Financial Institutions in Singapore Are Strange

Here are a few things I don't like about financial institutions in Singapore:

1. They insist on seeing a passport instead of the Singaporean government's own photo ID card (which every resident must have and which is valid for all sorts of official purposes). Do they really think that a passport issued by, for example, the Tanzanian government is more authoritative in Singapore than Singaporean government-issued ID? It's bizarre.

2. They ask for your "overseas address" if you're not a Singaporean. I live in Singapore, 100% of the time. I neither own nor rent any real estate outside Singapore, nor does my wife. Why should we? We live in Singapore. And when I point out that simple fact, they still ask for an overseas address. I gave one bank the address of the civil records office where my birth certificate is kept, and I explained what I was doing. They didn't like that, but what exactly am I supposed to do? Would they prefer the address of a Holiday Inn overseas? Or the address where my second cousin-in-law lives?

3. One bank -- and there may be others -- simply refuses to issue a credit card to anyone who is not a Singaporean citizen or permanent resident. You could show up with impeccable credit (like mine), and it simply wouldn't matter. Those are the rules, and in Singapore we follow the rules. I should point out that this particular bank isn't even headquartered in Singapore, so it can't even issue a credit card to its own country's prime minister. But did I mention the rules?

4. Using a Singaporean credit or debit card outside Singapore is expensive -- 2.5% or higher markup -- with the possible exception of a Diners Club card issued in Singapore. Singapore is tiny, so practically every Singaporean travels outside Singapore. You can take a city bus or taxi to Malaysia or a quick ferry to Indonesia, after all. It's actually cheaper for me to use, say, a U.S. credit card and move funds from Singapore to the U.S. to pay the credit card bill. And, with at least one bank, it's cheaper to withdraw cash at an ATM outside Singapore and spend that instead of using a credit card issued by the same bank. Crazy isn't it?

5. Speaking of foreign transaction fees, shame on the Monetary Authority of Singapore (MAS) for not mandating much more clear disclosures about such fees. I found one bank that simply doesn't disclose such fees even in their fine print unless you specifically ask a bank employee. And then is that information accurate?

6. It's extremely expensive to invest in mutual funds, stocks, bonds, etc. in Singapore. Management fees are both poorly disclosed and ridiculous -- 2% per annum is on the low side. Trading fees are also ridiculous. Again, it's far cheaper to move money to, say, the U.S. and to buy financial investments there. A company like The Vanguard Group could do extremely well in the retail investment market in Singapore.

What Microsoft Should Do to Recover from Windows 8

Microsoft is struggling to cope with the rise of much bigger non-Microsoft application ecosystems among smartphones and tablets, notably Apple's iOS and Google's Android. While the PC won't "die" in the near term, it's no longer the center of the client computing universe.

With the release of Windows 8, Microsoft has tried to graft a mobile-appropriate user interface that hasn't proven popular atop its franchise desktop and laptop operating system. The result is a disaster that pleases almost no one. It's a technical approach to solving a fundamental business model problem, a problem that Microsoft must address.

As part of the solution, Microsoft ought to consider introducing a base edition of Windows that's genuinely free. Microsoft badly needs to preserve and to extend its application ecosystem, and that's much easier to do if that ecosystem continues to be popular. Apple and Google both offer free ecosystems: iOS and new iOS versions are free with every applicable Apple hardware purchase, and Android is just plain free provided the device manufacturer maintains preferential placement of Google's content services. That's not a problem for Android device manufacturers because Google's content is extremely popular and useful.

Free Windows? Am I crazy? No, not at all. To pull it off, though, Microsoft would need to establish two boundaries in the right places. The first boundary is what level of function to include in the free base Windows package -- more on that in a moment. The second issue is that Microsoft needs to beef up the range and value of optional add-ons available through the application store. In other words, Microsoft needs to offer compelling content that Windows users will want to buy using their free base Windows. Right now Apple is doing a better job in that area. Apple's customers know that the base package offers exceptional value, but then most of them happily buy more. Getting the boundaries right between "free" and "paid" is critical, and Microsoft needs to do a better job in that area.

So here's what a free Windows 8 would include:

1. A smaller download that can install from a 1 GB USB memory key. That would be more than enough to get onto the Internet to perform Internet browsing (but only after applying the latest critical security patches for that purpose) and, optionally, to install the remainder of base Windows.

2. Full English plus a multi-lingual post-install panel to allow users to install any language pack from the Internet.

3. Support for a maximum of two SATA/IDE hard disks, both with full disk encryption if the user desires. (Full disk encryption could be one of the free downloadable features.) USB-attached hard disks and memory keys would be unlimited.

4. A 32-bit version only, with unlimited PAE support, provided that there's a mechanism for the user to pay for an in place upgrade to 64-bit Windows without losing data and settings.

5. No Windows Media Center, IIS, or domain login.

6. Limit of 5 visible user logins. Applications could still create more user IDs for their purposes, but only 5 would be available to choose at the login screen.

7. Reduced accessories and games collection.

8. Mandatory activation via e-mail verification. (Users could opt out of Microsoft's e-mails after that, though.)

9. Support for a maximum of one CPU socket and a maximum of 3 cores.

10. Basic backup, but with support for encrypted/compressed backup to network and cloud drives. (Cloud storage above a certain amount would be chargeable.)

11. Remote desktop to a Windows phone or Windows tablet (single session at a time).

12. Ability to share a maximum of two printers and two network folders at a time.

13. DVD playback (sans Dolby).

14. Single monitor.

15. User interface cleanup.

That's essentially a mixture of Microsoft's previous "Starter" and "Home" (probably "Home Basic") Windows editions. And that's just about right.

Denise Rich's Lawyer: Transparent Bullshit Artist

After Facebook co-founder Eduardo Saverin renounced his U.S. citizenship, Denise Eisenberg (formerly Denise Rich) did the same. She'll save millions in U.S. taxes, but more on that in a moment. Her attorney said that she made the move "so that she can be closer to her family and to Peter Cervinka, her long-time partner."

Bullshit. Ms. Eisenberg is an Austrian citizen and was also a U.S. citizen. She was already living in London with her "partner" based on her EU citizenship. Possession of U.S. citizenship in addition in no way limited her ability to do so. (They aren't living in Havana.) Evidently her lawyer thinks we're fools, and shame on CBS News for not pointing out that her lawyer is a liar. "He said, she said" stenography is not journalism. Saverin's "explanation" for his renunciation was also 100% bullshit.

As for her U.S. tax savings, perhaps. But, like Saverin, she'll now become a pariah in the world's largest economy, an economy with enormous wealth generation opportunities for wealthy people. Even if you're a completely self-obsessed selfish bastard, losing all physical access to the U.S. is a mighty big price. And yes, she (and Saverin) lost access. Justifiable U.S. citizen outrage will make sure of it, and existing law already provides that option to U.S. immigration authorities. Eisenberg will never be able to walk along Park Avenue, shop on Rodeo Drive, or attend an exclusive party in New York City ever again.

Today Greeks vote to decide their national government for the second time this year. SYRIZA, an anti-bailout/anti-austerity party, stands a chance of winning outright.

In my view that'd be a healthy outcome. Policymakers around the world have committed egregious economic malpractice for years. Most western economies need massive jobs programs, with direct government hiring of every woman and man who wants to work. Then that workforce would repair and rehabilitate everything possible: transportation and utility infrastructure, hospitals, schools, post offices, parks, etc., etc.

There's a global depression afoot, with unemployment rates soaring. As with most Greek voters, I'm tired of policies that ignore the massive joblessness and pleas that there's little that can be done. That's bullshit. Hire idle workers, dammit, and do it now. Fire up the Works Progress Administration, the Civilian Conservation Corps, and other programs like them. Fix America, and fix Europe, literally.

Fixing the Federal Budget

Although there are countless "pundits" who pretend otherwise, it's astonishingly simple to repair the U.S. federal budget:

1. Restore corporate and personal income taxes to early Reagan Administration levels.
   
2. Treat capital gains exactly the same as any other income, albeit with capital gains indexed to inflation.
   
3. Treat estate transfers exactly the same as any other income, with $3 million (indexed to inflation) and spousal exemptions.
   
4. Eliminate the "carried interest" and related loopholes.
   
5. Introduce a 40% tax rate plus time limitations on non-repatriated corporate earnings, less credit for foreign taxes paid.
   
6. Offer states and localities centralized federal collection of their corporate and personal taxes. They could set a single percentage based on federal taxes owed. Residents of states that choose not to participate would default to 3%, which the federal government would keep. Whether participating or not, states and localities would still be free to levy their own taxes.
   
7. To reign in healthcare spending (and improve outcomes), open up the Veterans Affairs and Medicare health insurance programs to all Americans.
   
8. Extend Social Security contributions so that there's no income cap and so that all forms of income are included. Also exempt the first portion of income (e.g. the first $15,000, indexed to inflation).
   
9. Cap defense spending at 4.0% of GDP for 5 years then 3.5% of GDP thereafter, with exceptions only permitted if the U.S. Congress passes a formal declaration of war against a specifically named country, if the excess funds are dedicated to that narrow purpose, and if Congress renews that declaration every 24 months.

Family Security: Society's Choice

I don't generally pine for the "good old days" which really weren't so good. However, I am profoundly concerned about the persistent attacks against social insurance in all its forms around the world. (The exceptions, ironically, can be found in the Middle East.)

Let's start with some basic principles. Freedom is good. However, poverty and infirmity are antithetical to freedom. Serfs living 1,000 years ago in Europe weren't free mostly because they were poor and constantly at risk of utter destitution and starvation, not because the lords cared much about which songs they sang.

So why, 1,000 years later, in the developed world, do I worry about much the same problems? Why are so many people one illness away from bankruptcy? One spouse's untimely passing away from poverty? One lawsuit away from financial ruin? There are myriad risks, and many governments seem hell bent on dismantling what little social insurance exists. The private insurance market is flawed in many ways, and it's difficult or impossible to insure against these calamities without government.

As one example, consider disability insurance in Singapore. If your employer is typical, and if you have a job of course, you would receive a maximum of two years' salary if you become disabled and cannot work. If you're disabled for 10 years or for a lifetime, tough. You had better hope that someone in your family or a charity takes pity on you. And that's in Asia's most developed economy excluding Japan.

But "we can't afford social insurance." Rubbish. This is a world in which Mark Zuckerberg is a billionaire , but he will pay a far lower tax rate than his company's employees. Developed countries are comparatively wealthy. Decent social insurance is an affordable choice. It also happens to be consistent or even essential to upward mobility and entrepreneurship.

America: The Not-So-Grim Truth

A relative e-mailed me a link to this blog post by Lance Freeman: America: The Grim Truth.

I take issue with several of the author's assertions. As examples, many developed countries don't have single-payer healthcare systems, and, while a lot of tax dollars go to the Pentagon, it's not 70% of them. The factual mistakes make it harder to take the author seriously. Also, people simply have different preferences. If you love musical theater, or skiing, or recreational aviation, or somebody of the same gender, you aren't going to choose, say, Singapore if you have a choice. Different countries have different attributes. The United States isn't everybody's favorite, but nor is Switzerland.

That said, I agree with the author in one narrow respect: the United States (and its government) are generally headed in the wrong direction. In the U.S. there's growing inequality, decreasing financial security, and increasing threats to civil liberties. Those disturbing trends tend to make the United States relatively less attractive as a place to live, work, and vacation, if you have other choices and other things being equal.

I'm an optimist, and I wouldn't bet against the United States yet. The world's oldest democracy has shown an amazing ability to correct its course.

R.I.P. Nokia

My first mobile phone more than 15 years ago was a Nokia. So was my second. And I've had some other Nokias along the way. I preferred Nokias. Most recently I had a Nokia E55, but it couldn't handle Japanese. So I switched to an iPhone 4 which could.

Nokia has now announced a new partnership with Microsoft. Nokia's new smartphones will run Windows Phone. Since the entire mobile phone market is moving to smartphones — today's smartphones are tomorrow's dumbphones — that really means Nokia is betting the company on Windows Phone. Unfortunately Nokia won't have any Windows Phone products available until the end of this year, and also unfortunately Windows Phone has completely failed to ignite any interest in the market. Google's Android, RIM's Blackberry, Apple's iPhone, and even HP/Palm's webOS and Samsung's Bada platforms are all doing better than Windows Phone.

Nokia's stock took a big hit immediately after the announcement, and the stock market is correct. It's hard to see how the affiliation with Microsoft will rescue Nokia. What has to be scary for Nokia is that Microsoft has been trying to crack the mobile software market for more than a decade, and Microsoft has literally been stuck in reverse. Microsoft's earlier efforts had higher marketshares than today's Windows Phone.

The trends are even more ominous for Nokia. According to IDC, and looking at the entire mobile phone handset market (including smartphones), Nokia's unit share fell from 37.2% in 4Q2009 to 30.8% in 4Q2010. More importantly, Nokia's revenue and profit shares fell even faster. Apple, with only about 4% unit share, collects about half the industry's profits. ZTE (who?), a Chinese manufacturer, came out of nowhere, primarily at Nokia's expense, and shipped 4.2% of all handsets in 4Q2010.

Another problem Nokia has is that its developer community is, understandably, incensed. Nokia is abandoning its own Qt, a cross-platform application environment which is widely popular with developers. Now developers who might want to create applications for Nokia's new handsets will have to learn a completely new development environment for Windows Phone, and the applications they've already created won't be portable. If developers have to re-learn and re-program their applications, why wouldn't they just move to Apple's iOS and/or Google's Android? It appears that's exactly what they are doing.

Nokia had to do something to change course. But if this partnership is Nokia's best remaining hope, Nokia is in big trouble.

Japanese on a Mobile Phone?

Did you know that the vast majority of mobile phones sold in the world cannot even display Japanese characters, never mind allow Japanese text input? It's shocking, really, that devices built to foster communication cannot cope with most Asian languages without some serious hacking at best. You cannot even read Japanese or Korean text messages! This serious shortcoming applies to Blackberries, Symbian devices (Nokias), Android, and even the latest Windows Phone devices.

There's one notable exception: the iPhone. The iPhone has fantastic Asian language support, out of the box. Bravo, Apple.

Back to the Mac

If the rumor sites are to be believed, Apple is going to introduce a new MacBook Air next week. I was quite interested in the first MacBook Air, but Apple compromised that system in ways I didn't like. There isn't enough hard disk space (or equivalent) available, the single USB port is too limiting, and the 2GB RAM limit is also a big problem. But it's thin. So what?

I'm still a good candidate for a lighter, easier to carry Mac. But I don't want to see too many compromises. Here's what I'd like to see in this baby Mac:

1. At least 200GB of hard disk space (or equivalent);
2. At least 2GB of RAM standard, expandable to at least 6GB;
3. A pair of USB ports, one of which is USB 3.0;
4. Mini DisplayPort;
5. 12.1 inch screen preferred;
6. A lock slot (to secure the machine to a desk);
7. Under 3 pounds.

Almost goes without saying: Bluetooth, 802.11n wireless, iSight, and fixing the headphone jack so that there's an iPhone-style microphone-in channel in the same connector. Nice to have: a memory card slot and a built-in ethernet port. (Road warriors still use ethernet.) Maybe Apple can do something funky-but-smart like put the ethernet port on the power brick. I'd also like to see Apple add a little functionality to the Air's bootstrap code to allow installing Mac OS X from Apple's cloud in addition to installation from a local shared network drive.

Apple could use SSD, but it's still expensive. How about the new 7mm high 2.5 inch hard disks from Hitachi and/or Seagate? Those are available up to 320GB in size, and they would allow Apple to keep the costs down and the machine profile thin.

UPDATE: So how did Apple do? Not well enough, so I'm not going to be buying one of the new MacBook Air machines:

1. A 256GB flash drive is an option only on the 13.3 inch model, and it's expensive. The 11.6 inch model tops out at 128GB.
2. Memory is only expandable to 4GB, and only at the factory.
3. No USB 3.0 yet.
4. Yes.
5. Apple bracketed the 12.1 inch screen size with 13.3 and 11.6 inch screen models.
6. Still no lock slot.
7. Yes, under 3 pounds.

The "almost goes without saying" parts are all there. The 13.3 inch model got a memory card slot, but neither model got a built-in ethernet port (or ethernet on the power brick). Both models come with a flash card containing Mac OS X for recovery.

Then there's price. To buy a MacBook Air with the attributes I want (if I could tolerate 4GB RAM maximum) would be $1699 list price (and another $29 for the ethernet dongle cable). That's quite steep. Too steep.