Lee Kuan Yew is Full Of Crap

Lee Kuan Yew is all over the news today, talking about GIC's 25% loss. In particular, he has been defending GIC's investments in the banks. I've written extensively about these investments, but MM Lee's latest attempts and defending GIC are some of the crappiest shit I've seen in a while.

Damn it - I'm just absolutely fed up with Lee's crap. For goodness sake already, just own up and admit that GIC did not have a clue.

MM Lee was quoted today in the Business Times, saying:

'We became cash-rich and when the market fell, we went into UBS and Citi,' he said. 'But we went in too early. That's part of the ride.'

...

'How could we have known this was the extent of the damage? You look at all the big-name banks - they have gone down, misjudged the situation, ruined their careers,' Mr Lee said.

Here's the octogenerian politician, trying to wriggle his way out by claiming that GIC could not have known the extent of the damage. He blames the big-name bankers for ruining their careers, and says its all "part of the ride".

Well, thats a bucketload of bullcrap.

You want to know how you could have "known the extent of the damage", Mr Lee?? I'll Tell You HOW!!!



1. In March 2007, noted economist Nouriel Roubini warned the world that the US housing market was going to decline in 2007, and that it was going to decline even more in 2008.

In March of this year this author published a long paper (with Christian Menegatti) titled “The Housing Recession is Still Far from Bottoming Out” that predicted a much worsening housing recession through all of 2008. In that paper the prediction was that housing starts – that had already fallen by 38% by January of 2007 to a level of 1.4 million - would fall much further and would bottom out at 1.1 million in 2008. Indeed, by looking at previous housing recession – where the average fall in starts was 51% - it was sensible to be that pessimistic. Again those predictions were dismissed as too gloomy and pessimistic and unrealistic.

2. In October 2008, John Paulson, the top performing hedge fund manager, wrote a note to investors saying that the drop in housing prices still had a long way to go.

"Home prices nationwide have only fallen 3 percent so far,'' Paulson & Co. writes in the quarterly letter to investors that was delivered in October. "We expect a peak-to-trough decline of 15 percent to 25 percent to bring home prices back in line with disposable income.''

3. I noted in April 2008 that Jim Rogers warned you clearly in MARCH 2008 that you were going to lose money on your bank investments.

"It grieves me to see what Singapore is doing. They are going to lose money," he added, referring to investments by Government of Singapore Investment Corp and Temasek in Citigroup, Switzerland's UBS and Merrill Lynch.

4. Morgan Stanley, as did several other commentators, warned in late April 2008 that the financial crisis was just beginning.

Morgan Stanley sees big bank woes just beginning
Monday April 28, By Joseph A. Giannone

NEW YORK (Reuters) - Morgan Stanley analysts on Monday told clients to "sell the rally" in financial stocks, slashing forecasts for big bank earnings and warning that the current credit crunch is only just beginning.

In aggregate, Morgan Stanley reduced its estimates for 2008 large bank earnings by $17 billion, or 26 percent, and reduced 2009 forecasts by $13 billion, or 15 percent. The analysts expect higher loan losses and expenses, offset by higher net interest income, though profits could fall further still if the Federal Reserve stops lowering interest rates.

"More capital hikes and dividend cuts (are) coming as our credit deteriorates and forward earnings decline," analysts led by Betsy Graseck wrote in a report. "We think we are only in the third inning of the credit cycle and expect this credit cycle will be worse than (the slump in) 1990-91."

Time and again, top economists, analysts and investors warned you and the world that mortgage carnage was going to happen.

Time and again you ignored these warnings and forecasts, invested in the banks, and refused to let go of your investments, even when they were turning sour.

And now you're asking "how could we have known"???

Absolutely Pathetic, Mr Lee Kuan Yew.

Absolutely Pathetic.