Source: Economist
UBS made public a summary of an internal investigation into the mistakes that led it to write down a total of $38 billion, the most by any European bank hit by the subprime crisis. The company laid most of the blame on positions taken by its investment-banking arm. To rebuild its fortunes, the Swiss bank is reducing the size of its investment-banking business to refocus on its private-client base.
Other banks added to the list of woes stemming from the mortgage markets. Credit Suisse, UBS's rival, swung to a loss in the first quarter largely because it took SFr5.3 billion ($5.0 billion) in writedowns. Bank of America said its first-quarter profit had fallen by 77% compared with a year ago, and that it would increase its provision for credit losses by $5 billion. Citigroup booked another $13 billion in writedowns and made a quarterly loss of $5.1 billion. And Royal Bank of Scotland said it needed to raise £12 billion ($24 billion), about a third of its market value, in a rights issue to help protect its core capital.
Total: USD 85 billion
Thursday, April 24, 2008
High food prices
I saw a media report that the price of wheat and corn increased by 60% over the past 12 months. The price of rice increased by more than 100%.
The large increase in food prices is partly due to reduced supply and higher real demand. But the large increase is exaggerated considerly by speculation by the hedge funds. Ordinary people now start to hoard the grains, contributing to the speculative fever.
Like all speculation of this kind, the bubble will burst and the prices will come down to the correct market level. It will be higher than 12 months ago, but should not be at the high levels today.
My advice: buy enough rice to meet your family needs. Do not engage in the speculation and hoarding. If you do, be prepared to suffer a loss when the market drops.
The large increase in food prices is partly due to reduced supply and higher real demand. But the large increase is exaggerated considerly by speculation by the hedge funds. Ordinary people now start to hoard the grains, contributing to the speculative fever.
Like all speculation of this kind, the bubble will burst and the prices will come down to the correct market level. It will be higher than 12 months ago, but should not be at the high levels today.
My advice: buy enough rice to meet your family needs. Do not engage in the speculation and hoarding. If you do, be prepared to suffer a loss when the market drops.
Peter Drucker: Innovation
This is what Peter Drucker said about "innovation".
Innovation is an important function of a business. It has to innovate to provide for different needs of the customers.
It is not enough for a business to just provide a product or service. It has provide better and more cheaply. It is not necessary for a business to grow bigger, but it has to grow better.
Innovation may result in a lower price, but it may also result in a new and better product, a new convenience, or a new want.
Innovation results in a different product or service, and creates a new potential of satisfaction. It may be to find a new use for an old product.
Innovation is not invention.
Innovation is an important function of a business. It has to innovate to provide for different needs of the customers.
It is not enough for a business to just provide a product or service. It has provide better and more cheaply. It is not necessary for a business to grow bigger, but it has to grow better.
Innovation may result in a lower price, but it may also result in a new and better product, a new convenience, or a new want.
Innovation results in a different product or service, and creates a new potential of satisfaction. It may be to find a new use for an old product.
Innovation is not invention.
Innovation is easy and fun
FIRST POSTED IN SEPTEMBER 2005
Joseph Tay wrote an article in Today paper on 12 September entitled "Why innovation is hard and scary". The article said that uncertainty and fear of failure prevent us from taking risk.
I wish to present a different view - "Innovation is easy and fun". Here are four points.
Point one. I define innovation as doing something that you have done before, but finding a new way to do it. The aim is to improve the results.
As you have done it before, you can get the benchmark from the "old way". This benchmark can be used to compare against the "new way". If you can get better results, then the new way is better.
You will find it fun to get better results through innovation. Many people will love the challenge.
Innovation is different from creativity. Creativity means doing something that has not been done before. It is more difficult to handle. Innovation is easier.
Point two. To get better results, you will have to try many times. You have to face uncertainty - will the new way can produce better results? How to convince the boss?
Do not try to find the answer through planning or through theory. Try it out and see if it works. If not, try a different way. Be ready to try many times, and to measure the results.
Remember, Thomas Edison had to try 1,000 times before he found the right way to produce a light bulb.
I encourage "do, learn , adapt". You can learn best by experimentation. Because you have to t ry many, many times, it is better to act promptly. Do not spend too much time in analysing.
Point three. Do not ask for approval from your boss or from civil servant (if some government regulation might be involved). Be ready to trust your judgement.
If you ask for approval, the next person need to be familiar with the task before they can decide. They probably know less about the innovation than you. So, it is better for you to decide.
A well known sports manufacture has the slogan, "Just do it".
Point four. What happens if the change involve a high level of risk that can cause business failure?
If this is the case, you can try a pilot project. Try it on a small, experimental scale. If the pilot project works, you can present it for approval by your boss. By that time, you are convinced, and it will be quite easy to convince your boss on making the big bet.
Conclusion. I hope that my four points on innovation will be helpful to encourage people to be willing to innovate, and to improve. It can be easy and fun.
Tan Kin Lian
Joseph Tay wrote an article in Today paper on 12 September entitled "Why innovation is hard and scary". The article said that uncertainty and fear of failure prevent us from taking risk.
I wish to present a different view - "Innovation is easy and fun". Here are four points.
Point one. I define innovation as doing something that you have done before, but finding a new way to do it. The aim is to improve the results.
As you have done it before, you can get the benchmark from the "old way". This benchmark can be used to compare against the "new way". If you can get better results, then the new way is better.
You will find it fun to get better results through innovation. Many people will love the challenge.
Innovation is different from creativity. Creativity means doing something that has not been done before. It is more difficult to handle. Innovation is easier.
Point two. To get better results, you will have to try many times. You have to face uncertainty - will the new way can produce better results? How to convince the boss?
Do not try to find the answer through planning or through theory. Try it out and see if it works. If not, try a different way. Be ready to try many times, and to measure the results.
Remember, Thomas Edison had to try 1,000 times before he found the right way to produce a light bulb.
I encourage "do, learn , adapt". You can learn best by experimentation. Because you have to t ry many, many times, it is better to act promptly. Do not spend too much time in analysing.
Point three. Do not ask for approval from your boss or from civil servant (if some government regulation might be involved). Be ready to trust your judgement.
If you ask for approval, the next person need to be familiar with the task before they can decide. They probably know less about the innovation than you. So, it is better for you to decide.
A well known sports manufacture has the slogan, "Just do it".
Point four. What happens if the change involve a high level of risk that can cause business failure?
If this is the case, you can try a pilot project. Try it on a small, experimental scale. If the pilot project works, you can present it for approval by your boss. By that time, you are convinced, and it will be quite easy to convince your boss on making the big bet.
Conclusion. I hope that my four points on innovation will be helpful to encourage people to be willing to innovate, and to improve. It can be easy and fun.
Tan Kin Lian
Innovation
From: Wikipedia
The classic definitions of innovation include:
* the act of introducing something new (American Heritage Dictionary).
* the introduction of something new (Merriam-Webster Online)
* a new idea, method or device (Merriam-Webster Online)
* the successful exploitation of new ideas (Department of Trade and Industry, UK).
* change that creates a new dimension of performance (Peter Drucker)
* the process of making improvements by introducing something new
In economics, business and government policy, the "something new" must be substantially different, not an insignificant change. In economics, the change must increase value, customer value, or producer value. Innovations are intended to make someone better off, and the succession of many innovations grows the whole economy.
The term innovation may refer to both radical and incremental changes to products, processes or services. The often unspoken goal of innovation is to solve a problem.
Innovation is an important topic in the study of economics, business, technology, sociology, and engineering. Since innovation is also considered a major driver of the economy, the factors that lead to innovation are also considered to be critical to policy makers.
Views from Tan Kin Lian:
Innovation is doing something new. It is a change to an existing process, and is able to bring significant improvements. It does not need to be perfect; it only needs to be significantly better. This approach, "to be better, not perfect" can encourage people to act promptly to introduce innovation.
The classic definitions of innovation include:
* the act of introducing something new (American Heritage Dictionary).
* the introduction of something new (Merriam-Webster Online)
* a new idea, method or device (Merriam-Webster Online)
* the successful exploitation of new ideas (Department of Trade and Industry, UK).
* change that creates a new dimension of performance (Peter Drucker)
* the process of making improvements by introducing something new
In economics, business and government policy, the "something new" must be substantially different, not an insignificant change. In economics, the change must increase value, customer value, or producer value. Innovations are intended to make someone better off, and the succession of many innovations grows the whole economy.
The term innovation may refer to both radical and incremental changes to products, processes or services. The often unspoken goal of innovation is to solve a problem.
Innovation is an important topic in the study of economics, business, technology, sociology, and engineering. Since innovation is also considered a major driver of the economy, the factors that lead to innovation are also considered to be critical to policy makers.
Views from Tan Kin Lian:
Innovation is doing something new. It is a change to an existing process, and is able to bring significant improvements. It does not need to be perfect; it only needs to be significantly better. This approach, "to be better, not perfect" can encourage people to act promptly to introduce innovation.
Declaring a benign cyst
Should a benign cyst be declared to the insurance company? Here is the advice from a doctor.
There are several types of breast cysts. Some do not have increased risks of malignacy and some do It is best for the applicant to re-declare the condition.
The applicant should obtain a copy of all her results from her attending physician and submit these resuts to the underwriter. It will be useful if she can also ask her attending physician to provide a short note of the diagnosis, when it was diagnosed and how the progress has been since being diagnosed.
Usually these patients are reviewed at least once a year and ultrasound will be done at reveiws to check on the progress. If the condition has been present for several years and nothing has happened, it is less likely to be any condition that will give rise to increased mortality.
There are several types of breast cysts. Some do not have increased risks of malignacy and some do It is best for the applicant to re-declare the condition.
The applicant should obtain a copy of all her results from her attending physician and submit these resuts to the underwriter. It will be useful if she can also ask her attending physician to provide a short note of the diagnosis, when it was diagnosed and how the progress has been since being diagnosed.
Usually these patients are reviewed at least once a year and ultrasound will be done at reveiws to check on the progress. If the condition has been present for several years and nothing has happened, it is less likely to be any condition that will give rise to increased mortality.
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