District Court Judge Peggy A. Leen in Las Vegas.

The decision infuriated US government prosecutors who believe Tzvetkoff may have a secret stash of $US100 million and would flee if released from prison.

At a fresh hearing on Wednesday in the New York District Court, where the trial will be held, Judge Lewis A. Kaplan sided with prosecutors and reversed the decision.

He declared Tzvetkoff "a serious risk" of fleeing if granted bail.

"No condition or combination of conditions will reasonably assure the presence of the defendant as required," Judge Kaplan noted.

Tzvetkoff has been locked up in the North Las Vegas Detention Center since his arrest at a casino in the city on April 16 despite Judge Leen's bail decision last week.

With Judge Kaplan's ruling, Tzvetkoff faces a tough road.

The complicated money laundering and bank fraud charges he faces could take two years to be finalised in court, resulting in Tzvetkoff spending that time in jail even if he is ultimately found not guilty.

If convicted of the charges Tzvetkoff faces up to 75 years in jail.

US Marshalls will transport Tzvetkoff from the jail in Las Vegas to a prison in New York.

The decision is a major blow to Tzvetkoff and his family, including fiancee Nicole Crisp who is eight months pregnant and hoped to live with Tzvetkoff in New York until the trial was completed.

Tzvetkoff's father, Kim, flew to Las Vegas last week to support his son in court and agreed to put up his $US1.17 million Brisbane home as bond and also drive his son from Las Vegas to New York for the proceedings.

If Judge Leen's bail decision had not been overruled, Tzvetkoff would have lived in New York and submitted to electronic monitoring, maintained a verified residence in New York and abide by a curfew.

Wednesday's court decision is the latest fall from grace for Tzvetkoff, who created highly-profitable Brisbane-based internet payment processing company Intabill, bought a $27 million home on the Gold Coast, drove Lamborghinis and Ferraris, sponsored a professional motor racing team and had was once estimated to be worth of $82 million.

Tzvetkoff has since filed for bankruptcy.

Source: http://newscri.be/link/1086509

Debt crisis: UK banks sitting on £100bn exposure to Greece, Spain and Portugal

Shares in UK lenders slide amid fears of renewed credit crunch but French, German and Swiss most at risk from Greek default

Barclays is estimated to have £40bn exposure to Greece, Portugal and Spain, while RBS may have £35bn in loans. Photograph: Kevin Coombs/Reuters

Fears of a fresh banking crisis stalked the markets today as the risk of Greece defaulting on its debt repayments raised concerns about the exposure of major banks to indebted countries in Europe.

As analysts estimated that Britain's banks have a combined exposure of £100bn to Greece, Portugal and Spain – the three countries causing most concern on the financial markets – the Financial Services Authority was closely watching the markets and assessing exposures to the vulnerable countries.

After the ratings agency Standard & Poor's had downgraded Greek debt to "junk" yesterday, bank shares were knocked today but spared further falls as the downgrade of Spain's crucial credit rating came just as the stock market was closing. With UK banks standing to lose more in Spain than in Greece and Portugal, analysts said there might have been a more severe reaction if London had remained open longer today.

Analysts at Credit Suisse calculated that UK banks had £25bn of exposure to Greece and Portugal but £75bn to Spain, where the collapse in the property market has already forced banks such as Barclays to admit to bad debt problems and left Royal Bank of Scotland facing questions about its exposure.

"Lloyds' exposure to the three regions is likely to be negligible, we estimate that Barclays has £40bn exposure (predominantly loans in Spain and Portugal, excluding daily positions in Barclays Capital), and RBS has around £30bn–£35bn (again predominantly Spain, although we estimate £3bn to £4bn in Portugal and Greece as well)," the Credit Suisse analysts said.

Money markets, in which major banks lend to each other, also reflected the tension caused by the Greek downgrade with eurozone interbank lending rates enduring their biggest rise in nearly a year.

Much of the anxiety was targeted at French, German and Swiss banks. Howard Wheeldon, of BGC Partners, said: "If Greece defaults that means the pressure will then be felt and exerted on national banks that hold the Greek debt. That includes very many German, French and Swiss banks and it just may be that with so many banks involved one of these might just go down."

At today's annual meeting, RBS's chairman, Sir Philip Hampton, played down any exposure to Greece, while Lloyds' finance director, Tim Tookey, said on Tuesday that the bank had no "material [significant] exposure". Barclays publishes a trading update on Friday and will face questions about its exposure to the countries being downgraded.

In early trading today banks were the biggest fallers, with RBS tumbling 7%, Lloyds down by 6.5% and Barclays off 4%, though they recovered much of their losses by the time market closed.

Among continental European banks, analysts at Evolution calculated that Fortis, Dexia, CASA and Société Générale were most affected because of the value of their Greek debt holdings relative to their size.

According to Barclays Capital, UK banks account for only 3% of the exposure to Greek bonds, while data from the Bank for International Settlements shows that, at the end of 2009, Greece owed about $240bn (£160bn) overseas. Of this, France and Germany have the biggest exposures of $75bn and $45bn respectively.

Analysts expressed concern about the problems spreading. Daragh Quinn, banks analyst at Nomura, said: "Given the scale of the debt problem facing Greece, the prospect of some kind of debt rescheduling or even default are being considered as possibilities by the market. Sovereign risk concerns are also spreading to Portugal and Spain."

Only last week the International Monetary Fund, which has been called in to help fund the Greece deficit, warned about the impact of a sovereign risk crisis. "Concerns about sovereign risks could undermine stability gains and take the credit crisis into a new phase, as nations begin to reach the limits of public-sector support for the financial system and the real economy," the IMF said.

Credit Suisse analysts pointed out that not all the problems facing the markets were negative for the banking sector. "The increase in volatility should assist revenues at the investment banks, particularly for primary dealers like Barclays," the Credit Suisse analysts said.

"But there are clearly a number of important potential negatives. These include the potential for increased capital and liquidity trapping in affected sovereigns, or increased micro prudential requirements for local subsidiaries. Our bigger concern, however, is increased nervousness towards the UK," they added.

But while the timing of the downgrade of the Greek sovereign rate surprised the markets, there had been expectations for some time that the ratings agencies would eventually lose patience with the situation and take the decision to downgrade. This might have helped to cushion the markets' reaction to the situation, analysts said, and was likely to ensure that the major banks and other investors had already assessed their exposure to the Greece market before the downgrade took place.

The impact of a downgrade

The cost of borrowing for the Greek government briefly hit 38% in a stark illustration of the impact that a downgrade can have on the health of a nation's finances. Greece has been graded BB+ by the credit rating agency Standard & Poor's, official "junk" territory. It is now on a par with Azerbaijan, Colombia, Panama and Romania.

 

Britain is one of 11 countries with a prized 'triple A' rating, along with Australia, Denmark, Germany, France, the United States and Luxembourg. But it is the only one of the elite to have been put on "negative watch", a warning that it might face a future downgrade.

The cost of Greece borrowing on a two-year bond was as little as 1.3% in November, but has risen sharply amid fears of bankruptcy. By the end of tradingtoday, the cost had fallen back to 19%. In contrast, Britain is able to borrow on two-year bonds at a rate of 1.2%. S&P's lowest rating, CCC+, is assigned to Ecuador, which defaulted on $3.2bn of bonds last year.
 

Jill Treanor,guardian.co.uk, Wednesday 28 April 2010

Shanghai sets stage for World Expo spectacular

(Reuters) - Shanghai unveils to the world on Friday its multi-billion dollar World Expo, which China hopes will be an opportunity to assert its growing global clout and show off the fruits of its economic transformation.

Shanghai, already China's richest and most glamorous city, has made an unprecedented effort to impress with its Expo, a world fair which has in recent years largely dropped off the world's radar, and to grab some glory from Beijing's Olympics.

The new roads and subway lines which criss-cross the city have been purposely built not only for Shanghai's future growth, but also to transport the 70 million mainly Chinese who will visit during the six-month extravaganza.

China says it has spent $4.2 billion on the Expo -- double what it spent at the 2008 Beijing Olympics. It is the most expensive and largest Expo to date, and local media have reported the true cost is closer to $58 billion, including infrastructure.

"This is a very important moment. We have made preparations for years," Hong Hao, Deputy General for the Expo, told Reuters.

Shanghai wants to put the World Expo back on the world stage as the first developing country to host one, encouraging countries large and small to take the Expo seriously and use it as a means to improve fractured foreign ties and increase trade.

China's relations with the outside world have been strained of late, with issues like the value of the yuan currency, a fight over censorship with Google and the trial of four Rio Tinto executives casting a pall over the country's efforts to present itself as a respected international player.

Leaders including French President Nicolas Sarkozy, Russian President Dmitry Medvedev, South Korean President Lee Myung-bak and EU Commission President Jose Manuel Barroso will be at Friday's opening ceremony.

Smaller countries, such as Israel, are also making efforts to engage China through the Expo, despite the shadow cast by the financial crisis.

Yaffa Ben-Ari, deputy commissioner general of Israel for the Shanghai World Expo, said the Jewish state aimed to boost cooperation through the event. It was the first time, he said, that Israel had built its own pavilion, with the government allocating a budget of $12 million for the project.

TEETHING PROBLEMS

The project has not been without its detractors. Rights groups have complained about evictions of residents to make way for the two spectacular main Expo sites on either side of the murky Huangpu River.

Some Chinese have also wondered why the country, with its growing rich-poor gap, severe environmental and other problems is spending so much on an event which lacks an Olympics' cachet.

"Our living costs are five times yours but our salaries are one fifth of yours. Yet we survived and we are still joyfully and happily welcoming friends from all around the world," wrote popular Shanghai blogger Han Han, with a strong sense of irony.

Despite unremitting propaganda in state media about how great the Expo will be, not all the country pavilions will be finished in time for Friday's opening.

Organizers are also trying to iron out teething problems for handling large crowds after initial trial days received widespread complaints from tired, hungry visitors.

Still, the financial hub is abuzz with Expo fever. The blue molar-shaped "Haibao" mascot adorns every street corner, bus stop and subway station.

"Most people are very excited," said Shanghai resident Si Yudan, 30, brushing off all the inconveniences of seemingly endless renovations and building projects to spruce up the city.

Security has been stepped up, with subway passengers forced to go through airport-style bag checks.

Analysts, however, say a terror attack is unlikely due to the relatively low global profile of the Expo.

"Of more concern would be bird flu or H1N1. If that breaks out on site, how will they manage to prevent it spreading and how will they attempt to quarantine such a large number of people?" said Greg Hallahan, regional director at business risk consultancy PSA Group in Shanghai.

(Additional reporting by Rujun Shen; Editing by Ben Blanchard and Ron Popeski)

(Reuters), http://newscri.be/link/1084332

Joos Orange Solar Charger

Reviewed by Bryan Gardiner 

$100  •  solarjoos.com/

Solar Charger Juices Your Gadgets, Rain or Shine

It's an unavoidable fact of life: Your gadgets need juice —like a preacher needs pain, like thunder needs rain. (Thank you, Bono.) And when it comes to portable power-ups, our new favorite flavor is Orange.

The Joos Orange solar charger is the physical manifestation of simplicity. It's rugged, easy to store and carry, and (most importantly) quick to bestow a watt or two whenever you need it. Simply choose the correct adapter (the Orange comes with seven of the most popular ones), plug in your depleted phone or DS into the charger and let the life-giving juice flow. Yep, that's it.

Weighing in at a pound-and-a-half, the Orange is roughly the same size and weight as an iPad —and arguably a lot more useful. It can be completely submersed in water, dropped, kicked, and, in general, take the worst abuse man or nature can dish out.

Nestled inside its durable polycarbonate shell is a super-efficient 5,400-milliamp-hour replaceable lithium-ion battery capable of holding its charge for years. In our tests, we managed to dole out four full charges to a completely depleted iPhone before the Orange needed a solar recharge. It even fully charged the notoriously fickle iPad.

While PC owners will be able to download a standalone GUI for precise power metrics, the unit also has two LED status lights on the sides: one solar light (red) and other for the battery (green). When the Orange is running, the red light will blink rapidly to let you know you're getting juiced. Similarly, the green light spits out one blink for every 20 percent of the battery that's full. Four blinks and you know you have a battery that's between 60 and 80 percent full. Even better: the Orange comes with a pair of attachable reflectors that help collect somewhere between 20-30 percent more power when affixed to both ends.

No sun? No problem. While our test model wasn't equipped to charge efficiently by USB, the folks at Solar Components assured us that production models can be refilled at the standard USB charging rate (500 milliamps at 5 volts or 2.5 watts).

So go ahead and leave those outlets. Sucking down solar power has never been easier.

WIRED Cheap. Crazy-durable. Comes with nearly all connector tips you'll need for your mobile gear (you can order specific ones from Solar Components if not). Two screw-in mirror panels beef up charging efficiency by 30 percent. Nuclear fallout blot out the sun? Charge up by USB.
TIRED No Mac compatibility for GUI software. Deciphering the LED takes some getting used to. Screws for attachable mirrors are not ideal and are easily lost.

http://newscri.be/link/1085159

Brain Games Won't Make You Smarter, Study Says

Brain training games do not make you smarter - FACT

"Brain games" are certainly fun, but contrary to what many players hope, they're not likely to make you any smarter. From a six-week study paid for by the BBC and reported by Discovery News:
Photo by wetwebwork.

More than 8,600 people aged 18 to 60 were asked to play online brain games designed by the researchers to improve their memory, reasoning and other skills for at least 10 minutes a day, three times a week.
They were compared to more than 2,700 people who didn't play any brain games, but spent a similar amount of time surfing the Internet and answering general knowledge questions.
Researchers said the people who did the brain training didn't do any better on the test after six weeks than people who had simply been on the Internet. On some sections of the test, the people who surfed the Net scored higher than those playing the games.

Some brain-game manufacturers argued with the studies results, claiming that the findings didn't apply to their games. Whether or not the results of that study are on the money, professor of psychology from the University of Illinois Art Kramer points out: "There is precious little evidence to suggest the skills used in these games transfer to the real world."

It's not all bad news, though. For starters, regular mental exercise may increase your life expectancy. If you're really looking for some brain-boosting benefits, physical exercise is an extremely effective way to exercise your mind—and you're killing two birds with one stone.

Are you a big believer in the brain games? Share your experience in the comments.

Brain Games Won't Boost I.Q. [Discovery News]

Brain training games do not make you smarter - FACT

By Gerald LynchBy 

 

Nicole Kidman may have been fooled by its cute brain teasing charms, but Tech Digest were never truly convinced. Now there's proof: new research shows that brain training games do not improve your IQ.

A scientific study of 11,430 volunteers conducted by the BBC proved that while using the brain trainers made the gamers better at the games themselves, the skills gathered were not transferable to the world at large.

One third of the volunteers were tasked with training their reasoning powers, planning and problem-solving skills, another third played games designed to train short-term memory, attention, mathematical abilities and visuospatial skills, while the final group were given web-browsing tasks that didn't target any specific cognitive skills.

Across all the tests, none of the brain game participants gained a boost in everyday thinking tasks any more than those using the web-browser.

Dr Adrian Owen, a neuroscientist at the Medical Research Council, said: "The results are clear. Statistically, there are no significant differences between the improvements seen in participants who played our brain training games, and those who just went on the internet for the same length of time."

Via: BBC

Brain games may not make you smarter

LONDON: People playing computer games to train their brains might as well be playing Super Mario, new research suggests.

In a six-week study, experts found people who played online games designed to improve their cognitive skills didn’t get any smarter.

Researchers recruited participants from viewers of the BBC’s science show Bang Goes the Theory. More than 8,600 people aged 18 to 60 were asked to play online brain games designed by the researchers to improve their memory, reasoning and other skills for at least 10 minutes a day, three times a week.

They were compared to more than 2,700 people who didn’t play any brain games, but spent a similar amount of time surfing the Internet and answering general knowledge questions. All participants were given a sort of I.Q. test before and after the experiment.

Researchers said the people who did the brain training didn’t do any better on the test after six weeks than people who had simply been on the Internet. On some sections of the test, the people who surfed the Net scored higher than those playing the games.

The study was paid for by the BBC and published online yesterday by the journal Nature.
“If you’re (playing these games) because they’re fun, that’s absolutely fine,” said Adrian Owen, assistant director of the Cognition and Brain Sciences unit at Britain’s Medical Research Council, the study’s lead author.

“But if you’re expecting (these games) to improve your I.Q., our data suggests this isn’t the case,” he said during a press briefing.

One maker of brain games said the BBC study did not apply to its products. Steve Aldrich, CEO of Posit Science, said the company’s games, some of which were funded in part by the US National Institutes of Health, have been proven to boost brain power.

“Their conclusion would be like saying, ‘I cannot run a mile in under four minutes and therefore it is impossible to do so,” Aldrich said.

Posit Science has published research in journals including the Proceedings of the National Academy of Sciences showing their games improved memory in older people.

Small effects, Small difference

Computer games available online and marketed by companies like Nintendo that supposedly enhance memory, reasoning and other cognitive skills are played by millions of people worldwide, though few studies have examined if the games work.


“There is precious little evidence to suggest the skills used in these games transfer to the real world,” said Art Kramer, a professor of psychology and neuroscience at the University of Illinois. He was not linked to the study and has no ties to any companies that make brain training games.

Kramer had several reservations about the BBC study’s methodology and said some brain games had small effects in improving people’s cognitive skills.

“Learning is very specific,” he said. “Unless the component you are trained in actually exists in the real world, any transfer will be pretty minimal.”

Instead of playing brain games, Kramer said people would be better off getting some exercise. He said physical activity can spark new connections between neurons and produce new brain cells. “Fitness changes the building blocks of the brain’s structure,” he said.

Still, Kramer said some brain training games worked better than others. He said some games made by Posit Science had shown modest benefits, including improved memory in older people.

Difficulty levels matter

Other experts said brain games might be useful, but only if they weren’t fun.

“If you set the level for these games to a very high level where you don’t get the answers very often and it really annoys you, then it may be useful,” said Philip Adey, an emeritus professor of psychology and neuroscience at King’s College in London.

If people are enjoying the brain games, Adey said they probably aren’t being challenged and might as well be playing a regular videogame.

He said people should consider learning a new language or sport if they really wanted to improve their brain power. “To stimulate the intellect, you need a real challenge,” Adey said, adding computer games were not an easy shortcut. “Getting smart is hard work.” — AP
++++
www.nature.com/nature

Goldman profited during crisis

Wall Street titan Goldman Sachs made huge profits during the financial meltdown through subprime, or higher-risk, mortgage backed securities that have been linked to the origin of the crisis, Senator Carl Levin said on Saturday.

Wall Street titan Goldman Sachs made huge profits during the financial meltdown through subprime, or higher-risk, mortgage backed securities that have been linked to the origin of the crisis, Senator Carl Levin said.

The US Securities and Exchange Commission (SEC) charged Goldman Sachs with fraud earlier this month, sending the company's share price into a tailspin.



"These emails show that, in fact, Goldman made a lot of money by betting against the mortgage market," said Levin in a statement alongside the internal messages that were released ahead of a hearing next week focusing on the role of investment banks in contributing to the crisis.

The SEC accused the Wall Street investment giant of "defrauding investors by mis-stating and omitting key facts" about a product based on subprime securities.

© 2010 AFP
This story is sourced direct from an overseas news agency as an additional service to readers. Spelling follows North American usage, along with foreign currency and measurement units.

Time to redefine Malaysia’s work culture

THE world of work is changing. More people are working into their so-called retirement years.
Many wish to embark on new career paths. I know of people who have said good-bye to high-stress jobs to follow their passion.

For others who are less financially secure, work is a necessity. Perhaps they didn’t save enough for retirement or maybe their investments have soured.

Age matters

Unfortunately, older employees are not always valued in today’s fast-moving world.

In many instances, employees in their late 40’s or 50’s find it hard to find a company that understands how valuable they are.

Unless the person has special experience or credibility that is sought after for management, directorship or advisory positions, their employability value has decreased.

Age discrimination in the workplace still persists in many companies. All young employees will ultimately age and they will experience similar treatment if we do nothing to change the negative perception aged employees currently suffer. You could soon become a victim of that discrimination.

There is a need to promote ideas for employing older employees and extending the retirement age. Savvy employers must recognise that their success depends on their employees’ contributions. It is the result of team effort, with old and young employees contributing their best. Yesterday’s employer-of-choice concept needs to be refined because the shifts in age demographics that have characterised the early 21st century have brought new challenges to the workplace. For instance:

·Brain drain: Baby Boomers and Generation-X migrating to other countries contributes to the country’s lack of talented and experienced human resource;

·Responding to the marketplace: A salaried ageing workforce will lead to more consumers. Only if businesses create job opportunities – with necessary take-home pay – for aged consumers will there be sufficient cash and demand for the products and services that are designed for that demographic;

·Manpower shortages: Employers with high percentages of older employees have begun to feel the impact of lost talent as Baby Boomers near the retirement age of 55 and above. Their concerns are exacerbated by fewer employees from the younger generation who are keen to work in routine or mundane jobs with unattractive salary packages. Sometimes, it is no longer the “work hard” but the “work easy” attitude for the young ones; and

·Lack of interest: Employers in industry sectors like agriculture, manufacturing or labour-intensive industries are facing difficulties in attracting young people. They resort to hiring foreign workers instead of retirees, who are often fully trained and capable of productive work.

It takes both hands to clap

Stereotypes of older employees have made us believe ageing brings with it physical and attitude limitations (not to mention a lack of being technology savvy). Sometimes this can lead to disengagement at work with other colleagues.

But this may not be necessarily true. There are Baby Boomers with positive mental health and attitudes, superb technical and people skills that are not being given second opportunities to excel.

Unless employers accept that age is just a number and continue the employment relationship as long as the employee can make valuable contributions to the company, nothing much can be done.

While older employees can adopt new paradigm shifts in mindset to be more engaged with young colleagues, employers can consider aligning older employees’ competencies with specific business strategies that take advantage of their wealth of experience. Whether you call them “know-how”, “gut feel” or “instinct”, these attributes are often lacking in younger employees.

Multi-generational workforce

Companies in some western countries with ageing populations are now adopting a new work culture – a multi-generational workforce – and policies that provide alternatives for both young and old employees to improve their work-life balance.

These measures have proven to help overcome manpower shortages, retain employees who want to spend time with family and attract retirees to work.

These new approaches have led to a healthy work culture for employees of all ages with different life priorities and are non gender-biased.

Employers benefit from less staff turnover and salary costs, while work gets done with multi-generational engagement ideas such as:

·Flexible work options: Flexi-time or reduced-hour options like part-time positions, job shares and phased retirement (part-time work designed for older employees to ease the transition into retirement);

·Work on project or contract basis where an employee is “self-employed”;

·Jobs with different sets of responsibilities to develop new competencies, or less demanding jobs due to health or personal reasons; and

·Work from alternative locations or home to reduce commuting time and ecological footprint.

For the 21st century multi-generational work culture to be successful and rewarding for Malaysia’s business and work community, human resource managers must implement these new concepts as soon as possible.

Employment agencies or online job portals will need to specialise in flexible work option job matching.

These are small hurdles but the result is a healthy society with higher number of employed people including retirees, leading to improved economic growth for the country and consumption growth for individuals. It is at this point that we can all stand and give ourselves a self-congratulatory clap – with both hands!

BY CAROL YIP
 ·Yip is a personal financial coach and also founder and CEO of Abacus for Money.

Australia Tightens Foreign Property Ownership Rules

 Temporary residents need approval o buy property

April 24 (Bloomberg) -- Australia will tighten rules on foreign investment in real estate, and introduce penalties to enforce the changes, to ensure pressure isn’t placed on housing availability for local residents.

Temporary residents will require approval from the Foreign Investment Review Board to buy property, and will have to sell when leaving the country, Assistant Treasurer Nick Sherry said. It ensures “working families are not being priced out of their own family homes,” Prime Minister Kevin Rudd said in Canberra today, a transcript from his office shows.

Treasurer Wayne Swan eased restrictions on non-residents in late 2008, making it easier for foreigners to buy property without government approval. Surging house prices, which advanced more than 10 percent last year, were among reasons the Reserve Bank of Australia boosted the benchmark interest rate this month for the fifth time in six meetings.

“Foreign purchasers can play an important role in supporting the development of new rental properties,” Aaron Gadiel, chief executive of Urban Taskforce Australia, said in an e-mailed statement. “Given that our national housing undersupply is reaching 200,000 homes, we should welcome any investment by foreign residents or businesses in boosting our supply of newly built homes.”

The lack of housing supply is the underlying issue for housing affordability, Gadiel said. Urban Taskforce Australia is an industry group representing property developers and equity financiers.

‘Foreign Speculators’

“We want to make sure that foreign speculators are not going to force up prices for Australians seeking to buy their own home, buy their first home, and we think this is the right course of action,” said Rudd, who faces an election within a year.

Australia will back up the changes with compliance, monitoring and enforcement measures including civil penalties, Assistant Treasurer Sherry said in a statement today. These include compulsory sales of property purchased in breach of the new investment regime, Sherry said.

Temporary residents will be required to start construction on undeveloped land within two years of purchase or be forced to sell, he said. The tighter rules will also apply to people on student visas, Sherry said.

Overseas Buyers

Overseas buying may have contributed to rising house prices, Sherry told reporters in Melbourne today. The measures are precautionary and won’t have a “major impact” on the housing market in Australia, Sherry said.

David Airey, president of the Real Estate Institute of Australia, is among those blaming gains in home prices on an increase in investment from overseas buyers, particularly Chinese. The institute today supported stricter rules. Prices jumped 12.7 percent in the year through February, a March 31 report by real-estate monitoring company RP Data-Rismark showed.

Overseas purchasers accounted for about 0.62 percent of transactions by LJ Hooker in 2009, David Maher, business analyst at the real estate agency, said in a telephone interview on April 15.

‘Ridiculous Claims’

“Claims that overseas buyers are pricing people out of the market are ridiculous,” Maher said. “There’d have to be a mammoth increase in the level of overseas investment to have any real effect on affordability in the Australian market. The numbers don’t show that.”

An increase in housing through the release of more land, and measures to reduce the amount of money and time it takes to develop new projects, are required to ease prices, Charles Tarbey, local chairman of Century21 Real Estate, said April 6.

The average sales price of houses and apartments its agents sold between Jan. 1 and March 29 this year was A$407,228 ($378,000), an 18 percent increase from the same period in 2009, according to Century21 data.

--With assistance from Nichola Saminather in Sydney. Editors: Jim McDonald, Ravil Shirodkar

By Ben Sharples
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net

China's Global Approval Ratings Are In

For the first time since the BBC started tracking global views in 2005, the United States' influence in the world is now more positive than negative on average. Fine. So where does China stand in the grand scheme of things?

As you might expect, it depends on who's spinning the data as well as who you ask.


China Daily unequivocally says that "China's image has seen an upswing after hitting a low last year," with 41% of nations polled seeing China as having a positive influence on the world. The survey, conducted by GlobeScan/PIPA among more than 29,000 adults, asked respondents to say whether they considered the influence of different countries in the world to be mostly positive or mostly negative.

The fun starts when you look at the details, with significant year-on-year shifts in views of China within different countries.

For example, China's image improved considerably in such countries as the Philippines. While in 2009 a majority (52%) took a negative view, this has dropped 21 points. Now a majority (55%) has a positive view (up 16 points).

Japan's attitude witnessed a remarkable change, with those holding a negative view dropping from 59% to 38%, while those holding a positive view soared from 8 to 18%.

Europe continues to be the region that is the most negative toward China, but negative views have softened in Portugal (now 54%, down from 62%), and France (64%, down from 70%). In addition, positive views have increased among Germans (now 20%, up from 11%), although a large majority (71%) remains negative.

The U.S.'s attitude toward China remains roughly unchanged, with 51% holding a negative view. The report, curiously, did not give a figure for those holding a positive view.

All told, China ranks 11th in the 28 countries or regions mentioned in the poll, behind Germany, Canada, the European Union, Japan, the United Kingdom, France, Brazil, the United States, South Africa and India.
You can read about poll methodology here.

By Ray Kwong
Ray Kwong is a cross border business development geek and a Forbes contributing writer.

Source: http://newscri.be/link/1082961

Wealth of Britain's Richest Rises by 30%

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Rich list reveals record rise in wealth

Collective wealth of Britain's 1,000 richest people rose 30%, the biggest annual increase in list's 22-year history

Lakshmi Mittal topped the rich list for the sixth straight year. Photograph: Sebastien Pirlet/Reuters

April 25 (Bloomberg) -- The fortunes of the richest people in the U.K. rose at a record pace last year, with the 1,000 wealthiest experiencing a 30 percent increase in their net worth, according to the annual Sunday Times Rich List.

Lakshmi Mittal, the 59-year-old chief executive officer of ArcelorMittal, the world’s largest steelmaker, topped the list for the sixth straight year. His fortune doubled to 22.5 billion pounds ($34.6 billion) as the recovering economy bolstered orders from automakers and builders, according to the Rich List, published today.

Roman Abramovich, 43, the Russian-born billionaire, remained in second place after adding 400 million pounds to his net worth.

The cumulative wealth of the U.K.’s richest people rose to 333.5 billion pounds ($512.8 billion) during the year. The total fell short of the record 413 billion pounds reached in 2008, according to the rankings compiled each year by Philip Beresford. None of the top 10 lost money during the year, while the number of billionaires on the list rose 10 to 53.

The list has been compiled for the past 22 years and is based on identifiable wealth, including property, art, racehorses and shares in publicly-held companies. It excludes bank account balances.

The 30 percent increase in combined wealth in the last year is “easily the biggest annual rise” in the history of the list, Beresford said in an e-mailed statement.

The year before, the net worth of those on the list had plunged 37 percent, in the depths of the global financial crisis.



Joseph Lau, Duke of Westminster

The highest new entry was Joseph Lau, the 58-year-old chairman and CEO of Hong Kong-based Chinese Estates Holdings Ltd., who took the 12th spot. Lau, with a fortune calculated at 3.8 billion pounds, recently paid 33 million for a house in London’s Eaton Square.

The Duke of Westminster, the highest-placed British-born billionaire, remained in third place. His ancestral land holdings in central London are among the most expensive properties in the nation and helped boost his net worth by 4 percent.

It was the smallest gain seen among the wealthiest 10 people in the U.K. The Queen, 84, ranked 245 with a fortune of 290 million pounds.

New to the 10-top list were Alisher Usmanov, who made his money in steel and mines, Galen and George Weston, whose wealth from retailing was combined this year, and Indian-born Anil Agarwal, who had an increase of 583 percent in his fortune thanks to the skyrocketing price of his London-based mining group
Vedanta Resources Holdings Ltd.
 
ArcelorMittal
Falling from the top 10 were Hans Rausing and family, whose fortune is in packaging; Sammy and Eyal Ofer, and John Fredriksen in the shipping industry; Joe Lewis in investments; and Kirsten and Jorn Rausing in inheritance.


Mittal holds a 41 percent stake in Luxembourg-based ArcelorMittal, which he formed through the takeover of Arcelor SA by Mittal Steel Co. in 2006. The stock surged 89 percent in 2009 as it boosted output of the metal as the world economy recovered and automakers and builders increased orders.

The steel industry is recovering faster and stronger than expected, the World Steel Association said April 20. The group, whose members include nineteen of the world’s 20 top steelmakers, forecast that steel consumption will increase 10.7 percent this year.

European hot-rolled coil, a benchmark product used in cars and appliances, increased 41 percent in the first quarter as raw material prices surged, according to Metal Bulletin data.

Abramovich
Abramovich, owner of the Chelsea football club, accrued his wealth after the fall of the Soviet Union by building up Russia’s fifth-largest oil producer. His oil business, OAO Sibneft, was bought by OAO Gazprom in 2005 as then-President Vladimir Putin moved to return the country’s oil wealth into state hands.

The billionaire, once Russia’s richest man according to Forbes, has since bought into metal producers. Millhouse LLC, which manages his assets, has stakes in Evraz Group SA, Russia’s second-largest steelmaker, and Highland Gold Mining Ltd.

Britain’s 10 Largest Fortunes (in billions of pounds)

1. Lakshmi Mittal and Family       Steel          22.5
2. Roman Abramovich                Oil             7.4
3. The Duke of Westminster         Property        6.8
4. Ernesto and Kitty Bertarelli    Pharma          6.0
5. David and Simon Reuben          Property        5.5
6. Alisher Usmanov                 Steel, Mines    4.7
7. Galen and George Weston         Retail          4.5
8. Charlene, Michel de Carvalho    Inheritance     4.4
9. Philip Green and wife           Retailing       4.1
10. Anil Agarwal                   Mining          4.1

By Michelle Fay Cortez in London at mcortez@bloomberg.net