ALL THINGS BIG AND SMALL 2.0

No one can predict the oil price 1 month ahead, next week or even tomorrow. But still, some businesses e.g. Airlines have to try because they have to hedge their fuel cost against swings in their fuel cost. In economic planning, governments also need to forecast revenue and expenditure.  One of the ways to hedge is by buying a Futures contract [which is the promise to deliver something at a certain price at a certain time in the future]. Such as the Brent Oil Crude Futures of the CME Group (former Chicago Mercantile Exchange) in the chart above. Can the 1-year, 2 year and 5-year Futures price of oil give us an indication of the direction of oil price? We know that prices change according to events that happen every day and every hour; and no one can predict such events from Libya oil terminals burning to release of data on China’s economic growth. There are two reasons why the Futures price can be a predictor of prices in the future: (1) The futures price is determined by ...

For a long time I have been confused by the terms DNA, Genes, and Chromosomes and what do people mean when they say we have good or bad genes. After reading "The Selfish Gene" by Richard Dawkins (Oxford University Press, 1976), I have a clearer picture. With the help of the graphics enclosed, here is an explanation of what are genes, DNA and chromosomes:   Our bodies are made up of thousands of millions of individual cells. Each cell contains your DNA (Deoxyribonucleic acid) – a molecule with a complete set of instructions for making your body. The double-helix DNA is made up of strings of A,T,C,G* nucleotides stringed together in a particular sequence with  "A" always pairing with "T" and "C" with "G"  *Adenine, Thymine, Cytosine and Guanine. A gene is a particular length of DNA with a particular sequence of A,T,C,G pairing; that has properties which enable it to survive several generations e.g. a Blue eye gene, a Brown eye...

At a  Palm Civet cat farm near Bandung, Indonesia. The cat is fed fresh coffee berries. When he shits, his poo contains undigested parts of the coffee berry. This is processed to give Kopi Luwak (Civet Cat coffee) which is the most expensive coffee in the world. You may pay up to  US$40.00 for a cup of Kopi Luwak in New York or San Francisco.' The civet cat's stomach enzymes do their work on the beans, and the resultant cup of coffee is a strong, snooth and fragrant, but not acidic.

Recently, Singapore citizens who were born before before 31 Dec 1949 were accorded the status of Pioneer Generation by the Singapore government. This group of over-65 baby boomers received several perks and privileges such as on healthcare and transportation costs. According to the government, Singapore owes its success to their stoic, conservative and hardworking nature, their endurance of hardship, their determination to ensure that their children receive a good education and are inculcated with the right values. But now that they are old, we would think that they would be contented to retire and have a good rest. However: Yesterday, in the elevator, I met the lady who sells fresh chicken meat in the market. I asked her why every time I pass by, her stall is closed. She said she spent three weeks in the UK, with her son who has a Masters in Engineering from Imperial College on a government scholarship and is now working for a multinational corporation in London .She still wi sh...

CAN SINGAPORE’S LABOR PRODUCTIVITY IMPROVE MUCH FURTHER? Not a day passes without an exhortation from our government to increase productivity (especially labour productivity). So how is labour productivity usually measured? It is: Total Output /Total Man Hours Worked. Total Output of a country is its Gross Domestic Product (GDP), which is the Value Add of the economy without double counting outputs which are also inputs to another activity. The charts below show statistics on average daily wage cost (US$) and Labour Productivity in Manufacturing (US$) of ASEAN countries plus China  Chart 1 shows two types of column bars representing average daily wage cost and labour productivity both measured in US$. *Numbers taken from McKinsey Global Institute. This chart roughly shows that Wage Cost and Productivity have a very strong correlation. That is, higher productivity goes with higher wages and vice versa, though we are not saying whether it is the tail that wags the dog or dog t...

In Singapore, a plate of curry rice with various sides of meat and vegetables  is what ordinary workers commonly have for lunch or dinner. Thus, a standardized plate of curry rice can be a benchmark for consumer price inflation. I have been tracking the price of the same plate of curry rice for 50 years. This is the famed original Scissors Cut Curry Rice now at the corner of Jalan Besar and Kitchener Road. I first ate it in 1964, when it was at Garden Street, For 50 years I have been ordering the same combination of sides: breaded pork chop in black soya sauce, braised pork belly, fried egg, and cabbage every time I go to eat the curry rice. And every ten years ,in October I would record the price. Here is a c hart of the price of a plate of rice with the same four sides, over the last fifty years. If you take a simple average, which assumes a constant rate of change, the price increase is [(4.90-1.20)/1.20]/50=6.1 % per year. Which is above the normal rate of inflation...

You would almost certainly have heard of Charles Darwin, and his theory of evolution in his book On the Origin of Species. But it is likely that you have never heard of his equally distinguished grandfather Erasmus Darwin. Erasmus also believed in evolution of species by natural selection, and in his case he summed it all up in the poem below, that describes how Life began in the seas, and developed into “breathing realms of fin and feet and wing” [of fish, mammals and birds.] Organic life below the shoreless waves Was born and nurs’d in ocean’s pearly caves; First forms minute, unseen by spheric glass, Move on the mud, or pierce the watery mass; These, successive generations bloom, New powers acquire and larger limbs assume; Whence countless groups of vegetation spring, And breathing realms of fin and feet and wing.