Creating Money

You will be reprogramming your subconscious mind to accept these thoughts as reality, and as it does it will create changes in your life to match this new inner reality.

Situations and objects will come into your life simultaneously with your need for them.

We want you to recognize that you do not have to stay in jobs that do not serve you.

The man-made laws of money include financial planning, time management, cash flow management, marketing, taxes, and business planning.

You can create money with the spiritual laws alone.

Let your prosperity be based on the amount of good you contribute to the world.

Beliefs in scarcity help create your wars and the taking of more than is needed from the earth.

You are the source of your riches, not your job, your investments, your spouse, or your parents.

If you think what you want is too far away or hard to get, your intent is not clear.

If you think that having more money will give you inner peace, allowing the quality of inner peace into your life is your key to becoming magnetic to more money.

The universe doesn’t say you can have what is good for you only after you make a million dollars.

Security does not come from accumulating wealth.

If you have a feeling of security within, you will be able to create a life that reflects that feeling.

A million dollars might not seem real to you, particularly if you have trouble imagining yourself paying your rent easily and on time each month.

You can magnetize out of neediness, but it dilutes your effectiveness.

When you are focused upon serving or assisting people you are very magnetic.

When you get an idea, don’t over-analyze it, asking “Is this idea going to create my new path, be profitable, or support me for the rest of my life?”

If you do what is joyful, you may find that all the jobs you are forcing yourself to do to make money are no longer necessary. You will also discover that you make more money in the long run by doing what you love than by doing things you don’t love.

True success is having the right amount of money, transforming an old habit or negative belief, releasing a fear, doing things you love, and developing and recognizing your special talents.

You may be acting as if you are waiting for some invisible “parent” or ouside authority to decide whether or not you can have what you want.

Beliefs are assumptions about the nature of reality, and because you create what you believe in, you will have many “proofs” that reality operates the way you think it does.

[…] a person who believes that money comes only from working hard will receive money only from hard work.

In some way those beliefs were perfect for you to have earlier in your life, leading you to the appropriate lessons and growth you needed to achieve more of your potential.

When money is not flowing it may be time to start new activities that you have been wanting to do.

Act as if you have the money for whatever you want.

Trust is the link between the mental world and the physical world.

If you feel you can’t live without something, that your well-being is dependent upon your having it, you actually repel what you desire.

The degree to which you are open and loving is the degree to which miracles will come your way.

As you treat others with love and compassion, you draw to yourself opportunities, money, people, miracles, and even more love.

When you are determined to have something only through a certain source, you cut off all other ways it can come to you.

Even if it doesn’t appear that there will be more money in doing what you love, trust your heart and follow your higher path, for there will eventually be much more money and abundance from following this path than any other.

Your life’s work may not yet exist as a job you can find. It may be a job you will create.

A job you previously enjoyed may now be routine or something you do because you need the money, not because you love it.

You don’t need to totally change your life; you can create your life’s work gradually, one step at a time.

You can design your future by being alert and aware of opportunities, knowing when to take action and when not to.

Begin now to affirm that you will be in the right place at the right time. Keep that thought in mind, and trust that your feelings of joy or resistance are helping you create this as a truth.

Some of you accept money only for doing jobs you don’t like, and feel guilty asking for money for your special talents and services.

It is often threatening to people close to you when you choose to grow or change. They fear a loss of your love.

If you have well-meaning friends who tell you that something is hard to do or can’t be done, realize that they are only showing you your own doubts, mirroring them back to you so you may become more aware of them and let them go.

If you keep telling yourself why you can’t have what you want, you won’t have it.

When you are no longer enjoying what you are doing, it is a sign that something new is needed. If this is so, developing the new will bring you more abundance than holding on to the old.

If it is time to make changes but you are reluctant to let go of the old, your soul will help you by creating circumstances in which the old no longer works.

You can decide how much discontent and dissatisfaction motivates you to act on your inner messages.

I let go easily, trusting that nothing leaves my life unless something better is coming.

Ask yourself if the process of studying and learning sounds joyful.

Remember that the more money circulates, the wealthier everyone is, just as the more times inventory turns over, the more prosperous a store becomes.

Every time you send out your money with joy and love, you open another way for the universe to send you money.

Buy one good outfit that you feel wonderful wearing, rather than several less expensive ones that you don’t really like.

People feel good about themselves when they give you something that you can use and appreciate.

Imagine ten times the amount of money someone gives you coming back to them every time you receive money.

Affirm that you will receive money from whatever source the universe uses to give it to you, and the universe will find more ways to give you money.

People create lack in their lives to learn certain lessons.

Money comes when you put your attention into what you are giving to the world rather than thinking only of the money your work will bring you.

The greatest gift you give others is the example of your own life working.

You often defend most vigorously those beliefs and values you aren’t really sure about, for when you are clear about your beliefs you rarely feel the need to defend them.

As society begins to believe that there can be abundance for everyone, new discoveries will be made that will provide unlimited energy and resources that do not pollute or deplete the earth, and there will be fewer reasons for war.

It is not more spiritual to be poor, nor is it better to be rich.

What is important is having enough money to do the work you came to do, and not having so much that it keeps you from the work you came to do.

There is an unlimited supply of success.

Those who do not make money or experience abundance are usually those who think they have to work at jobs they don’t like until they have enough money saved to do work they like.

Creating abundance will require that you let go of any remaining beliefs that money and objects are hard to create, because they aren’t.

Ludwig Von Mises

“What counts is not the data, but the mind that deals with them…. Galileo was certainly not the first to observe the swinging motion of the chandelier in the cathedral at Pisa.”

“It is characteristic of very great persons to move forward to highest accomplishment out of an inner drive; others require an external impulse to overcome deep-rooted inertia and to develop their own selves.”

See also: Amid Financial Excess, a Revival of Austrian Economics

Howe Yoon Chong

“Whether we have been extravagant in investing in an airport of this size and level of sophistication is a question worthy of a rhetorical rejoinder. Can Singapore ever afford not to have such an airport?”

— the late Howe Yoon Chong, then Minister of Defence on the official opening of Changi Airport on 29.12.1981

Letter from PM to Mrs Howe: http://www.channelnewsasia.com/obituary/howeyoonchong/pm.pdf

Being a Christian in the Working World

Being a Christian in the Working World
Kwek Mean Luck, Cambridge 1992-1995
Channel, Easter 2006

When I was in the CCCF, we had a number of post-graduates, who would share with us the difficulties of keeping the faith out in the working world. Imbibing from their experience, one of the things we consciously sought to do was to prepare ourselves for entering the workforce as Christians.

It has been many years since Cambridge, and the Lord continues to teach and to guide. These are some of the lessons I have learnt:

1. Cambridge is wonderful, but I must give other experiences a chance – When we came home, we missed Cambridge and the fellowship we had there terribly. For some, our experiences in Cambridge seemed like the peak of our Christian experience. We felt like we were now in the valley in the working world. It takes time, but we must move on. Clinging to what was wonderful does no good for the present. For those of you who have years in Cambridge still, continue to make the most of your years there, as I am sure you are, and store for yourself wonderful memories. When you leave, give the other experiences a chance.

2. I have graduated but I still need teachers and mentors – I learnt much from the many people around me, some of whom played particularly strong roles in my life as teachers and mentors of what it means to be a Christian in the working world. Some of them were not Christians, but they served as examples of how a Christian should be living. Some were Christians, who also gave me Christian perspective on different things and shared with me their experiences. Find teachers and mentors to guide you in different aspects of your walk with God.

3. Living out our faith – I recall a story told at a conference. A new and young pastor was asked a question about a passage in Romans on predestination during a sermon. He mulled through what answer he should give on a difficult and delicate subject and decided to reply along the following lines: ‘Well you know, there are four gospels before the book of Romans, read through them and put into practice what is said there. When you have done that, we will be ready to discuss the answer to your very pertinent question.’ To deepen our walk with God, at some point we need to move beyond knowledge and start living out our faith.

4. Small things count – There is a saying that talks about how we need to be careful of our thoughts, for they turn into actions, then into habits and then becomes part of our character. It is trite but true. A constant struggle for us is how we are to maintain integrity of our Christian beliefs and faith throughout all seven days of the week. It is easier whilst in church on the weekends, but what are we supposed to do as Christians during Mondays to Fridays when we are working? We each need to find the answer ourselves, but it helps to start with the small things: how we react to a piece of work, how we treat people who serve or work for us at work, how we relate to our bosses, how we react when under pressure or criticism. It is not easy to be a Christian in the workplace, but it is easier if we start by practising a few small things, and build from there. Small things count.

5. He will never let you fall – Most importantly, know that He will never let you fall. I have gone through valleys in my walk with Him. There were times when I felt I was in the desert. Yet, He is also the one who said that He will bring streams to the desert and I have seen Him do so. I used to wonder if I am any less a Christian today than I was in university, since I feel less palpable passion in my heart. Yet, I am heartened that over time, he has replaced that passion with a calmer and stronger fire that has withstood the blowing winds. I do not know about tomorrow, but I know He walks with me. So too will He with you.

Pay lawyers more to keep them: Chief Justice

By Pearl Forss, Channel NewsAsia | Posted: 18 August 2007 2259 hrs

SINGAPORE: More young lawyers are switching careers, citing long hours, unrewarding pay and stress as reasons.

This causes a shortage of lawyers, and as the economy booms and the demand for law services goes up, the problem is becoming more acute.

How to address this problem?

“Pay them well,” said Chief Justice Chan Sek Keong, in his address to law students at the inaugural Singapore Legal Forum on Saturday.

“Our young lawyers enjoy a degree of professional and social freedom and mobility which lawyers of my generation have never experienced. Perhaps the solution is in the old fashion but still fashionable way of using carrots without the stick since the latter doesn’t work. Pay them well. Greed works most of the time, even for the large majority of people in affluent societies,” he said.

In recent years, even the best-paying firms in Singapore are seeing their young lawyers jumping ship to Hong Kong, where salaries for junior lawyers start at about S$11,650 a month.

In contrast, the big firms in Singapore pay junior lawyers just over $4,000.

A second law school has been established at the Singapore Management University.

Also, the NUS Law Faculty has increased its intake and firms are now allowed to hire foreign lawyers.

But the shortage has not eased yet.

Another issue of concern addressed at the Legal Forum is how to make the law more accessible to the public.

Laws may be available online but the language in which it is written makes it difficult for the layman to understand it.

So the Chief Justice said that he would ask the Law Academy’s publishing committee to study the feasibility of publishing simplified law books.

While access to the law is important, access to justice is even more so.

This need will be provided by lawyers who do pro bono work, that is providing service free of charge.

But such services are currently confined to Community Court cases, and this year, more convicted offenders are appearing in High Court appeals without lawyers.

In his speech, the Chief Justice also addressed the issue of restoring confidence in the law profession, particularly after the high-profile case of lawyer David Rasif who fled with more than $12 million in clients’ monies.

“We must be more discerning about what we read in the media. The facts do not suggest any loss of confidence in the legal profession,” said the Chief Justice.

“On the contrary, our large and medium law firms are generally held in high regard in Singapore and in the region. All the ethical and professional lapses that I have come across in my 40 years in the law have emanated from small law firms. It’s very unfortunate,” he added.

Although only a small minority of lawyers in these firms have committed breach of trust, the Chief Justice stressed that all law students must be taught the importance of ethical values.

The forum was organised by the UK Singapore Law Students Society. – CNA/ir

Sub Prime

What happened (and what is still happening) is simply leverage in reverse, or what people used to call a “run on the bank.” But… I think a great more detail would be helpful for you to understand. Please excuse the intricacies: None of this stuff is very easy to understand the first time you think about it. I’ll try to avoid using any jargon…

For nearly 10 years, as interest rates fell from 1995 to 2005, the mortgage and housing business boomed as more and more capital found its way into housing. With lower rates, more people could afford to buy houses. That was good. Unfortunately, it didn’t take long for some people to figure out that with rates so low, they could buy more than one. Or even nine or 10. As more money made its way into housing, prices for real estate went up – 20% a year for several years in some places. The higher prices created more equity… that could then be used as collateral for still more debt. This is what leads to a bubble.

Banks, hedge funds, and insurance companies were happy to fund the madness because they believed new “financial engineering” could take lower-quality home loans (like the kind with zero down payment) and transform these very risky loans, made at the top of the market, into AAA-rated securities. Let me go into some detail about how this worked.

Wall Street’s biggest banks (Goldman Sachs, Lehman Bros., Bear Stearns) would buy, say, $500 million worth of low-quality mortgages, underwritten by a mortgage broker, like NovaStar Financial. The individual mortgages – thousands of them at a time – were organized by type and geographic location into a new security, called a residential mortgage-backed security (RMBS). Unlike a regular bond, whose coupon is paid by a single corporation and organized by maturity date, RMBS securities were organized into risk levels, or “tranches.” Thousands of homeowners paid the interest and principal for each tranche. Rating agencies (like Moody’s) and other financial analysts, believed these large bundles of mortgages would be safer to own because the obligation was spread among thousands of separate borrowers and organized into different risk categories that, in theory, would protect the buyers. For example, the broker (like NovaStar) that originated the mortgages would be on the hook for any early defaults, which typically only occurred in fraudulently written mortgages. After that risk padding, the next 3%-5% of the defaults would be taken out of the “equity slice” of the RMBS.

The “equity slice” was the riskiest part of the RMBS. It was typically sold at a wide discount to the total value of the loans in this category, meaning that if defaults were less than expected, the buyer of this part of the package could make a capital gain in addition to a very high yield. Even if defaults were average, the buyer would still earn a nice yield. Hedge funds loved this kind of security because the yield on it would cover the interest on the money the fund would borrow to buy it. Hedge funds could make double-digit capital gains annually, cost-free and risk-free… or so they thought. As long as home prices kept rising and interest rates kept falling, almost every RMBS was safe. Even if a buyer got into trouble, he could still sell his home for more than he paid or find a way to restructure the debt. On the way up, from 1995-2005, there were very few defaults. Everyone made money, which attracted still more money into the market.

After the equity tranche, typically one or two more risk levels offered higher yields at a lower-than-AAA rating. After those few, thin slices, the vast majority of the RMBS – usually 92% of the loan package – would be rated AAA. With an AAA rating, banks, brokerage firms, and insurance companies could own these mortgages – even the exotic mortgages with changing interest rates or no down payments. With the magic of financial engineering and by ordering the perceived risk, financial firms from all over the world could fill their balance sheets with higher-yielding mortgage debt that would pass muster with the regulators charged with making sure they held only the safest assets in reserve.

For a long time, this arrangement worked well for everyone. Wall Street’s banks made a fortune packaging these securities. They even added more layers of packaging – creating CDOs (collateralized debt obligation) and ABSs (asset-backed security) – which are like mutual funds that hold RMBS.

Buyers of these securities did well, too. Hedge funds made what looked like risk-free profits in the equity tranche for years and years.

Insurance companies, banks, and brokers were able to earn higher returns on assets by buying RMBS, CDOs, or ABSs instead of Treasury bonds or AAA-rated corporate debt. And because the collateral was considered AAA, financial institutions of all stripes were able to increase the size of their balance sheets by continuing to borrow against their RMBS inventory. This, in turn, supplied still more money to the mortgage market, which kept the mortgage brokers busy. Remember all the TV ads to refinance your mortgage and the teaser rate loans?

The cycle kept going – more mortgage securities, more leverage, more loans, more housing – until one day the marginal borrower blinked. We’ll never know whom or why… but somewhere out there, the “greater fool” failed to close on that next home or condo. Beginning in about the summer of 2005, the momentum began to slow… and then slowly… imperceptibly… it began to shift.

All the things the cycle had going for it from 1995 to 2005 began to turn the other way. Leverage, in reverse, is devastating.

The first sign of trouble was an unexpectedly high default rate in subprime mortgages. Beginning in early 2007, studies of 20-month-old subprime mortgages showed a default rate greater than 5%, much higher than expected. According to Countrywide Mortgage, the default rates on the riskiest loans made in 2005 and 2006 is expected to grow to as high as 20% – a new all-time record. The big jump in subprime defaults led to the first hedge-fund blowups, such as the May 2007 shutdown of Dillon Reed Capital Management, which lost $150 million in subprime investments in the first quarter of 2007.

Since Dillon Reed Capital, dozens of more funds have blown up as the “equity slice” in mortgage securities collapsed. Remember, these equity tranches were supposed to be the “speed bumps” that protected the rest of the buyers. With the safety net of the equity tranche removed, these huge securities will have to be downgraded by the rating agencies. For example, on July 10, Moody’s and Standard and Poor’s downgraded $12 billion of subprime-backed securities. On August 7, the same agencies warned that another $1 billion of “Alt-A” mortgage securities would also likely be downgraded.

Now… these downgrades and hedge-fund liquidations have hugely important consequences. Why? Because as hedge funds have to liquidate, they must sell their RMBSs, CDOs, and ABSs. This pushes prices for these securities down, which results in margin calls on other hedge funds that own the same troubled instruments. That, in turn, pushes them to sell, too.

Very quickly the “liquidity” – the amount of willing buyers for these types of mortgage-backed securities – disappeared. There are literally no bids for much of this paper. That’s why the subprime mortgage brokers – the Novastars and Fremonts – went out of business so quickly. Not only did they take a huge hit paying off the early defaults of their 2005 and 2006 mortgages, but the loans they held on their books were marked down, with no buyers available and their creditors demanded greater margin cover on their lines of credit… poof… The assets they owned were marked down, they couldn’t be readily sold, and they had no access to additional capital.

The failure of the subprime-mortgage structure – which started with higher-than-expected defaults, led to hedge-fund wipeouts and then to mortgage broker bankruptcies – might have been contained to only the subprime segment of the market. That’s why we jumped in during late spring and recommended the higher-quality mortgage firms, such as Thornburg and American Home. We believed that the higher quality of these firms’ underwriting would prevent a similar run on the bank.

But… the risk spread because of the financial engineering.

With Wall Street wrapping together thousands of mortgages from different underwriters, it’s likely that hundreds of financial institutions around the world have traces of bad subprime and Alt-A mortgage debt on their books. Parts of these CDOs were rated AAA. Almost any financial institution could own them – especially hedge funds. Hedge fund investors quickly figured this out – and asked for their money back.

And so, in July, liquidity fears began to creep through the entire mortgage complex. Not because the mortgages themselves were all bad or even because the mortgage securities were all bad – but because all the market players knew a wave of selling, led by hedge funds, was on the way. Nobody wants to be the first buyer when they know thousands of sellers are lined up behind them.

The market “locked up.” Nobody would buy mortgage bonds. And everyone needed to sell. Suddenly even Wall Street’s biggest banks – the very firms that created these mortgage securities – were suffering huge losses, as the bonds kept getting marked down as hedge funds and other leveraged speculators had to sell into a panicked market. In this liquidation, even solid firms, like American Home and Thornburg, were trapped owning new mortgages they couldn’t sell to Wall Street. Meanwhile their banks, worried about the collapsing prices of mortgages, demanded greater collateral.

It’s a classic “run on the bank,” except today the function of the traditional bank has been spread out among several institutions: mortgage brokers, Wall Street security firms, hedge-fund investors, and banks. The real problem is that the long-dated liabilities (a 30-year mortgage) were matched not by reliable depositors, but by fly-by-night hedge funds, which were themselves highly leveraged and subject to redemptions.

That’s why even as the top executives in these firms believed their mortgages were safe and sound, they can’t get the funding they need to hold onto them through the crisis. As Keynes predicted, the lives of every higher-leveraged financial institution is precarious: “The market can be irrational longer than you can remain solvent.”

The hedge funds have no solution. Redemptions will force them to sell. They’ll continue to pressure the market, resulting in huge losses. Hundreds of funds will likely be liquidated.

Wall Street’s investment firms, if they can find additional capital to meet margin calls, might weather the storm… depending on how far it spreads. We saw a move in this direction yesterday when Goldman announced $3 billion in additional funding for its big hedge funds.

For most mortgage brokers, the party is over – goodnight. Something like 90% of them will be out of business by the end of the year.

The only chance they have to survive is very conservative underwriting (which might result in a premium for their mortgage securities) and lots of additional funding. Delta Financial, for example, is renowned for its very conservative underwriting, which requires a substantial (20%) downpayment. The company raised $70 million last week from two investors (one of which is our friend, Mohnish Pabrai) to hang on to its $5.6 billion in on-balance-sheet mortgages. The stock is up 14.5% on the news today. Will it be enough capital? It’s very hard to say. It depends on whether or not the company is able to sell some of its mortgages to raise cash. It depends on whether or not it is downgraded further and the firm receives additional margin calls.

I wouldn’t be surprised to see Thornburg take a similar step – raising funds from existing shareholders. But, for now, Wall Street remains very skeptical the firm will survive. Its shares are down another 46% today.

As analysts, what we got wrong was how far the crisis would spread. We thought by buying the most respected firms with the best underwriting, we could avoid the subprime train wreck. What we didn’t know was how far the subprime sludge had been spread via mortgage securities. The insiders at these firms made the same mistake. They assumed by operating conservatively their businesses would retain a premium price on their mortgage and better access to capital. But in a panic, the baby is often thrown out with the bathwater.

And… we have to consider one more thing. Nobody knows right now how far the crisis will spread. It could certainly get worse. As these mortgage bonds are downgraded, the financial institutions that own them must raise more cash in order to meet liquidity regulations. To hold AAA-rated paper, banks, and other financial institutions need only to maintain $0.56 in capital for each $100 of paper. But as the paper is downgraded, the amount of capital they’re required to hold goes up, exponentially. At a BBB rating, financial institutions must hold $4.80 of capital. At BBB-, they must hold $8 of capital per $100 of asset-backed securities. Thus, as the crisis worsens, the demand for capital from these firms could grow substantially.

We can’t know what will happen. And, as we can’t know, we must stand aside when our trailing stop losses are hit. As I wrote, back in early July, about American Home Mortgage:

Speculation on Wall Street is that “Alt-A” debt will be downgraded next. Most of the loans held by American Home Mortgage are considered “Alt-A” because they have adjustable rates. Even with the high credit scores of the company’s borrowers, if rating agencies downgrade the bonds it holds, the company’s solvency will certainly come into doubt. Whether this happens or not is a moot point for us: Our speculation hasn’t panned out. We should have realized it sooner… but in a few more weeks we might be very glad we got out while we could.