Building Creative Commons: The Five Pillars of Open Source Finance

AHOY, THERE BE A CLOSED SYSTEM THAT NEEDS OPENING!

This is an article about Open Source Finance. It's an idea I first sketched out at a talk I gave at the Open Data Institute in London. By 'Open Source Finance', I don't just mean open source software programmes. Rather, I'm referring to something much deeper and broader. It's a way of framing an overall change we might want to see in the financial system. To illustrate this, I set up an analogy between computer systems and economic systems, and I then explore what financial 'code' might be. I then sketch out the five pillars that could underpin an open finance movement.

Computer systems as economies

Computer systems are great metaphors for economic systems. That's because, in a sense, a computer is a microcosm of our economy, albeit one that is a lot more predictable and controllable. Economies, at some basic level, are based upon people using energy to extract useful stuff from the earth, using tools, procedures, systems of rules and labour to activate the earth's productive potential. Likewise, computer systems rely on taking inputs of energy (the computer plugged into the electricity grid) and combining it with software code (a kind of abstraction of human organisation), in order to activate the assemblage of physical hardware (signifying a latent productive potential) towards productive tasks, when willed to do so by a user of the computer.

We constantly interact with computers, but most people in the world do not perceive themselves as programmers of computers. They mostly perceive themselves as users of computers that others have programmed. And even if they wanted to dig deeper, they'd find that much of the software they use is proprietary, locked up in secretive, opaque, even obfuscated formations. Windows looks like a friendly interface, but you cannot see what it does, or how it does it. It's a useful intermediary interface between you and the inner workings of your computer, but it's also a hard-shelled barrier.

The Financial Status Quo: Power concentrated in intermediaries

Software code is the organising rule system that steers energy into activating hardware towards particular ends. So, extending this as an analogy, what might financial 'code' look like? A financial system, in a basic sense, is supposed to arrange for surplus resources (extracted from the earth), to be redistributed (in the form of money) via financial instruments (often created by financial intermediaries like banks and funds), into new economic production activities ('investments'), in exchange for a return over time.

Here, for example, is a rough financial circuit: A person manages to earn a surplus of money (a symbolic claim on real things in the world), which they deposit into a pension fund, which in turns invests in shares and bonds (which are conduits to the real world assets of a corporation), which in turn return dividends and interest over time back to the pension fund, and finally back to the person.

Shares and bonds are extractive financial conduits that plug into a corporate structure, but if you look for how they are coded, you'd discover they are built from legal documents that are informed by regulations, acts of parliament, and social norms. They are supported by IT systems and all manner of payments systems and auxiliary services.

But it takes more than clearly-worded documentation to be able to create financial instruments. The core means of financial production, by which we mean the things that allow people to produce financial services (or build financial instruments), includes having access to networks of investors and companies, having access to specialist knowledge of financial techniques, and having access to information. It's these elements that banks and other financial intermediaries really compete over: They battle to monopolise relationships, monopolise information, and to monopolise specialist knowledge of financial techniques.

And indeed, that's why production of financial services mostly occurs within the towering concrete skycrapers of the 'financial sector', spinners of the webs of the code that is mostly unknown to most people. We have very little direct access to the means of financial production ourselves, very little say in how financial institutions choose to steer money in society, and very little ability to monitor them.

We have, in essence, a situation of concentration of power in financial intermediaries, who in turn reinforce and seek to preserve that power structure. And while I may be happy to accept a concentration of power in small specialist industries like Swiss watchmaking, a concentration of power in the system responsible for redistributing human society's collective resources into new investments is not a good thing. It's systematically breaking our planetary hardware by steering money into destructive activities, whilst helping to fuel a culture of bland individualistic materialism in increasingly atomised communities.

Opening access, reconnecting emotion, liberating creativity

The Open Source movement started with software - and in particular with the concept of copyleft and free licensing - but the principles extend far past software. At core, Open Source is a philosophy of access: access to the underlying code of a system, access to the means of producing that code, access to usage rights of the resultant products that might be created with such code, and (in keeping with the viral quality of copyleft) access to using those products as the means to produce new things. Perhaps the ethos is best illustrated with the example of Wikipedia. Wikipedia has:

1. A production process that encourages participation and a sense of common ownership: We can contribute to Wikipedia. In other words, it explicitly gives us access to the means of production
2. A distribution process that encourages widespread access to usage rights, rather than limited access: If you have an internet connection you can access the articles. We might call this a commons
3. An accountability model that offers the ability to monitor and contest changes: An open production process is also one that is more transparent. You can change articles, but people can monitor and contest your changes
4. A community built around it that maintains the ethic of collaboration and continued commitment to open access. It's more than just isolated individuals, it's a culture with a (roughly) common sense of purpose
5. Open source code that can be accessed and altered if the current incarnation of Wikipedia doesn't suit all your needs. Look, for example, at RationalWiki and SikhiWiki

You can thus take on five conceptually separate, but mutualistic roles: Producer, consumer, validator, community member, or (competitive or complementary) breakaway. And these same five elements can underpin a future system of Open Source Finance. I'm framing this as an overall change we might want to see in the financial system, but perhaps we are already seeing it happening. So let's look briefly at each pillar in turn.

Pillar 1: Access to the means of financial production

Very few of us perceive ourselves as offering financial services when we deposit our money in banks. Mostly we perceive ourselves as passive recipients of services. Put another way, we frequently don’t imagine we have the capability to produce financial services, even though the entire financial system is foundationally constructed from the actions of small-scale players depositing money into banks and funds, buying the products of companies that receive loans, and culturally validating the money system that the banks uphold. Let’s look though, at a few examples of prototypes that are breaking this down:

1. Peer-to-peer finance models: If you decide to lend money to your friend, you directly perceive yourself as offering them a service. P2P finance platforms extend that concept far beyond your circle of close contacts, so that you can directly offer a financial service to someone who needs it. In essence, such platforms offer you access to an active, direct role in producing financial services, rather than an indirect, passive one.
2. There are many interesting examples of actual open source financial software aimed at helping to fulfil the overall mission of an open source financial system. Check out Mifos and Cyclos, and Hamlets (developed by Community Forge's Matthew Slater and others), all of which are designed to help people set up their own financial institutions
3. Bitcoin: There’s a reason why there is so much hype around Bitcoin. It’s a currency that people have produced themselves. As a member of the Bitcoin community, I am much more aware of my role in upholding – or producing – the system, than I am when using normal money, which I had no conscious role in producing
4. The Open Bank Project is trying to open up banks to third party apps that would allow a depositor to have much greater customisability of their bank account. It's not aimed at bypassing banks in the way that P2P is, but it's seeking to create an environment where an ecosystem of alternative systems can plug into the underlying infrastructure provided by banks

Pillar 2: Widespread distribution

Financial intermediaries like banks and funds serve as powerful gatekeepers to access to financing. To some extent this is a valid role - much like a publisher or music label will attempt to only publish books or music that they believe are high quality enough - but on the other hand, this leads to excessive power vested in the intermediaries, and systematic bias in what gets to survive. When combined with a lack of democratic accountability on the part of the intermediaries, you can have whole societies held hostage to the (arbitrary) whims, prejudices and interest of such intermediaries. Expanding access to financial services is thus a big front in the battle for financial democratisation. In addition to more traditional means to building financial inclusion - such as credit unions and microfinance - here are two areas to look at:

• Crowdfunding: In the dominant financial system, you have to suck up to a single set of gatekeepers to get financing, hoping they won’t exclude you. Crowdfunding though, has expanded access to receiving financial services to a whole host of people who previously wouldn’t have access, such as artists, small-scale filmmakers, activists, and entrepreneurs with no track record. Crowdfunding can serve as a micro redistribution system in society, offering people a direct way to transfer wealth to areas that traditional welfare systems might neglect
• Mobile banking: This is a big area, with important implications for international development and ICT4D. Check out innovations like M-Pesa in Kenya, a technology to use mobile phones as proto-bank accounts. This in itself doesn’t necessarily guarantee inclusion, but it expands potential access to the system to people that most banks ignore

Pillar 3: The ability to monitor

Do you know where the money in the big banks goes? No, of course not. They don’t publish it, under the guise of commercial secrecy and confidentiality. It’s like they want to have their cake and eat it: “We’ll act as intermediaries on your behalf, but don’t ever ask for any accountability”. And what about the money in your pension fund? Also very little accountability. The intermediary system is incredibly opaque, but attempts to make it more transparent are emerging. Here are some examples:

• Triodos Bank and Charity Bank are examples of banks that publish exactly what projects they lend to. This gives you the ability to hold them to account in a way that no other bank will allow you to do
• Corporations are vehicles for extracting value out of assets and then distributing that value via financial instruments to shareholders and creditors. Corporate structures though, including those used by banks themselves, have reached a level of complexity approaching pure obsfucation. There can be no democratic accountability when you can’t even see who owns what, and how the money flows. Groups like OpenCorporates and Open Oil though, are offering new open data tools to open up the shadowy world of tax havens, ownership structures and contracts
• Embedded in peer-to-peer models is a new model of accountability too. When people are treated as mere account numbers with credit scores by banks, the people in return feel little accountability towards the banks. On the other hand, if an individual has directly placed trust in me, I feel much more compelled to respect that

Pillar 4: An ethos of non-prescriptive DIY collaboration

At the heart of open source movements is a deep DIY ethos. This is in part about the sheer joy of producing things, but also about asserting individual power over institutionalised arrangements and pre-established officialdom. Alongside this, and deeply tied to the DIY ethos, is the search to remove individual alienation: You are not a cog in a wheel, producing stuff you don't have a stake in, in order to consume stuff that you don't know the origins of. Unalienated labour includes the right to produce where you feel most capable or excited. 

This ethos of individual responsibility and creativity stands in contrast to the traditional passive frame of finance that is frequently found on both the Right and Left of the political spectrum. Indeed, the debates around 'socially useful finance' are seldom about reducing the alienation of people from their financial lives. They're mostly about turning the existing financial sector into a slightly more benign dictatorship. The essence of DIY though, is to band together, not via the enforced hierarchy of the corporation or bureaucracy, but as part of a likeminded community of individuals creatively offering services to each other. So let's take a look at a few examples of this

1. BrewDog's 'Equity for Punks' share offering is probably only going to attract beer-lovers, but that's the point - you get together as a group who has a mutual appreciation for a project, and you finance it, and then when you're drinking the beer you'll know you helped make it happen in a small way 
2. Community shares offer local groups the ability to finance projects that are meaningful to them in a local area. Here's one for a solar co-operative, a pub, and a ferry boat service in Bristol
3. We've already discussed how crowdfunding platforms open access to finance to people excluded from it, but they do this by offering would-be crowdfunders the chance to support things that excite them. I don't have much cash, so I'm not in a position to actively finance people, but in my Indiegogo profile you can see I make an effort helping to publicise campaigns that I want to receive financing

Pillar 5: The right to fork

The right to dissent is a crucial component of a democratic society. But for dissent to be effective, it has to be informed and constructive, rather than reactive and regressive. There is much dissent towards the current financial system, but while people are free to voice their displeasure, they find it very difficult to actually act on their displeasure. We may loathe the smug banking oligopoly, but we're frequently compelled to use them.

Furthermore, much dissent doesn't have a clear vision of what alternative is sought. This is partially due to the fact that access to financial 'source code' is so limited. It's hard to articulate ideas about what's wrong when one cannot articulate how the current system operates. Most financial knowledge is held in proprietary formulations and obscure jargon-laden language within the financial sector, and this needs to change. It's for this reason that I'm building the London School of Financial Activism, so ordinary people can explore the layers of financial code, from the deepest layer - the money itself - and then on to the institutions, instruments and networks that move it around.

Beyond access to this source code though, we need the ability to act on it. A core principle of OpenSource movements is the Right to Fork. This is the ability to take prexisting code, and to modify it or use it as the basis for your own. The Right to Fork is both a check on power, but also a force for diversity and creativity.

In the mainstream financial system though, there are extensive blocks on the right to fork, many of them actively enforced by financial regulators. They won't allow new banks to start, and apply inappropriate regulation to small, new financial technologies. The battle for the right to fork therefore, is one that has to also be fought at the regulatory level. That's why we need initiatives like the Disruptive Finance Policy program.

The Right to Fork needs to be instilled into the design of any alternatives to mainstream finance too though. I don't want to replace a world where I'm forced to use national fiat currencies with one in which I'm forced to use Bitcoin. The point is to create meaningful options for people. (To the credit of the original designers of Bitcoin, the right to fork has indeed been built in, and there has been significant use of the original Bitcoin sourcecode to create other cryptocurrencies, albeit it takes more to create a currency than merely deploying new code).

Ahoy! We set sail for the Open seas

EXPLORE THE DEEP

We may be in the early phase of a slow-moving revolution, which will only be perceptible in hindsight. As projects within these five pillars emerge, the infrastructure, norms and cultural acceptance for more connected, creative, open financial system may begin to emerge and coalesce into reality.

I hope this article has been of use to you, whether you're looking to design actual open source finance platforms, programs and free software, or pioneer a new element of open access and open data, or whether you're just keen to help beta-test new ideas as they get released. The financial sector is a big heavy conglomerate that is a perfect challenge for the adventurous pirate-meets-hacker-meets-activist-meets-entrepreneur. Please do tell me about anything you're up to, and, in the spirit of Open Source, please do leave suggested amendments to this article in the comments section. I'll try patch them into the next version of this.

All about Bhartiya Mahila Bank - India's first All-Women Bank

The country’s first all-women commercial bank, the Bhartiya Mahila Bank (BMB), was inaugurated on Tuesday. The inauguration took place in Mumbai, and the event was graced by Prime Minister Dr. Manmohan Singh, Congress Chairperson Mrs. Sonia Gandhi, the Finance Minister Mr. P. Chidambaram and the RBI Governor Mr. Raghuram Rajan among other dignitaries. With this, the BMB commenced operations across seven branches. 

Some important highlights about the Bhartiya Mahila Bank:

1. The BMB is the first public sector bank created by the Government of India. All other PSU banks such as SBI were, to begin with, private banks and were later nationalized. 
2. The bank was launched with a corpus of Rs. 1000 Cr.
3. The interest offered by BMB is as high as 4.5 % for savings accounts up to Rs. 1 lakh and 5 % for savings accounts beyond Rs. 1 lakh.
4. The total business for BMB is forecasted to grow to 60,000 Cr. by 2020. Also, the number of branches will to 25 by mid 2014 and 770 branches by 2020.
5. It will lend to women or to businesses which are either managed by or make products for women.
6. The Bank will be headed by Usha Ananthsubramanian and will have an eighth member board  comprising members such as Tanya Dubash daughter of Adi Godrej, Kalpana Saroj, chairperson of Kamani Tubes, Chhavi Rajawat, the Harvard educated sarpanch of Soda village in Rajasthan and Nupur Mitra, ex-chairman of Dena Bank.
7. The Bank will be headquartered in Delhi.

More than half of India’s population remains unbanked. Only 26% of women in India admit to having a bank account. The primary purpose of the BMB is financial inclusion of India's unbanked rural women. Also, one of the biggest issues faced by women is the problem of pledging collaterals against loans. The BMB aims to address this issue by offering collateral-free loans of up to Rs 1 crore to women.

     

     Let us all hope that the Bhartiya Mahila Bank succeeds in its noble cause of financially aiding the women of our country. Indeed, the success of a nation lies in the success of its women.

- Sufiyan Sarguroh

  SIMSREE Finance Forum

 

5 Reasons WHY Employees Left a Company

Understanding your employees thinking nowadays is crucial to retain top talents in your organization. What's the reason behind for them to press the "Resign" button? Detecting it early and replacing it with a "Stay" button before it is too late.

Please be mindful that the generation now is different, their thinking is different, their feeling towards a job is very much different. As such, employers or top management should find out the determining factor of employees going to resign. Let's look at the reasons...

1. Better prospects
   No doubt, this is the most common reason to leave. We can't prevent someone to leave for good, either because of higher pay or better position offered elsewhere. Correct? True or not, some use this just as an excuse, rather than the reason, to resign. He/She may leave because of other reasons listed below...
   
   
2. Lack of Recognition / Respect from top management
   Sometime recognition or respect from bosses treated as an "parameter" to gauge the value of an employee for an organization. For top performers, other than monetary reward, recognition is also important. Respect come from two ways, not only towards top management. Agreed?
   
   
3. Just can't gel with company's culture
   Everyone's belief and culture may determined his/her length of service. You can't stay in a company which the culture is in contrast with yours. Remember, it's 5 days a week, 9 hours a day job. Example, most of your colleagues joining a direct sales company part-time, but you're not and against it. Can you overcome it?
   
   
4. Unfavorable company forecast
   Normally due to merger and acquisition exercise, employees may feel that it's not in their favor to stay. Maybe he/she will be the one being axed out or VSS later. Then, why don't I leave first before being forced to do so?
   
   
   
   
   
5. Imbalance Work-Life situation
   In the end, working is not everything in life, employees evaluate their lifestyle also especially when he/she gets married and having children(s). Where you work and live is also important. Time spent on traffic jam is stressful and time consuming, which may lead to the exit door.
   
   

After knowing all this, employers should be smart enough to examine each and every candidates before hiring them. Questions such as "Where they live?" and "What's their expectation?" must be asked. Happy working.

ARTHNEETI SEPTEMBER 2013 ISSUE

6 weeks is a short time, very short indeed, if you are considering the macroeconomic situation in India at least. The last six weeks have demonstrated how from virtually the onset of economic crisis, the macroeconomic situation recovered, so much so that the benchmark SENSEX is close to breaching the highest points recorded in history. There is a sense of confidence in the Finance Ministry and the RBI. Confidence is certainly commendable, but it must not turn into complacency.

The Artheenti September issue will take you through what really happened in the last 2 months, the fallout points, the emerging positives of late, and the path ahead. This publication also consists of articles on relevant and contemporary issues such as “Impact of QE Tapering on world growth” and “Rupee on a downhill yatra. But for how long?”. We also have an article from our alumnus Joiel Akilan of the 1994 batch on “Lessons for Team India Inc“. Also, we have published an interview with Mr. Kewal Handa who has served as the Managing Director at Wyeth Limited and Pfizer Limited. He shares his immense knowledge and insights on the pharmaceutical sector. To conclude, we have an article on “Dependence of Indian Markets on FIIs“ by the SIMSREE Finance Forum.

To continue reading, Click Here.

Happy Reading!

-          Team Arthneeti

Köpa aktier i Burma?

Jag har aldrig varit i Burma. Jag har alltid velat åka till Burma. Burma var under brittiskt kolonialstyre Sydost-Asiens rikaste land. Burma är fullt av rubiner, ädelträ och annat. Burma är granne i öster med ett land som jag tilltalas av och känner ganska väl. Kustlandet Burma är också granne i öster med ett litet land utan hamnar. Burma är dessutom granne i norr till ett jätteland som växer snabbt och som dessutom saknar hamnar i Indiska Oceanen. Slutligen är Burma granne med två av världens mest folkrika länder i väst. Summa summarum, Burmas återinträde i den globala ekonomin är något jag, och många med mig, följer med stort intresse.

Men hur gör man för att få lite finansiell exponering mot detta land? I Burma har det faktiskt funnits en börs, eller ngt liknande, i mer än femton år nu. Problemet är att där bara finns två aktier att köpa! Med tanke på att det kanske finns tusentals privata företag i detta stora land känns det som att potentialen för att öppna upp landet för mer organiserad handel med aktier är stor. Det är ju alltid trevligt för företag med riskkapital som komplement till banklån!

Intressant nog planerar Tokyo Stock Exchange (och Daiwa Securities) just att sätta upp en alternativ aktiebörs i Rangoon och förhoppningsvis kommer det snart finnas en någorlunda aktiv aktiemarknad i Burma. Det är ju trevligt för investerare, men framförallt antar jag att det skulle vara en boost för landets ekonomi.

När det gäller investerare finns det naturligtvis alternativ för den som vill ha exposure mot Burma. Ett av de bättre är nog att köpa aktier i grannländerna. För den lite mer avancerade investeraren tror jag ett spännande alternativ skulle kunna vara ”The Silk Road Myanmar Index”. Detta index följer stora välkända bolag i framförallt Thailand (Italian-Thai Development, Shangri-la Hotel, Ratchaburi Electricity) samt några i Singapore och Korea. Alla bolagen har verksamhet i Burma.

Budget 2014: Property Sector Hit Hard by RPGT and DIBS ruling

As widely expected, property sector would be one of the hardest hit sector in view of the proposed cooling measures to be imposed. Out of the 3 tightening rules forecast by Finance Malaysia, 2 already Bingo! (Read our previous articles regarding property sector "3 Tighter Rules for Property Sector?" and "3 Critical Factors to watch out by Year End")

These cooling measures announced highlighting that government will not hesitate to curb property speculations and to ensure a affordable property prices. Of course, property developers will be the one screaming painfully.

The 3 Key Measures:

1. Higher Real Property Gains Tax (RPGT)
   This was the 3rd consecutive year government raised RPGT. Even said so, it was just reinstated back to its original rates since 2007. The different this time compared to previous rounds was different set of rates to be imposed on different categories of buyers as shown below:
   
   
   
   
   
   
   
2. Banning DIBS
   As predicted by us previously, DIBS was deemed to be one of the key motivating factor for speculators, thus pushing up property prices to current level. By banning DIBS, it will effectively diminished the speculative interest as the cost of investment increase with interest payment during construction period. It's good to genuine and first-time house buyers.
   
   
3. Higher minimum Purchased Price for Foreigners
   To minimized influx of hot money shoring up local property prices, government raised the minimum purchased price to above RM1mil from RM500k per unit. However, this doesn't impact the market much because most properties purchased by foreigners are above RM1mil. Nevertheless, foreigners' favorite investment hotspot, such as Iskandar or KLCC or Mont Kiara area would be affected.

Would this be the end of property up-cycle?

Budget 2014: Good to have GST ?

Definitely, one of the hottest debate in Budget 2014 would be the implementation of 6% Goods and Services Tax (GST) starting April 2015. Although it was opposed strongly by opposition parties, government pushed ahead with its implementation emphasizing GST as a "fair and comprehensive" tax as the current tax system has many weaknesses.

Why GST is a MUST ?

Without you realizing, our current tax system has many loopholes whereby many people do not fulfill their responsibilities as a taxpayer. They tends to under-stated their real income, paying less tax than they should, or even worse... none. However, under the GST system, everyone will be taxed every time you spend.

And, if you're paying tax now, you should be happier. Why? Simply because government have a wider tax revenue now with GST because everyone is paying tax. Wouldn't it better?

Why April 2015 ?

Instead of Jan 2015 (expected date), government now has more time to explain and educate the public on GST. In other words, government is playing it safe, "buying time" to minimize the misunderstanding among Malaysians.

Is it okay ?

Implementation is very vital. It's best to implement GST and lowering down the personal income tax rate simultaneously. And, this time government did consider this well. As long as it was implemented properly, this should bode well for our nation to broaden the tax revenue, thus reducing the budget deficit and maintaining the credit rating of our country's obligations.

Why MyEG ?

Strange question over here? Yes. As we knew, MyEG already successfully completed its trial version for GST computation in business premises. Do you know why MyEG shoot up to all-time high to closed at RM2.25 today?

Money Management Concept of 70s, 80s, 90s

When come to money matters, different generations have their own thinking. Before reading on, please listen to your heart deep down inside, what is your thinking? Hahaaa.... Bingo? Let's see...

70s: Saving

Generally, this generation not only hardworking in job, but also hardworking in saving. They usually save their money in banks or placed it in fixed deposit, cultivating a very good saving habit. Pre-retirement: Wealth Accumulation and investing in their children's education. Post-retirement: Wealth Enjoyment and depending the financial support from children. That's a great trade off (at least for that generation)!!!

80s: Self-Sustainable

Due to higher inflation, this materials emphasis generation feeling the pinch of not enough money every month. Credit card, car loan, housing loan, insurance premium... !!! No wonder many of them financially critical when come to month ends. Parents for 80s will be more than happy, if their 80s children doesn't need their financial support anymore. God bless!

90s: Consuming
For them, money is meant to be spent. In other words, this would be a great loss to them if they don't enjoy life now. Very often, they learnt how to spend first before saving money. Anyway, parents were their ATM (Automatic Tomorrow's Money), continuing financial support for their beloved children. Hence, financial management and saving concept for 90s usually is poorer.

So, is this true?

UnTold EPF RM2500 Death Benefit?

Lately, there is a chain email spreading across social media regarding EPF Death Benefit as below:

" ATTENTION to everyone who has an EPF account !!! No matter how old are you, no matter how long you have held your EPF account, no matter how much money you have in you EPF account, and matter how long you have paid for your EPF, according to Government Law, EPF will need to pay RM 2500 to an EPF account holder's family when he/she died (family members need to claim the RM 2500 within 2 months). EPF never inform us about this, I reckon very few people's family did actually receive this RM 2500 when his/her family member died because not many people know about this. Where did this RM 2500 goes when the died's family did not claim for RM 2500? Someone's pocket ??? We don't know! So please bombarded this info to all your families, relatives, colleagues and friends, let them know about this info and remember to claim RM 2500 when his/her family die. Don't let this RM 2500 goes to someone's pocket !!! "

Is this true? Below is the respond from EPF:

The above email contained untruthful accusation. The EPF would like to inform its members that a Death Benefit payment of RM2,500 will be presented to the dependents of the deceased members as a gesture of compassion and to ease their financial burden. However, this benefit will only be given once and subject to the following conditions:

• Malaysian citizen;
• Member has not reached the age of 55 at time of death;
• Application for Death Withdrawal is made within 6 months from the date of the demise of the member.

The Death Benefit is payable to the members’ dependent or next-of-kin when the application for Death Withdrawal is made. 

The EPF would also like to emphasis that the money for Death Benefit comes from EPF’s investment earnings and not from the members’ savings. If the dependent does not qualify under the conditions for Death Benefit, the money will still remain with the EPF to be distributed to all members as annual dividend.

Source: EPF

ATM Hacking and the Art of Hole-in-the-Wall Detournment

COME TO ME MY LOVELY

The Automatic Teller Machine is one the primary interfaces we have with the banking system. It's a machine of convenience, replicating what a human bank teller used to do. They're often placed next to physical bank branches, reinforcing the widespread notion that the money coming out of the wall somehow came from 'inside' the bank. Given that the majority of our money is in fact electronic, and stored in a bank's datacentre-based IT system, nowhere remotely close to the ATM, this is something of an illusion. Indeed, the ATM  can echo and reinforce much of the disconnection implicit in the broader banking system.

That said, the fact that people are constantly using ATMs makes them great venues for symbolic pranking. Maybe one could call it, like the situationists did, detournment - the art of throwing people's minds into an unexpected detour whilst they trudge through otherwise unthinking everyday practice. The hope of such a situationist prankster is to make someone reflect about the deeper meaning of economic life. Alternatively, it may be simply to have fun. What follows are some ideas and examples from the cutting edge of ATM artistry and activism (horray!).

Difficulty level 1: ATM as billboard

Plastering an ATM with stickers is a straightforward tactic for the social justice prankster. Here's an example from Rainforest Action Network activists who designed a sticker replicating the Bank of America ATM screen to protest BoAs funding of coal power. Options offered include 'Bankroll Climate Change' and 'Fund Executive Bonuses', forcing the user to reflect on the implications of the bank's continued support for a high carbon future (albeit it's possible that it also drove them into a rage at their inability to use the machine).

Difficulty level 2: ATM as street art

ATMs are economic installations, so why not use them as sites for further installation artworks? Here's one example from Jason Eppinks: He designed a magic spigot that gushes forth with whatever is inside the thing the spigot is attached to. In this case it gushes forth dollar bills (which admittedly are attached to a string).

Difficulty level 3: ATM for homemade money

If you make your own DIY money, you need your own DIY ATM. The Dutch money-artist Dadara uses Exchanghibition Bank, an outlet to dispense his hand-designed bills to members of the public. Ok, it's not quite an ATM, but it's only a matter of time before he automates it. (Dadara also lent his designs for a limited edition version of my book - check here)




Difficulty level 4: ATM as musical instrument

To do this you just get an ATM and attach it to a medium-sized pipe organ, or perhaps a synthesiser. I'm not entirely sure what the point is, but perhaps it's to give a person a audible sense of the consequences of their banking decisions. If you'd like to hear it in action, check out the video here.





Difficulty level 5: ATM as games arcade

Now we get a little bit more complex. Certain ATM designs have technical glitches that enable you to override their normal functionality. With a bit of practice you can play Angry Birds on your local Russian ATM whilst listening to Zero Day by the long-forgotten 90s hard rock band without a Wikipedia page, Nevada Beach. For more info on this, see here.

Difficulty level 6: Build your own ATM
My greatest ever Lego creation was a Landrover I designed from scratch, equipped with a winch, engine and moving propshaft. These guys though, have used Lego to make an ATM, a technically challenging task even for Lego obsessives. The beautiful thing about this is that by it's very nature Lego is deconstructable: thus, unlike your traditional ATM which exudes a lack of trust from under its armoured exterior, this machine relies on trust, and believes in the best in people. Only a complete arsehole would try to break up another's Lego creation.

Difficulty level 7: The ATM as Robin Hood

At the 2010 Black Hat hacker conference the late great Barnaby Jack demonstrated how to 'jackspot' an ATM, using some technical wizardry to get it to spit out money in a manner reminiscent to the Doctor Who episode 'The Runaway Bride'. This is of course illegal, so if you're going to do this, please make sure the proceeds go to a worthwhile cause.

The Next Step: Alternative Currency ATMs
The potential to subvert ATMs goes beyond immediate jamming of conventional finance. There is also the opportunity to promote alternative versions of finance. For example, Bitcoin ATMs have already been designed, and I've previously suggested that I'd like to see Brixton Pound ATMs. I'm going to start working on some schematics for that (and download some DIY engineering courses at the same time). If you have any ideas for other cool ATM artworks, pranks, and (legal) hacks, please do share.

FISCUS '13

FISCUS 2013 : India and China – The New Torch Bearers of World Economy

5^th October 2013 is a date that all SIMSREE students will remember for a long time. Through FISCUS ’13 – the annual financial summit of the institute - it was an honor and a privilege to have with us the stalwarts of finance in the corporate world. The theme for this year’s FISCUS was ‘India and China: The new Torch Bearers of World Economy’.

Mr. Seshagiri Rao – the joint Managing Director and group CFO for JSW Steel – was the Chief Guest. Mr. Atul Joshi – the Managing Director and CEO at India Rating and Research (a Fitch Group Company) – was the Key Note speaker for the event. The eminent panelists for the discussing the topic were Mr. Pramod Kasat – head of investment banking team at Investacorp and an alumnus of SIMSREE (batch of 1993); Mr. Tarun Sharma – Assistant General Manager at EXIM Bank of India and Mr. Nilay Rathi – General Manager (Commercial) at Century Textiles and Industries Limited.  The moderator for the discussion was Mr. Prashant Shetty – Director IDFC Capital and an alumnus of the Institute (batch of 1988).

The event, organized by the SIMSREE Finance Forum, was inaugurated by the traditional lighting of the lamp and the national anthem following which the Director of the Institute, Dr. Sandhya Dhabe, welcomed the esteemed guests to the Institute.

The Chief Guest for the event, Mr. Seshagiri Rao, then addressed the batch. He touched upon the challenges that the developed nations, namely USA and Europe, faced of late and what led to the various financial crises in these economies. In the backdrop of the current turbulent scenario, he also spoke about the opportunities that lie in emerging economies and outlined the path that could be followed. With a rich experience spanning three decades in the steel industry and in the corporate finance and banking sector, he also shared with the students the challenges that India faces with regards to Steel manufacturing and how the future is full of fruitful opportunities waiting to be tapped in to.

Mr. Atul Joshi, the Key Note speaker, brought to the event an insight to the economies of India and China from a Rating Company’s perspective. He first explained the students the ratings models followed for banks, corporate and the local governments. He also cited the disparities in the national and international ratings awarded to the institutions in India and its effect. Finally, he requested the students to have an optimistic attitude towards the future of the nation.

The stage was then opened for the panel discussion moderated by Mr. Prashant Shetty. All the panelists first spoke briefly on the subject. Mr Nilay Rathi shared with the students the challenges and opportunities that the Indian and Chinese economies face sighting the example of the textile industry. Mr. Tarun Sharma enlightened the students regarding the importance of exports for the development of any economy. Mr. Pramod Kasat elaborated upon the importance of investment, the differences between the Indian and the Chinese growth models, and the growth strategies to be followed. Among the wide array of questions raised by the audience were the ever increasing population challenges faced by the two nations, and whether it is a challenge or an opportunity, the political unrest between India and China, and how it may impact the economic ties between the two nations, the importance of trade fairs and the merits and challenges of the democracy in India and autocracy in China.

Mr. Seshagiri Rao concluded the discussion perfectly by saying “India and China need not confront and have conflict, but they need to collaborate and cooperate”. The event was concluded with a vote of thanks by the SIMSREE Finance Forum Coordinators.      

- Sufiyan Sarguroh,

  SIMSREE Finance Forum    

Aktiepriser enligt obligationsmarknaden (och enligt mig)!

Välj vilket företag som helst och sannolikheten är mycket stor att det finansierat sig dels med aktier och dels med lån. Detta gör att såväl aktier som företagsobligationer kan användas som termometrar för att känna av ett företags väl och ve. Vi är alla vana vid att utläsa något positivt av att t.ex Pfizers aktie gått upp ett par procent. En del av oss är kanske också vana vid att utläsa en ränteuppgång för en av Pfizers obligationer som något dåligt osv. I teorin ska naturligtvis obligationer och aktier utgivna av samma företag bete sig konsistent med varandra. En plötslig aktiekursuppgång samtidig med en kraftig ränteuppgång signalerar t.ex. att företaget, enligt marknaderna, står inför en ökad risk vilket kan gynna aktieägare (begränsad nedåtsida) men inte långivare (inget uppåtsida).


En fråga jag ställde mig i min nya artikel ”Stock Prices and Stock Return Volatilities Implied by the Credit Market” är därför om man kan använda obligationsmarknaden och en teoretisk modell för att backa ut aktiepriser implicerade av räntorna i oblationsmarknaden. Dvs, vad är en viss dag en rimlig prisnivå på Pfizer aktien enligt obligationsmarknaden? Jag använder kreditderivat i stället för obligationer då de sistnämnda inte handlas frekvent nog och så använder jag en kommersiell modell för att koppla aktiepriser, volatiliteter, skulder och räntor till varandra. Artikeln kan nås här och ett exempel kan ses i figuren ovan. Den svarta grafen är priset enligt kreditmarknaden och den ljusblå är det egentliga aktiepriset. Detta betyder att Pfizer-aktien var övervärderad den 1 februari 2013 (slutdagen i mitt sample)! Åtminstone enligt kreditderivatmarknaden och åtminstone relativt situationen i februari 2004.

Retirement Income Scenarios Blog

For some years I have been focusing most of my research on issues associated with the provision of income to individuals during their retirement years. I now have expanded this work to include the provision of programs that anyone can use, requiring only a browser that supports Adobe Flash software. To keep everything associated with this research in one place I have created a new blog at:

                  www.RetirementIncomeScenarios.blogspot.com

Please take a look. If you find it interesting, I'd be delighted if you would sign up for notifications by email when I add new posts, which I hope to do quite frequently.

 


  

5 Unusual Tricks to Help you Save Up

Saving money is not always as easy as it first seems, and all those good intentions and budgets can fly out of the window without you even noticing – so why not try some more unusual money saving tips? Here are five of our best tips to help you save up!

1. Never pay with coins
   That’s right, take out all those coins weighing down your purse or wallet and put them in a piggy bank or jar instead. That 10 Sen coin isn't worth much on its own, but once you start saving up all your coins, it can add up to a considerable sum. Avoid the temptation of dipping into your coin fund by storing in it a tin with just a coin slot at the top. If you have to get out a can opener to access those coins, you’re more likely to wait until it’s full before you open it!
   
   
2.  Never say NO to a freebie
   Whether it’s free shampoo and soap from a hotel or free condiments from a restaurant, stock up! These free products are just as good, but with the added bonus that they cost you nothing. It also means that you get better value on your hotel room and meal out, so it’s a win-win situation.
   
   
3. Sleep on it
   Make a deal with yourself: Don’t buy something the first time you see it. Shopping can be a dangerous experience for those wanting to save up, and sometimes all that temptation can get too much. So avoid all that hassle and post-shopping regret by not buying anything the first time you see it or try it on. Go home, sleep on it, look at your finances and your budget and decide whether you really need it, or whether you can survive without it.
   
   
4. Find a partner who’s good with money
   If your partner is always overspending, borrowing money from you and forgetting to pay their bills, chances are you’re not going to be that good with money either. We’re not saying you should break up with your partner if they’re not good with money, but you should definitely sit down together and discuss your expectations when it comes to finances – money is the number one cause of arguments in relationships, so don’t let it ruin yours too.
   
   If you’re still single, on the other hand, why not add “good with money” to your list of criteria? A smart spender will encourage you to save, and will help you to get back on track if you fall off the saving bandwagon.
   
   
5. Save the environment and your money at the same time
   You've heard it a thousand times before: switch off the lights when you’re not in the room, reuse paper, bottles and everything possible… It’s all great for the environment, but there’s another key reason to save energy and reduce, reuse and recycle: it saves you money!

Exclusively for Finance Malaysia Blog, this money saving tips is brought to you by comparehero.my, Malaysia's leading comparison portal.