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Daily Archives: December 30, 2007

The liberal skew in American higher education

It's not suprising to me that American professors are more liberal than American population as a whole. "44 percent of professors are liberal, 46 percent moderate or centrist, and only 9 percent conservative. The corresponding figures for the American population as a whole, according to public opinion polls, are 18 percent, 49 percent, and 33 percent, suggesting that professors are on average more than twice as liberal, and only half as conservative, as the average American".
But why certain fields are more conservative than others are really puzzling (see table below, source: Neal Gross and Solon Simmons, “The Social and Political Views of American Professors”).  I am surprised to find that economic professors are not the most "conservative" ones, instead Accounting and Engineering professors are

For details, read Posner and Becker's blog on this. 


something about Singapore and her SWFs

source: WSJ

Little Island That Could

Singapore Aims to Stand Out
In Capital-Rich Asia
By Helping U.S. Firms

The tiny city-state of Singapore is trying to confirm its reputation as a global financial heavyweight by pumping its money into ailing Wall Street firms.

The latest indication: News that state-owned investment company Temasek Holdings Pte. Ltd. is in advanced talks to invest as much as $5 billion in Merrill Lynch & Co.

The financial district of Singapore.

Around the world, government-controlled investment companies like these — also known as "sovereign-wealth" funds — have been investing billions of dollars in the West's struggling financial institutions. Morgan Stanley recently announced a $5 billion investment from China Investment Corp., a Chinese-government-led fund. And Citigroup recently sold a stake in itself to an Abu Dhabi fund. A few months ago Chinese-controlled Citic Securities agreed to invest in Bear Stearns Cos.

Temasek's investment would be that fund's first major foray into U.S. assets. But a sister fund has already been shopping: The Government of Singapore Investment Corp., about two weeks ago said it will team up with an unnamed Middle Eastern investor to inject $11.5 billion into Swiss bank UBS AG, with the Singaporeans putting up around $9.6 billion of the total.

Significantly, many investments like these are in the form of minority stakes, rather than controlling stakes, presumably to diminish possible political fallout.

"I'm sure in their deliberations, they are thinking about how they will be received by their host countries and the public at large," says Mark Mobius, who manages emerging-markets portfolios for Franklin Templeton Investments.

Temasek itself learned a lesson about political risk recently after buying control of a Thai telecommunications company from the family of former Prime Minister Thaksin Shinawatra. Under terms of that deal, Mr. Thaksin's family avoided paying taxes on its profit. Public outrage over the incident in Thailand fueled antigovernment protests that ultimately led to Mr. Thaksin's ouster.

Both Temasek and GIC say they will be passive investors in Merrill and UBS. Yet their rapid-fire investments in recent weeks seem at least partly calculated to send the message that Singapore is a sophisticated financial player capable of deploying capital quickly.

In addition, with its investment in UBS — one of the biggest managers of wealth globally — GIC appears to push Singapore closer to its goal of establishing itself as a private banking hub.

The investments are part of a longstanding strategy by Singapore — a speck on the map near Malaysia, Thailand and Indonesia — to build its reputation as a global financial center as it struggles for influence with emerging regional powerhouses like China and India.

The island-state has long tried to woo regional financiers from Hong Kong by touting the city-state's cleaner air and more affordable housing. And whereas, in the past, Hong Kong has sometimes seemed to view a rising number of hedge funds in Asia with wariness, Singapore has offered seed capital to start-up managers.


Singapore has also sought to attract "knowledge" industries such as technology and biotech by offering tax breaks and a hands-off regulatory environment to global companies. And it promotes itself as a center of Islamic finance — significant given its proximity to Malaysia and Indonesia — as well as a financial stepping-stone for doing deals in India.

Singapore derives its financial muscle in part from decades of trade surpluses with the rest of the world, and a government-led investment strategy dating back to 1974, when Temasek was established as a holding company consisting mainly of stakes of state-owned Singaporean companies.

Starting with a portfolio of 354 million Singapore dollars (about US$243 million at current exchange rates) in 1974, Temasek's assets now total about S$164 billion, reflecting the city-state's own transformation from sleepy tropical port into a thriving hub of global finance and transport.

GIC, set up in 1981 to manage the country's foreign reserves, oversees "well above" US$100 billion in assets, according to its Web site.

Traditionally, it has shied away from taking large stakes in publicly traded companies. The recent UBS deal represents a major break with that policy.

Temasek's chief executive, Ho Ching, is an engineer by training with a graduate degree from Stanford University. She previously worked in the Ministry of Defense, later becoming CEO of Singapore Technologies Group. Ms. Ho also is the wife of Singapore's Prime Minister, Lee Hsien Loong, and daughter-in-law of its founding former prime minister, Lee Kuan Yew.

Under Ms. Ho, who took over Temasek in 2002, the company has pushed aggressively to diversify away from Singaporean assets into overseas markets, particularly financial services. It sank billions of dollars into state-owned Chinese banks before they sold shares to the public. Those deals have yielded spectacular profits amid a boom in Chinese shares.


Singapore Responds To Investment Article

Your article "Little Island That Could — Singapore Aims to Stand Out in Capital-Rich Asia by Helping U.S. Firms " (Money & Investing, Dec. 22) claims that Singapore is trying to confirm its reputation as a global financial heavyweight by having Government of Singapore Investment Corp. invest in UBS AG, and Temasek Holdings Pte. Ltd. in Merrill Lynch & Co. Both GIC and Temasek Holdings invest with the sole objective of maximizing long-term financial returns. They make investment decisions independent of Government and of each other. They do not invest to "send the message that Singapore is a sophisticated financial player capable of deploying capital quickly." Neither is it their job to "push Singapore closer to its goal of establishing itself as a private banking hub." The Government would, in fact, be concerned if either were "pumping its money into ailing Wall Street firms" for any non-commercial reasons.

Laurence Lien
Director of Governance & Investment for Permanent Secretary
Ministry of Finance