Author Archives: Kevin L

Asset prices & markets

I haven’t looked closely into the numbers, but one cannot help but realise that those markets that have grown well over the past few decades, but where stock exchanges or equity multiples have been relatively pathetic in performance, tend to have exceptional performance in the real estate market. Cases that come to mind include Singapore, China, Vietnam and perhaps more recently, Hong Kong.

This makes the proposal from Singapore government on trying to boost the stock exchange in Singapore through this ‘Equity Market Development Programme (EQDP)’ pretty interesting. The initial idea is to have funds that inject liquidity into companies in the SGX beyond just those represented in the broad market index. Mechanics aside, I don’t know how well the intentions are conveyed by the government. Maybe they think it is too sensitive to share or too controversial. I think it’s more interesting to consider the intent properly than the mechanics or the chances of success at this point.

The issue with wealth getting tied up with the real estate market in Singapore and especially for Singaporeans is that it is illiquid as an asset; the value growth can be quite uneven, and more significantly, housing is a necessity so when it becomes a way in which majority of the people store their wealth, it prevents the newcomers from entering the market. Across generations, it can lead to severe distortions in terms of affordability. Home ownership is seen as a cornerstone in the formation of community and Singapore society – owning a home gives us a physical stake, and more importantly, it leads us to take actions that are more long-term when it comes to caring for our surroundings.

So in my mind, the EQDP is more about trying to activate and encourage overall movement of wealth towards the stock market rather than the housing market. After all, not everyone needs to hold a piece of stock but everyone needs a shelter above their heads. We’d rather have asset price inflation in the stock market than to have it in our housing market. Besides, the liquidity of Singaporeans has probably been contributing to the asset price inflation in the stock markets in the US. So why not keep them at home? This, I think is probably a more significant intent for EQDP than just thinking about financial markets development. And I think this social intent is probably more admirable than the calculative sense of how much more economic benefit or mileage we can get out of the markets in Singapore or the spill over financial services impact it can create.

Now whether the mechanisms proposed as part of the EQDP makes sense or not, I’ll perhaps comment some other day. And maybe when it is clearer what it would be.

Duty to vote

So it’s general elections season. It’s really interesting how this general election gives a great sense of a maturing democracy where more capable candidates are stepping forward, and emphasising the need to provide diversity of voices in the parliament. Peers of mine are stepping forward as candidates. I’m seeing even young independent candidates like Darryl Lo stepping forward.

The features of the Westminster Parliamentary system that Singapore inherited create a strong government because of the ‘first-past-the-post’ approach to voting. While the governing party can somehow gerrymander to optimise their support across constituencies, there is a natural limit to that as their vote share decreases.

The other feature is that the system calls non-ruling parties the ‘opposition’. It is perhaps a result of the typical debate terminology where they talk about proposition and opposition. As our democracy matures, we begin to see what it means more and more to be a loyal opposition, and not be misled by this somewhat ‘confrontational’ sense of the term.

Even as the country faces uncertainty from the global situation, this general election thus far fills me with a sense that Singapore is really ‘coming to age’ as a country that is learning to deal with challenges. Looking at the MPs coming from different walks of life and at a broader range of socio-economic backgrounds (at least from my perception), there is more a sense of ordinary people trying to make a difference in the society they live in, recognising it is no longer enough to slog for their own personal lives and expect the society to develop desirably.

Land resources

I don’t think we’re being imaginative or aggressive enough with tackling climate issues. Nor are we thinking about how to sync-up our efforts to grow our economies, improve lives together with environmental conservation efforts. There are plenty of false dichotomies that result from how we’ve developed our economies. It’s haunting us and discouraging us from thinking in worthy directions for problem-solving.

One example of a dichotomy that may turn out to be false in the long run is the issue of food versus fuel. The food shortage problems today is driven by logistics and localised disaster more than aggregate unavailability or insufficiency. If anything, instead of trying to outright ban dedicated energy crops or crop-based feedstocks for biofuel production, it would be wiser to encourage a programme of reducing desertification and farming of marginal land with resilient crops that can be used as feedstocks for biofuels.

Another involves questioning of thermodynamically-unappealing solutions. Direct air capture (DAC) requires that energy is so cheap that you should mechanically capture the carbon dioxide from the air with machines. And yes, it doesn’t take as much land per unit of carbon captured. It could even compete with vegetation/forests. One could consider through the lens of this competition with nature: Forests takes about 860 square km of land to absorb 1 million tonnes of carbon dioxide whereas if you were to build a DAC plant plus a solar farm powering it which can capture 1 million tonnes of carbon dioxide a year would only take about 30 square km, which is ~3.4% of the land area. [my calculations are back-of-envelope and derived from unit figures here and here].

Yes, but then what about the limited lifespan and all the value chain emissions from making solar panels and DAC systems? Indeed, those trade-offs are worth thinking about, which is why we probably won’t advocate replacing natural habitats and forests with DAC. A forest is more than just sequestering carbon, but also provides other ecosystem services such as enhancing biodiversity, increasing groundwater supply, and even helping to clean the water and reducing the risks of desertification.

At some level, biofuels compete with synthetic or e-fuels; and biomethane perhaps is imagined to compete with hydrogen. But all of these are false dichotomies. The world needs us to keep working on different solutions and coordinate our efforts to scale them where they make sense. One can be purist about different things and get nowhere. Let’s try to lay out the trade-offs and work through those in specific contexts rather than seek to rule out solutions on the whole.

Foreign reserve currency

It’s probably been almost 15 years since the bancor proposal from JM Keynes has been last discussed and taken seriously. I’m wondering how are things progressing today. IMF probably has lost a lot of credibility over the last decade or so and the international financial system has just chugged along without any serious desire to be reformed.

So I wonder why it is not being thought about during this period where Trump is naively attempting to reduce the trade deficit (when of course, he could tackle the budget deficit more effectively himself, instead of relying on Elon and DOGE). Barry’s article on Project Syndicate provides some useful historical considerations though it isn’t that easy to compare US’ economy today with UK in the 1920s.

For one, the Triffin dilemma should be understood and examined rather than wished away by the American administration. Of course, they may think the trouble isn’t the dilemma as much as the issue of being an incumbent superpower on the brink of some decline. Instead of managing a soft landing or a proper way to unwind the situation gradually, the US feels like it’s trying to cling as hard as possible to the incumbency.

So the old fashion macroeconomics and financial issues are back to haunt us again because we haven’t dealt with them properly in the past.

What made Singapore’s economy?

One of the reasons I determined to study economics was because Singapore was a country labeled as an economic miracle, and I thought it’d be cool to figure out what was behind it. For decades, we’ve been told that it was the brilliance, hard work and sacrifice of our forefathers, strong leaders and a little bit of circumstances that made us what we are today.

It was a nice feel-good lesson but it wasn’t always easy to make clear of what it means for the future. There was limited strategies that we could adopt out of it. We did also learn that Singapore was a trading hub so it was vital that the world trading system went on and developed, because we facilitate that trade across west and the east, and we served those large vessels, and loads of containers, bulk goods that had to change hands in our location. So the port we had serviced these people and lots of local companies and industries grew to support that.

Even that wasn’t enough; it was thanks to the brilliance of our early leaders which attracted industrial players to set up shop in Singapore, provide employment, opportunities for skills, and provide an industrial core on which we could develop from. To accomplish all that, we need to have good and well-educated labour force, and a very stable environment. The strength of our government is delivering on all of that.

Today, our economy remains extremely reliant on trade, though one may argue that our original intent was to use trade to lift ourselves up enough to develop our own industrial giants and core. A couple of countries like Taiwan, Korea, Japan and even China sort of achieved that but Singapore remains much stronger in terms of the bringing in foreign direct investments, and providing services to parts of the economy that’s doing very well. We have yet to really build up strong giants, opt-ing instead to play the financial game which is heavily reliant on money as an asset.

I think it is clear that we had spotted an opportunity to bring ourselves out of poverty through the economic strategies but after it delivered good results previously. From now, we will need to figure out the way forward that does not merely involve repeating past actions, but improving upon those past actions more radically. Finally, we ought to recognise that our final goal is to create our own industrial champions that can secure a footing in the global stage.

60 years on, we have matured a lot as an economy but I think it’s only the beginning.

Chinese translations

It’s the Easter weekend and when I do translations for church material I’d inevitably chance upon interesting ways in which the (early) Chinese believers saw things differently from the western believers or denominations. It was somewhat reflected in the manner the translations and terms showcased different aspects of the faith.

Looking into the Chinese terms also encouraged me to dig deeper into the English terms that I’ve taken for granted.

Maundy Thursday – this refers to the Thursday before Good Friday. And as it turned out, ‘maundy’ refers to the word ‘command’ in Latin and is referencing Jesus’ command to the disciples around serving one another just as He had washed their feet for them. The Chinese term was ‘濯足节’ – which focused on the feet-washing.

Good Friday – referring to the day of Christ’ crucifixion. Christians referred to it as ‘good’ as a reflection of the manner it reflected how Jesus had paid the price of death for our salvation. In Chinese however, the day is ‘耶稣受难节’ which means it’s the day of suffering for Christ. The focus was more on His suffering for us.

Easter Sunday – that is of course the day when Christ tomb appears to have been opened and his body gone. However, easter actually refers to something about spring and harvest and corresponds more to some other festival that happens to coincide with the Passover season of the Jews. In Chinese, the term is ‘复活节’ which literally means the day of resurrection, once again pointing back to the day in the gospel.

When I shared these with a church elder who was not familiar with Chinese language, nor the terms in Chinese, he was surprised and commented that the Chinese terms were pretty literal. Perhaps they are, but they are very direct and quickly points us back to the gospel too!

Trump tariffs

We live in interesting times and as an economist, I find it hard to resist commenting on the events I’m living within. I got into economics because I’ve been fascinated by trade, the amazing ability for the world to grow in production just because it is able to specialise in different things and thereby contribute to overall growth and prosperity of the world. The challenge is that being good at different things can affect how the overall increase in wealth or production is distributed. But if we care mainly about the world being able to do more together at the same time, we just want to maximise trade. On the other hand, if we care about only what we get individually, on relative terms with others, then yes, trade can get contentious, even if we are getting more on an absolute scale than if we hadn’t trade.

There is quite a couple of forces within the US economy that is generating the symptoms that we are seeing including the huge trade and budget deficits. None of them is going to be easily resolved through the use of trade tariffs. And yes indeed, there will be a need for the world system of trade, foreign reserves and financial exchanges to shift. The question of how it will shift and whether the transition is smooth or not will depend on both the actions of US and the rest of the world. Trump’s approach of bringing people to the negotiating table doesn’t make so much sense when he is simultaneously weakening his hand while trying to strike deals with multiple parties.

What that shows is a highly ego-centric or US-centric view of the world that will prove to be self-destructive. I’m not saying that the whole of US thinks or act this way but the fact that such a leader is voted into office makes things more difficult than it is. Obviously the electoral college system might need to be rethought or reformed but there’s probably too much gaming of the system that is taking place.

Back to the point about tariffs. By imposing a broad sweeping tariff system across the world, what will happen is that overall cost of living and consumption will rise in the US given how much it is dependent on imports (the deficit themselves reflect that). The goods or services where demand is more price sensitive might find themselves switching more towards domestically produced ones assuming that they exists and can be priced competitively. Otherwise, the status quo + higher tariffs will prevail. The government will maybe raise their revenue from customs but the US consumers are ultimately paying these tariffs. So on the trade front, nothing really happens, and on the government budget front, the government is probably going to get a bit more revenue to reduce their budget deficit.

If we assume that the reason for US budget deficit is that the government isn’t taxing enough relative to their spending, then it means they will have to somehow find ways to obtain more from the value that they are bringing to the markets. Perhaps it is the rule of law, or regulation of the markets, the government isn’t charging the fair amount to the beneficiaries, or allowing too much leakages (think corporates avoiding taxes or billionaires parking their returns in offshore tax havens). If we assume the richest ones are the most mobile, then applying tariffs would simply worsen the inequality situation in the US.

Maundy Thursday 2025

Today is the night before Good Friday when we commemorate the last supper that Jesus had with His disciples. And interestingly the Chinese name for this day refers more to the washing of the disciple’s feet.

In the church I attend, the message preached focused on Jesus’ warning to Peter in Luke 22:31-34. Peter had imagined his faith in God to be much more than he eventually was able show with his actions. But the comforting words from Jesus was:

“But I have prayed for you, that your faith should not fail; and when you have returned to Me, strengthen your brethren.”
‭‭Luke‬ ‭22‬:‭32‬ ‭NKJV‬‬

Peter’s faith faltered but eventually did not fail. He returned to the Lord and was restored. I thought deeply about what Peter went through that night.

He said he was ready to go to prison and even to death with Jesus in verse 33, so what went wrong? Peter was not short of courage, he trusted in Jesus’ power and might. He was ready to fight that night at Garden of Gethsemane so much so the gospel of John recorded that Peter took arms and struck the ear of the servant of the high priest.

But what was probably shocking to Peter was that Jesus called out his violent response. In John 18, it was recorded after Peter injured the servant.

So Jesus said to Peter, “Put your sword into the sheath. Shall I not drink the cup which My Father has given Me?”
‭‭John‬ ‭18‬:‭11‬ ‭NKJV‬‬

And in Luke 22, Jesus reportedly said “Permit even this.”

Yes, the same Man whom the disciples marveled at when the storm was calmed at sea, now effectively says “let them have me” without putting up any fight at all. It is exactly another moment when the disciples would be thinking “Who is this? Who would respond to the treachery with such calmness? Who would respond to such corruption with love and grace? Whom have we chose to follow and what are we bringing upon ourselves?”

Peter’s thoughts about his faith in Jesus probably just vanished before him. Can he go to prison with Jesus and even death without putting up a fight? Will he submit himself to the enemies the way Jesus did?

Unlike most disciples who fled, Peter followed Jesus and his captors. Peter tried to figure out what they were doing to him and find chance to be of use or help. He actually was braver than any of them. But when confronted about being a disciple of Jesus, he denied. There was fear for sure, and he must have been so overwhelmed by the night’s event. But more significantly, he probably wasn’t so sure if he was a follower of Jesus anymore. The denial of Jesus perhaps wasn’t about a moment of weakness but a sense of loss. But it was needed for Peter to discover what he actually had been placing his faith on instead of the Lord he had thought he was following.

So when the rooster crowed and reminded Peter of what Jesus had said, he was probably jolted back to his senses but not before being filled with shame, despair and utter helplessness. He wept bitterly.

Peter would eventually return to Jesus. In John 21 when John told him Jesus was the one at the shore, Peter immediately jumped into the water to swim towards the shore. And sure enough Jesus restores him and calls him to encourage the brethren (“feed my lambs, tend my sheep, feed my sheep”).

Our faith will be tested again and again; what is the basis of what we believe and how far are we going to lead our lives premised on God’s word and promises? Only time and our lives will tell; but it is more for us to know and respond and to learn to return to God each time.

Trade-offs rather than solutions

Tom Bilyeu posted something insightful on Linkedin a few days ago that’s worth mulling over. He said, “There are no solutions, only trade-offs.”

And that the belief in a perfect solution can cap your growth as it paralysed you from making decisions as you wait for the perfect solution to come by. It may also be just because you are endlessly searching thinking that the ideal solution will emerge.

Yet when we do chance upon some things, we do recognise them as solutions. I realised that this is because we have priorities in most settings and it is the priorities that determine what we value more and what we value less. The trade-offs then allows us to exchange things that are less valued for things that are more valued. The ability to do so increases the overall value and hence becomes a ‘solution’.

There may be times when the things being traded off against are both valued – and then it takes that strategic mind, one that is able to look into different versions of the future to try and determine which elements in the trade-off is more important and would have lasting impacts.

Ultimately, there is no way one can navigate life and decision-making without the ability to prioritise things. If we see everything as equally important, we suffer from the plight of Buridan’s Donkey and never get anything done.

My artist self

There seems to be some conventional or prevailing wisdom about people having to keep to their lanes in different ways. So there are so-called norms for being a worker, being a father, a brother, a son and so on. Overlay that with the dimension of culture, including heritage and religion, you get a different set of different norms that as an individual, you are expected to display.

And so all my life I’ve somehow been defying classifications. One of the big divisions in school I had was between a ‘science’ student and an ‘art’ student. In high school, I defied that classification by doing arts (not just humanities but even fine arts, digital arts, and film) alongside all of the sciences (biology, physics, chemistry). When I entered junior college, I took two science subjects and two arts subjects as my main subjects.

And when it came to college, I just had to go to a school that offered a Bachelor of Science (BSc) in Economics when in most places, Economics was considered a Bachelor of Arts (BA). And then in my masters of economics, despite joining the advanced mathematics course, I also did a module in Economic & Business history.

I often recognise the value and importance of arts despite being an economist and finding it difficult to quantify the value that arts generate. Life in Singapore has become so draining and taxing on the human spirit often because we don’t know how arts play a role in helping us recover and restoring dimensions of our lives that we fail to see or identify. In recent times, as I caught plays from Checkpoint theatre and various films or shorts produced by Singaporeans about life in Singapore, even poetry that is written about life (eg. Government Haikus), I begin to see more and more that we all need arts more than we know. It could well be what will keep us alive.