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Links 11/01/2016

Today's news was all about David Bowie, who passed away from cancer. He was an incredibly talented and humorous person with no ego, here are two great interviews:

  1. With Jeremy Paxman: https://www.youtube.com/watch?v=Q0-51IkWpFE
  2. With Conan O'Brien: https://www.youtube.com/watch?v=40c0wjFeFPY

The last two songs posted on his VEVO music channel are prophetic of his imminent death.

  1. Blackstar: https://www.youtube.com/watch?v=kszLwBaC4Sw
  2. Lazarus: https://www.youtube.com/watch?v=y-JqH1M4Ya8


Apologies for the lack of posts since the New Year, I've been meaning to post but have been feeling a little unwell due to side effects from medicine I've been taking. I'll post more frequently when I get better



Retirement financing

Retirement schemes. When workers retire, they need a certain amount of money to tide over this economically non-productive period of their lives. Social unrest can result from not having enough to live on in retirement. Due to the fact that a significant fraction of workers don’t plan for retirement (ask yourself if you proactively do) and the high downsides of social unrest, government and private corporations stepped in to provide retirement schemes. They faced two options, a defined benefits scheme where workers contribute some amount of their salary, and they get a promised set of benefits when they retire (which may not be related to their contributions). The promised set of benefits would be funded from the next generation of workers, who would work to support an older generation. The other, a defined contribution scheme, where workers would contribute a set amount at a regular period, and what they would get back was a straightforward function of what they had contributed over the course of their working lives. When they retired, they would get back their money (either as a one-time payment or series of payments) but that money would be their principal + any investment income they got from it. A retirement scheme must provide some benefit over just preserving principal, otherwise it is better to keep money under your mattress until your retirement.

The rationale for a defined benefits scheme: low volatilty. Defined contributions scheme (e.g. capitalized pension plans) typically invested in the stock market, in order to generate high returns on capital. However, in 1920-1930, those in the Western world who invested in stock markets for retirement found themselves ruined, due to the high volatility of capital returns. Wage growth, though lower than the growth rate of capital, is about 5-10 times less volatile, and is much more reliable and predictable.

The two drivers of a defined benefits scheme – productivity and demography. A defined benefits scheme (AKA a PAYGO or Pay As You Go system) directly transfers wages from active workers to retirees. PAYGO creates “intergenerational solidarity” since the rate of return for the retirement scheme is drawn out of workers’ wages, which is limited by the growth rate of the economy. Therefore workers have a direct interest in ensuring wages rise as fast as possible in the future, by having more children, and investing in schools and universities to train those workers. (There is a minor distinction to be made between funded and unfunded defined benefits schemes – in an unfunded benefits schemes the wages are directly transferred, but in a funded benefits scheme the wages may be held in reserve to pay future retirees. The distinction is in the amount held in reserve, and in both cases the direction of money transfer from the active working to retirees is the same). In mid-20th century continental Europe when these programs were conceived, both productivity growth and demographic growth were high. Consequently economic growth was about 5%. In the 21st century, economic growth is projected to be 1.5%, driven by a falling birthrate. Additionally, older workers began to live much longer (increasing the retirement funding burden). Together, the flattening pyramid of an increasing number of elderly at the pinnacle and a decreasing number of young workers at base are called “the demographic transition” and they have made a PAYGO system unsustainable. Therefore many governments are breaking promises made to an older generation of workers and cutting benefits. Additionally it is unclear if productivity gains will continue – a metaphysical hypothesis that the 20th century was our “miracle” century is called a “Great Stagnation” hypothesis – where we picked low-hanging technological fruit. Another hypothesis is that the 20th century was powered by cheap oil and coal, dirty energy that cannot be continue to be used due to its role in warming the planet, potentially catastrophically.

The flip-side of the coin. The defined contribution scheme has two flavors, one run by government and the other by private corporations. It appeals to “individual responsibility”. The Provident Fund (a defined contributions scheme) was a fund to provide for subjects’ retirement adequacy, funded purely by their own contributions earlier in life. After retirement, subjects would receive a monthly payout from the Provident Fund. The Provident Fund was set up by the British in Malaya in 1955, and was consequently exported to their colonies in Sub-Saharan Africa. The goal of the Provident Fund was to reduce reliance on public assistance from the colonial government (for aging retirees), and it is probable that the British, setting up a welfare state in Britain, set up these Provident funds to minimize the public obligations on the British empire. The Provident fund was taken over by the newly independent Singapore government, and was called the Central Provident Fund (CPF).

Increasing complexity. A pure retirement account features a large amount of idle money which could be put to better use. Subsequently the Singapore government has allowed 5 major uses of funds during the contributor’s working life over the years – homeownership, family protection, healthcare, investment, and education. (Aspalter, p173). In addition, there was also a structural change to CPF made in 2009, where for the first time the possibility of unfunded liabilities arose – because the government introduced an annuity scheme where they took on the risk, not any third-party insurer. CPF Life was an annuity that is mandatory for every citizen meeting a low minimum bar to buy, with guaranteed income for each citizen in retirement. The CPF Board is not longer merely an administrator of funds, but also a shadow insurer with actuarial responsibilities to ensure that the annuities given for each citizen do not overly exceed their contributions, creating unfunded liabilities that require transfers from the Budget.

However a side effect of allowing these options has been a rapid increase in the minimum sum set aside in the CPF, which is the amount locked into the CPF system until the Retirement age, in order to preserve the original goal of retirement adequacy.

Combatting volatility through government guarantees. The value-add of a defined contribution scheme is in its returns, and therefore in the expertise of the fund managers. CPF funds are deducted from the taxpayer, and given to the CPF Board for administration. The CPF Board buys Special Government Bonds from the Monetary Authority of Singapore (MAS), which invests it in the Government of Singapore Investment Corporation (GIC), one of Singapore’s two sovereign wealth funds. However, as already mentioned, the key drawback of this scheme is in the volatility of its returns. The Government explicitly guarantees a 2.5% nominal interest on CPF balances. (Currently there are three sets of Government guarantees: 2.5% nominal interest on all CPF accounts, an additional 1% interest rate on first $60,000 of all combined balances, and SMRA (Special, Medisave and Retirement Accounts) are pegged to 12 month average yield of 10 year Government Securities (10YSGS) + 1%. The 10YSGS were pegged to 4% until 31st December 2013.)

4 questions occur to me as to the wisdom of the system:

  1. The current CPF is endlessly complex (as is every social security system in the world, to increase the options available to the individual citizen). Is it wise to keep it in its current form, or is it better to split into three? It seems that there should be a clear separation into three major categories for CPF – pure retirement adequacy (the bare minimum for the retirement account, and the compulsory purchase of CPF Life), insurance (family protection, and healthcare through Medishield), and investment (education, investment, and home ownership).
  2. Should people have the freedom to opt out of CPF? (with the caveat that the government will not provide for you should you fail to provide for your own retirement)
  3. How can we prevent an elderly retired underclass? Asher and Bali in a 2013 paper (Asher, Bali, p183) mention that CPF real rate of return (1.42%) trailed annual real wage growth (5%) and real GDP growth (7.9%) between 1987-2011. This implies that retirees will be in a relatively poorer position over time against the economy, and will not participate in the country’s future growth – possibly creating a disenfranchised class of old folks who relied purely on CPF savings. We see this in the “tissue aunties”, old ladies who go around hawker centres to sell tissue paper, and cardboard collecting elderly, who are the face of urban poverty in Singapore. It seems there are two options – increased government disbursal, or encouraging supplementary private retirement savings. One option considered by Asher and Bali for government disbursal is for GIC to return more of the differential between their inflation-adjusted return of 5.3% per annum and the minimum nominal return of 2.4%. Another option is to somehow encourage more saving in the working population besides their CPF. However, Singapore is one of the most financially unsustainable countries to live in, with housing and education taking up huge chunks of the working population’s capital. With such burdensome expense over the working populations head, where are the savings going to come from?
  4. The trade-off between the two systems in numbers. The government guarantees of a minimum of 2.5% in nominal returns reduces volatility to almost zero. How does the average CPF rate of return compare with PAYGO system (with similarly low volatility)around the world? Is it higher?


  1. Shamugaratnam, Tharman - Singapore Deputy Prime Minister and Minister of Finance's 2015 Budget Speech on CPF.
  2. Asher, Mukul G  and Bali, Azad Singh - Fairness and Sustainability of Pension Arrangements in Singapore: An Assessment
  3. Aspalter, Christian, Discovering the Welfare State in East Asia.

Quotes August Edition

Amusing quotes, heard.

  • Churchill the racist. A commonplace book by American left-wing intellectual George Scialabba - http://www.georgescialabba.net/mt/. Of which the quote which most struck me - "I do not agree that the dog in a manger has the final right to the manger, even though he may have lain there for a very long time. I do not admit that right. I do not admit for instance that a great wrong has been done to the Red Indians of America or the black people of Australia. I do not admit that a wrong has been done to these people by the fact that a stronger race, a higher-grade race, a more worldly-wise race, to put it that way, has come in and taken their place." - Winston Churchill, 1937, on the Arab inhabitants of Palestine.
  • The fish in America "The fish in America is of equal quality to Japan. But the handling is terrible. The guts are all mashed up, the skin is all screwed up by the time it gets to American ports". 
  • Food in Singapore. "It's hard to run a small food business in Singapore. First, the government gives you rebates for using prepared foods. If you make your own sambal, you don't get any rebates, but if you get it from a big supplier, you can get up to 40% off. This is why the sambal tastes the same everywhere. Another example: iPads grants from the government, to encourage people to run lean by cutting out service staff." Singapore's encouragement of efficiency on the food business, leads to less artisanship. "Additionally there are the restrictive labor laws that prevent Filipinos and other workers from working in F&B".
  • Partners. "There are three kinds of partners in the firm. The 5% with big ideas, who believe that what we do saves the world. Then there's those with big mortgages. And finally there's those with big bladders, able to sit on meetings longer than anyone else."



Happy SG50!

Singapore is 50 years old, which means that I have lived through more than half its extant lifetime.Since my birth 26 years ago in 1989, a dizzying array of changes have taken place. Today, on the 50th anniversary of Singapore's founding, I will briefly mention a few things I appreciate about this little granite outcrop. (not exhaustive)
Enlightened government policies
  1. The economic progress of the nation.The national story of economic development is a source of pride for every citizen. We bask in reflected lustre of two great national development policies - (A) export-oriented industrialization of starting in the 1960s, first manufacture of textiles and then of electronics, and then oil refining. (B) The services economy in developing Changi airport in 1981 and sea ports; as well as developing the financial services industry in the 1990s. This allowed Singaporeans to gain jobs as middle-management for global companies entering Asia. The third financial hub turn in the 00s and 10s has created even greater concentration of wealth which is expressed in a gleaming downtown, but that growth model has led to an increase in the number of foreign citizens, which have put strain on our social contract
  2. A good education - one of the best in the world. Singapore's obsessive focus on education is the key to creating good jobs for its people. To take an example - my own training to be a doctor in JC involved two years of education in the basics of biology and chemistry. I think my training in biology in JC was simply world-class (and better than many American prep schools) - it left me with a very solid grasp of the field's fundamentals - evolution and DNA.
  3. I could mention a few more - the housing policies to ensure every citizen had a stake in the nation, the NEWater project. The PAP government have been very effective municipal administrators.
The people
  1. The friendliness of Singaporeans - who may weather hardship, but are invariably friendly when making the kopi or driving the taxis.
  2. The flowering of civil expression (political and artistic) in the last 15 years, as I have seen peers who have taken paths outside the well-worn tracks of lawyers, doctors and bankers..

The food

  1. Wicked spicing in the roti prata curries, the delicious nasi lemak, silky chicken rice, an endless variety of sweet soups and desserts - Singapore's food may not be the most refined, or the easiest for the digestion, but it has one of the broadest spicing palettes I have seen anyway. This small island - with Cantonese steamed fish, red chilli crabs, peranakan cuisine, and in latter years a smattering of celebrity chef restaurants - has one of the highest varieties of food per square km.

Happy birthday Singapore!



Hearthstone - an appreciation

A significant proportion of my leisure time in the last 3 months has been spent on Hearthstone, the Warcraft card game. I first saw my housemates play this in my senior year at Brown, and picked it up earlier this year after reading an article about it. I think it is one of the most successful games that has been built in the last 3-5 years, and will be a case study for an elegant blend of casual and competitive gaming.
There are four reasons why I like this game very much:
  1. - MATHEMATICAL ELEGANCE. The objective is simple, to reduce the opposing hero from 30 to 0 life before he can do the same to you. Most of the game mechanics are deterministic (though there are a lot of mechanics), and the random mechanics are probabilistic, allowing for smart calculated plays.
  2. - GAME THEORY. One can guess at the opponent's cards for the next turn, and make the play most likely to succeed given the assumptions the opponent has certain cards. There is an element of playing around the opponent
  3. - WIDEST POSSIBLE AUDIENCE The game is turn-based, which allows it to appeal to the widest possible audience. Starcraft and other Real-Time Strategy games are often reflex based, and exclude the older demographic due to their need for a large amount of clicks per minute. Hearthstone's turn-based mechanics make reflexes irrelevant.
  4. - AN OPTIMAL BLEND OF SIMPLICITY AND COMPLEXITY - Simplicity and complexity. Simplicity comes through minimal resource types (three resources: cards, mana, and existing board state through minions and weapons), and complexity comes through a large number of interesting effects for those cards, minions, and weapons.
    1.     - the simplicity draws the casual gamers in. the complexity makes the money. Because the standard cards are good for winning certain games, but you will win it in the same way most of the time. The cards generally just do damage. To get complexity, you will need to invest in card packs, to get the more interesting effects. And you get access to multiple game mechanics.
Why it is so addictive?
- You can get better incrementally at the game by understanding and memorizing the opponent's plays
- You can come up with new concepts and decks based on the wide variety of cards and mechanics available.
I see Hearthstone as a kind of chess, where the top players fascinate through being able to look 2-4 moves ahead, as well as predict the opponent's deck and their moves.

Some inside baseball now for players of Hearthstone.Two of the best players are Kolento and Strifecro, and their Twitch streams/Youtube videos are well worth viewing for anyone who has a passing interesting in top class competitive gaming.

Kolento is I think the world's best player, and his solutions are often very elegant. See this video for example:

  • https://www.youtube.com/watch?v=tawimgtiVIA In this video, the opponent has exactly 17 health. Kolento has 9 damage on board, and can increase it to 14 damage with Nightmare (0 mana) and 16 with Auchenai + Heal (6 mana). He knows the boombot will deal at least 1 dmg to whatever is remaining on board if it dies, but he needs to ensure that nothing else remains on board. How can he guarantee lethal?
  • - The solution is elegant: Nightmare the boombot (+5 /+5) to ensure it survives the first circle of healing (becomes 4 dmg to all minions with Auchenai), hit with all other minions. Auchenai, heal, then double circle to wipe the board and ensure the opposing hero is the only one remaining. He even has time to do the unnecessary play of wild pyromancer
  • https://www.youtube.com/watch?v=aoELc-Jg8yc . Calculation of damage using the priest hero class

Strifecro's style is recognizably different. He often thinks 1-3 turns ahead, and worries about all the possible cases. See this example with the Doomsayer card: https://www.youtube.com/watch?v=PpDyu1objgg


Hearthstone - Some notes on Zoolock and Freeze Mage

Hearthstone is a game where the aim is to reduce the opposing hero from 30 to 0 before your opponent can do the same to you.

There are three forms of resources:
1. Mana (On each turn, you get X amount of mana, where X is turn number e.g. turn 1 = 1 mana, turn 2 = 2 mana) until it maxes out at 10 mana
2. Cards (Every turn you get a card unless you have special cards/minions that draw additional cards for you)
3. Existing board state
    3a. Minions. Creatures you have player on an earlier turn
    3b. Weapons. Weapons are persistent burst damage spells that can last across multiple turns, with restrictions on their use (e.g. a weapon must hit a Taunt minion)

There are two forms of damage possible.
1. Minion damage. You can play a minion (a form of capital investment), and the minion will deal a continuous stream of damage indefinitely until killed. (Health goes to zero)
2. Burst damage (weapons, spells, certain hero powers). This is a one-time investment of resources (cards and mana), to deal damage.
There are two dimensions of burst damage
- Single target vs multiple targets vs area of effect (AOE) - can hit 1,2 or multiple targets
- Restrictions on use. Some can only hit minions, some can hit only heroes, some can hit both.

A standard aggressive (aggro) deck would look like this:
  1. 1. Trade minions and maintain board control (having equal or more minions to your opponent, when your turn begins) while punching face (maximizing face damage of your opponent.) to set up a turn where you can, with "minion damage" and "burst damage" in your hand, be able to bring your opponent down to zero.
  2. 2. Make a difficult for opponent's spells to wipe your board. Here is the "stamp-collecting" part of Hearthstone ("All science is either physics or stamp-collecting") - you need to know the burst damage of the 9 hero classes your opponent is likely to have. (e.g. the Rogue is likely to have a SI Agent which can do 2 damage when put on the board)
  3. 3. Occasionally one can Set up a lethal two turns in advance. One may choose to ignore the opponent's board and go straight for the kill. However this is risky because the permutations for opponent to clear your board and regain initiative is increased. Usually one goes for an intermediate compromise, where we leave 1 enemy minions on board, and go for a play where we are 90-100% sure we have enough damage to kill the opponent. We can increase the odds with taunt minions, which forces the opponent to attack them, leading to inefficient trades..

  • - The zoo warlock is a standard aggressive deck that fulfills conditions 1 and 2 very well.
  • - Minions are easy traded because (1) there are multiple minion spawners (little minions are called "tokens") and (2) there are multiple attack increasers ("activators") that increase the value of those minions.
  • - Boardwipes difficult due to deathrattles. Because of its numerous "deathrattle" minions, (i.e. do something on death) which summon other minions, it is difficult to wipe the zoolock's board.
  • - However the zoolock has a very big downside. If the opponent ever gets board control, the zoolock is very unlikely to win the matchup (<5%). The only comeback cards are Implosion (generates board presence of 1/1s while killing the opponent)and bane of doom (deal 2 dmg and summon a random demon). Those are the only cards likely to give back board control. All the good cards for zoo assume that board control is with zoo, because they buff existing minions, like Power Overwhelming. If you have no board, then you have almost no chance of winning.
  • Zoolock becomes boring after a while, because the win conditions are always the same - take board, hit face, win or lose depending on board control. For the month of June, when I was playing Hearthstone, this was my main deck. I was also stuck around Rank 4 with this deck, since it was very predictable for opponents to face. So I recently tried a completely different deck.

What makes Hearthstone enthralling is that different heroes have multiple ways to win. Take one of the most atypical plays, the freeze mage. It relies on a "Secret" card called "Ice Block" that can save you from fatal damage on your opponent's turn. In that one turn, you will need to either draw the second "Ice Block", or be able to finish the game with "burst" damage from the hand. Therefore the key is to prevent the Ice Block from triggering before Turn 10, such that you have two turns to kill the opponent with a full 20 mana:
  • (A) BURST DAMAGE THROUGH ANTONIDAS. Archmage Antonidas is a 7 mana card that generates a Fireball spell everytime you play any spell. If you have cheap spells, you can stock up enough fireballs to kill a player over two turns. There are two lines of play with Archmage, either
    • (A1) expect him to live. Bait out the opponent's hard removal* earlieror soft removal** and use 3 manafrost nova to prevent him from dying
      •           * Hard removal =  (Polymorphs, Hexes, Siphon Soul, Brawl, Priest Shadow Word Death...)
      •          ** soft removal = (Ironbeak Owl, Mage Fireball + Heropower, Warrior Execute/Shield Slam, Rogue Sap, Paladin Equality Consecrate, Druid Silences,) - they will typically run at most 2, maybe 3.
    •      (A2) Expect him to die and get one turn of value. Then it is necessary to get cheap spells with him. Ice Lances, Frost Bolts, maybe discounted with Thaurissan
  • (B) Bring the opponent down to burst range with Alexstraza. 15 life
    •     Save 15 damage in your hand (Fireball, fireball, frost bolt)
  • (C) Use burn spells in a standard way to bring him down to zero life
    •  We have 12 dmg from fireballs, 6 dmg from frost bolts, 8 potential damage with ice lance, and 10 from pyroblast.
    • This can be increased with the Bloodmage Thalnos or Azure Drake (spell damage +1)
  • The rest of the deck should be used to cycle through the deck of 30 cards aggressively (drawing for your combo, and stalling to prevent dying)
But this makes it particularly vulnerable to a one-card counter, Kezan Mystic, which steals secrets. If it steals Ice Block, then it is very difficult to win because you are generally relying on a one-turn-kill.



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RIP Origa

I recently heard the Russian singer Origa has passed away from lung cancer at the age of 44 - her work with Yoko Kanno on Ghost in the Shell: Stand Alone Complex (SAC) was a beautiful soundtrack to my childhood.

To me, she will always be remembered for a piece of genius - the song Inner Universe that opened the first season of SAC. It is a beautiful mix of ominous electronic staccato beats and angelic singing - the "devil" and the "angel" mentioned in the lyrics.

How many of us can truly say that we have created a perfect piece of beauty? Thank you Origa, as long as this song is heard you will not be forgotten.


In my early to mid-teens I watched quite a bit of anime. And then as I got older, I stopped watching as much anime, but I continued listening to anime soundtracks, searching for beautiful songs like "Inner Universe". To my mind right now, I can only recall three - Inner Universe (above, opening theme for 1st season GITS SAC), Hemisphere (opening theme from RahXephon), and Tank! (opening theme from Cowboy Bebop). The common thread of course is the master composer Yoko Kanno.


Happy New Year 2015!

It's been a long time coming... but now my personal blog (AKA Kenneth Tiong thinks) is now back online, under my own domain name... www.kennethtiong.com.