ALL THINGS BIG AND SMALL 2.0

The daily gyrations and noise of the financial markets are these days exacerbated by algorithmic machine-trading. In addition, the high inter-connectedness of global markets and availability of instantaneous information leads to high correlation between all asset classes: equities, bonds, commodities and currencies; leading to higher and higher volatility via feedback loops until it crashes (nothing goes on forever  in such Chaos theory models). Like what happens when your electric guitar's signal feedback to the amplifier turns into a howl. Taking a longer term view helps in taking away the noise to view the fundamentals. The chart below shows US interest rate changes from 1965 to the present, as represented by the yield on 10-tear Treasuries. Superimposed on it, the Dow Jones Industrial Average and Singapore's Straits Times Index. The chart scale is logarithmic and changes are in % for comparability. The second chart shows yields for 5-years so that details can be vi...

The media, analysts, fund managers and assorted pundits have been increasingly strident about China's huge debt overhang amounting to trillions of dollars; warning that it will trigger a financial and economic crisis not only for China but the world soon. We have seen the effects of the current China slowdown on everything from demand for iron ore to demand for luxury goods, as China's economy forms a larger and  larger part of the world economy. The current economic slowdown in China is the result not only of the ongoing Chinese government;s economic structural reforms but also of years of monetary quantitative easing (QE); beginning with the mega economic stimulus of late 2008 which pumped US$600 billion into the economy. This cheap money fuelled the economy, resulting in an overheated real estate sector, over-investment in manufacturing, wasteful projects, underutilised infrastructure. China's demand for commodities such as oil, coal, iron, steel and agricultural co...

COMPARING GDP AND ECONOMIC GROWTH OF COUNTRIES IN THIS REGION WITH RELATIVELY SIMILAR POPULATION SIZE* * Numbers from  www.tradingeconomics.com Attached snip of a spreadsheet compares Australia, Taiwan and Malaysia. These three countries are relatively similar in population size but their GDP, and GDP growth rate are very different because they are different types of economies at different stages of growth, impacted by different factors: 1. Australia: A mature economy, reliant on export of its natural resources and agricultural commodities. But still a force to be reckoned with. A GDP of US$1.4 trillion for a population of just 23 million- more than the GDP of Indonesia (population 250m. GDP US$889bn) Vietnam (popn 92m, GDP US$186bn) and Philippines (popn 102m GDP US$285bn) 2. Taiwan: Now a backwater because of China's rise? Its GDP of US$530bn is still larger than Malaysia's with an almost similar population size, but its growth rate is negative. Bu...

The Intelli-Menu Generator is a smart menu generator for a one-pot rice meal accompanied by soup. Style of cooking is Chinese and ingredients are mostly found in Chinese cuisine. In its current version the algorithms for combination and selection of ingredients is basic. But later versions will have memory (so as not to repeat a menu or have a big similarity in ingredients between rice dish and soup). User will also have the ability to input by a points system his/her preferences for each ingredient, and system will have output that  has a minimum score. The system is flawed because it does not have human sense of taste and balance between ingredients and it often ends up being too imaginative for human taste or output bizarre combinations like liver and flower crab soup or mud crab with slice beef and chestnut. Probably the only way to improve it is to provide feedback from its human owners via a rating at the end of each meal. Over time the neural network will learn what the ow...

Why do financial markets rise and fall with every announcement of how a country's economy fared? Why does the media consult economists for their views, and why do views invariably differ, sometimes by quite a lot? Singapore's Ministry of Trade and Industry forecasts the Singapore economy to grow between 1- 3% for 2016. Is this information useful? A 2% admission of possible margin of error is a lot. 2%  of Singapore's GDP of about US$300 billion is US$6 billion. Enough to give each of our 3.27 million citizens US$1,834.00 So what is the value of economic forecasting particularly when it is always being revised up and down as the situation changes? Rationale for still coming out with forecasts: 1. No matter how unreliable macroeconomic forecasts are policy makers still need to have forecasts for decision-making and planning. They cannot rule out the uncertainty but they can do Scenario Planning viz. if scenario A, then do this scenario B then do that. 2. At leas...

THE ZEN OF EATING salted fish pickled greens plain rice porridge slowly i savor every molecule less is more the Zen of eating my dinner.

In Ochanomizu a district of Tokyo, Japan, is a street that has probably the greatest concentration of guitar shops in the world. This is the guitar enthusiast's Heaven where the widest range of guitars are  displayed: With prices from those that cost US$50.00 to US$10,000.00 and more. Of special mention are the dozens of Japanese made brands with astonishingly high quality. The spirit of lawsuit Ibanez, Grecos and Tokais still exist. With workmanship and attention to details much more superior than even Custom Shop Fenders and Gibsons, some of these guitars are not cheap. Indeed they are even more expensive than for example American boutique brands. They have strange names like: Combat, Freedom, History, Bacchus, Momose, Moon and so on. Its a pity that such beautifully-made guitars have names that make a player cringe or hair to stand on end. And these strange names on the headstock are  obstacles to their being accepted by players. Only after decades are the vintage Grecos, T...