600km Walking Pilgrimage through Spain

Written by Denise Chng Lisan & published on September 2 2008

From the moment I discovered an ancient pilgrimage path in Spain in June last year, the attraction of walking hundreds of kilometres towards an assured destination grew on me daily. My eagerness to go on a month-long journey on foot across the steep slopes, lush valleys and forests of the Pyrenees, and through countless small towns and villages, was part of a subconscious quest to find depth and meaning in my life. At the age of 33, I was approaching – prematurely, perhaps – what seemed to be a mid-life crisis.

Straits Times Life! Article,Denise Chng Lisan,Camino de Santiago,Camino Frances

Letter from Quebec: Preserving Heritage

Written by Denise Chng Lisan & published on November 8 2008

'TRAVEL is more than the seeing of sights; it is a change that goes on, deep and permanent, in the ideas of living,' wrote Miriam Beard. Life in Quebec is now my teacher, pointing out my knowledge gaps and honing my ideas of living - be it language, culture, life-skills, or the environment.

Denise Chng Lisan

Black Monday

Posted by Denise CHNG Lisan On Tuesday, September 16, 2008
The spokes of the financial wheel are broken. With the meltdown on Wall Street, we see billions of dollars literally melting away, revealing an ugly reality that was hidden behind hyped-up optimism and excessive greed.

It was exactly ten years ago, when I was a young investment banking analyst with Merrill Lynch New York in the mergers and acquisitions division. It was then the height of investment banking era, when companies were bought and sold, and bought, and then sold again. Investment banks, and its bankers, were like big brothers of the streets, calling their own shots by throwing their weight, and their money, around. Commercial banks were the stable and boring cousins, and not as sexy.

So, when I read about Black Monday - the bankruptcy of Lehman and the takeover of Merrill – my mind reeled from this unfolding nightmare. The indomitable has fallen.

It all started from sub-prime housing mortgage crisis in the US, when banks started lending money to people who are not creditworthy. They combined and turned these mortgage debt into certificates (called securitisation) and sold them to other banks and institutions. These other banks and institutions also bought insurance against their investments, implicating insurance companies who have no idea now risky these debts were in the first place. Investment banks, whose model is to leverage on capital to make financial returns, took bigger and bigger risks, took on more liability to make more money. Valuations became higher, more optimistic, more unjustifiable. Bankers are incentivized to make surplus profits and take excessive risks. Their incentives are not aligned with the better good of the entire economy, for the long run. Like big machine oiling itself on optimism (and greed), the cycle repeats itself over into a huge balloon.

Because it is a huge machine with many parts, any weakness in the chain is not felt until the problem is really huge. The bankruptcy of Lehman is a manifestation of the problem which has been growing. At some point, the bubble has to burst.

And this time, Uncle Sam isn’t helping. He says.

It’s a tricky problem, because why should Uncle Sam use taxpayers’ money to support private sectors’ mistakes. But if Uncle Sam does not step in, the consequences will be more severe around the world, affecting more lives in foreign nations than it already is. As it is, it is people like you and me who end up paying for someone else’s mistakes. We will know in due time how we are going to pay for this.

When I was young, my mum taught me not to buy anything I cannot afford. But in business school, I once learned that using OPM is a smart thing to do. OPM stands for “Other People’s Money”. “Leverage”, which means borrowing money to make money, is one of the hottest word and concept in the business world. Even at the individual level, buying on credit, on mortgage, on loans, is the norm these days. Shouldn't alarm bells ring, when we start receiving junk mails begging us to sign up for credit cards, or to take loans in cash?

After all that I learned, my mum is still right.

[This is the link to an article here, by a Nobel Prize winner economist, has a great commentary analysis of the financial crisis and how we can prevent it from happening again.]

0 Response to 'Black Monday'

    Ave Maria - Lourdes, France

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