Saturday, May 10, 2008

Lee Kuan Yew Wrong Again! This Time, It's Oil.

Two months ago, Lee Kuan Yew, Minister Mentor of Singapore and Chairman of GIC, made the following statements about oil prices, as reported by the Straits Times:
Oil prices 'unlikely to rise further'
March 8, 2008 (Straits Times)

OIL prices are not likely to go higher, Minister Mentor Lee Kuan Yew said yesterday.

As crude oil prices hit US$105 (S$145) per barrel,
MM Lee believes it is not likely to creep further up to US$110.

'The oil suppliers are testing the limits. They believe that China and India now form a new long-term base demand. They may be right,' he said.

'I don't think it can go up US$110, US$120, US$150 and the world economy goes on. Inflation will go through the roof.

'Economies of the West will go down, hyper-inflation in many developing countries. So it will go into reverse. There's no projection right to the end.'
Well, shortly after Lee Kuan Yew's pronouncement, Oil prices shot up above $110, and today is trading at above $125.

(Image courtesy of theenergycollective)

On top of that, just a few days ago, respected Goldman Sachs Analysts have predicted that oil could spike up towards $150 and even maybe $200!
Goldman Says Oil `Likely' to Reach $150-200 a Barrel
By Nesa Subrahmaniyan

May 6 (Bloomberg) -- Crude oil prices may rise to between $150 and $200 a barrel within two years because of a lack of adequate supply growth, Goldman Sachs Group Inc. analysts led by Arjun N. Murti said in a report.

``The possibility of $150-$200 per barrel seems increasingly likely over the next six-24 months, though predicting the ultimate peak in oil prices as well as the remaining duration of the upcycle remains a major uncertainty,'' the Goldman analysts wrote in the report dated May 5.

Global fuel demand growth is outpacing gains in output. China, the world's fastest growing major economy, has more than doubled oil use since New York crude dropped to this decade's low of $16.70 a barrel on Nov. 19, 2001. That's soaked up most of the world's spare capacity amid supply cuts in Nigeria, Iraq and Venezuela.
Well well, wrong again, Mr. Lee Kuan Yew.

Wrong on energy, and wrong on banking.

Not only are the industry's most respected analysts holding opinions diametrically opposite to you, the world's most respected investors, such as Warren Buffett and Jim Rogers, have also made the opposite investment decisions compared to you.

Seriously, what is Lee Kuan Yew doing as the Chairman of GIC, Singapore's $300 billion investment fund? The man isn't qualified for the post!

Lee Kuan Yew vs Warren Buffett: Part 2
Lee Kuan Yew Ain't No Warren Buffett
GIC, UBS & Jim Rogers


Anonymous said...

LKY will never admit GIC mistakes because he has already given himself 20-30 years to prove that he is right.

Anonymous said...

Out of so many comments he is bound to be correct in a few instances. If it is wrong, just sweep it under the carpet.

gary teoh said...

20/30 years time, he is no more in this earth,does not matter right or wrong

Anonymous said...

He's just a used car salesman who knows nothing about the product that he's selling. Piece of shit.

Anonymous said...

Hi Gary Teoh;

it matters a lot to his offsprings, but he won't be around to be responsible to anybody or for anything.

He could outsmart himself, a moment of folly could destroy many things, including ones' credit.


Anonymous said...

His deputy at GIC was recently reported saying that the global recession would be the worst in many decades. A few days later, he "clarified" that this was a worst-case scenario of GIC, not his.

A couple of days ago, SWF would have a more difficult time managing their reserves in light of the global credit crunch.

I can only conclude three things from these:-

One, why all these gloomy outlook now after investing billions in UBS and Citicorp? This sounds like a case of preparing the ground for investments gone wrong.

Two, when liquidity was high investment risks were higher, not lower. With credit supply coming down, the returns are higher or much higher and reflect risks better. The global liquidity crunch would present opportunities for true investors, especially those with access to ample funds (like SWF).

Three, these pronouncements from GIC are worrying for Singapore. It calls into questions, the real reasons for the large investments and timing.

Thanks to UWT for monitoring such developments.


gary teoh said...

who give green light to all these investment ? president?guardian of our reserve ? parliament ? PM? who?,we citizens got the right to know!!

Anonymous said...

gary teoh,

When it comes to profit and credit, the coffers, the coffers blatantly admit their responsibility and claim their reward. When it is blunder or loss, suddenly no one is responsbile like Selamat's sage. NATO. Pretending to be responsible but in the end no one responsible.

Happily living forever with iron-rice bowl.

By the way, they use whatever light they choose, don't have to be green light. Ah Loong use Pinkish light to siam responsbility and accountability.

Shingo T said...

No man is perfect I guess. Think LKY uses gut feel and logic more than data.

Anonymous said...

You guys are too hard on LKY. There are other prominent figures who have predicted otherwise too, most notably Steve Forbes, who predicted in 2005 when oil prices are around US$70pbl that prices will fall to around US$35 within a year. He also said that if it hits US$100pbl, prices are going to crash even more spectacular. Well, everyone knows the story after.

Anonymous said...

My friends. What is the oil price now? He was wrong at the limit but was spot on when it comes to trend because he understand macro and human nature. That man is wise. Even if you dont like him, you must respect him. His CPU is far superior to most of us.

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