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!!!

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In news just out, GIC has agreed to convert its preferred stake in Citigroup to Common Equity, to go along with the US government’s continued bailout plan for the company.

GIC converts preferred notes in Citigroup to common shares
By May Wong, Channel NewsAsia | Posted: 27 February 2009 2026 hrs

SINGAPORE: The Government of Singapore Investment Corp (GIC) has said it will convert its convertible preferred notes in the US lender Citigroup to common stock in a bid to help shore up the troubled US lender.

The exchange price is US$3.25 a share – a 32 per cent premium to Citigroup’s closing price on Thursday. The price is way under the conversion price of US$26.35 a share under the original terms of the investment.
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Well well, things are getting exciting. All of us know that GIC is reported to have incurred losses of US$33 Billion. All of us know that the government keeps on saying that GIC & Temasek are long term investors. And guess what, the press reported that GIC expects long-term returns from its bank investments (and I think, that’s what Temasek expects as well)

Singapore’s GIC Loses $33 Billion as Assets Tumble, WSJ Says
By Andrea Tan and Chris Peterson

Feb. 17 (Bloomberg) — Government of Singapore Investment Corp., one of two sovereign wealth funds owned by the island, lost as much as S$50 billion ($33 billion) in 2008, the Wall Street Journal said, citing two people familiar with the matter.

The fund doesn’t plan to get rid of its investments including in Citigroup Inc. and UBS AG even as asset values plummet, the newspaper said. GIC expects the two banks to provide substantial long-term returns, according to the report.

Sovereign wealth funds in Asia and the Middle East have pumped money into global financial institutions to help replenish capital eroded by writedowns and losses that have topped $1 trillion globally. GIC, overseeing more than $100 billion of reserves, has invested about $18 billion in UBS and Citigroup since December 2007.

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Late 2007 and early 2008, GIC made a couple of investments in UBS and Citigroup. A few months later, the stock prices of these investments had declined, but Lee Kuan Yew was quoted in the press as saying:

“The franchise of the banks, the expertise that they have, under proper leadership, they will be able to recover and rise again … Will there be another Swiss bank like UBS for wealth management? I doubt it, we doubt it, that is why we invested in it.” Citigroup, he added, had “an enormous spread worldwide as a retail bank”.

Recover and rise again?

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But Pandit seriously doesn’t have much of a chance. Wells Fargo is paying much more and is not requiring any assistance from FDIC, in contrast to Citigroup’s relatively pathetic bid which involved “FDIC agreeing to absorb up to $42 billion in losses should Wachovia’s $312 billion pool of loans later turn sour.” The withdrawal of FDIC involvement will surely mean a goodbye to Citi’s bid for Wachovia, but Pandit must have known better than to expect that his paltry offer would have been the best in the market.

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