x 0

- The increases in development charges (DC), effective today, are generally above market expectations. Average DC rates for commercial use and industrial have increased by 21.7% and 30.9% respectively.

The DOMESTIC INFLATION DEVIL DRIVING COST OF LIVING

- Total Singapore dollar bank loans grew by just 2% MoM in July, the slowest pace in six months, as both businesses and individuals became more cautious amid the global uncertainty and a gloomier outlook.

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A Good Time To Be In Cash

Disclaimer: Past returns are no guarantee of future performance.

The way forward

By Colin Twiggs
August 30th, 2011 3:00 a.m. ET (5:00 p:m AET)

These extracts from my trading diary are for educational purposes and should not be interpreted as investment or trading advice. Full terms and conditions can be found at Terms of Use.

There were plenty of central bankers and economists with glum faces at Jackson Hole, Wyoming this week as speakers reviewed the challenges ahead. So far the global economy has not responded to various rescue plans, with GDP slowing and national debt rising across a whole slew of economies.

Before we look at the daunting challenges ahead,we should review what has already been achieved. We avoided a global banking collapse, an accompanying deflationary spiral and a depression similar to the 1930s. There have been a few side-effects, but do not underestimate the importance of avoiding a deflationary spiral.

Deflationary Spiral

In times of uncertainty, households and corporates save at higher than normal rates. Savings contribute to economic growth when channeled through the financial system into new investment, but in a financial crisis they are applied to pay down debt, causing a savings-investment mismatch. Any amount saved that is not re-invested in the economy, whether it used to pay down debt or buried in a tin at the bottom of the garden, causes a fall in national income.

If 2% of every trillion dollars earned, for example, is used to repay debt, then people who would have supplied 1 trillion dollars worth of goods and services will only receive $980 billion in income. That doesn't seem so bad, but if 2% of the reduced income is similarly applied to repay debt, then income available contracts to $960.4 billion. And keeps contracting each time income is recycled. In extreme cases the above scenario could be replayed many times over before the behavior ends, causing a sharp fall in national income. Repetition of the above cycle twenty times, for example, would reduce available income by a third. That is a deflationary spiral. Something to be avoided at all costs.

Side-effects

The proven antidote to deflation is to run a fiscal deficit: government expenditure in excess of revenue helps to offset the savings-investment shortfall. Stimulus programs, however, have been badly managed, with no thought as to how the burgeoning national debt would be repaid. Mountains of national debt were incurred to head off the deflationary spiral, but there is very little to show for it. Deficits spent on school halls, public fountains, checks in the mail and tax cuts offer no means of repayment. Investment in infrastructure projects that offer a market-related return on investment — that can be used to repay the debt over time — have so far been scarce.

The result of a weak fiscal balance sheet is instability. High unemployment, low consumer spending, restricted consumer credit, and a falling housing market are all consequences of increased uncertainty.

Also, private capital investment remains scarce despite super-low interest rates and cashed up corporate balance sheets. For the same reason that cashed up banks are not lending to small business: uncertainty. Both banks and business face an unpredictable environment, with the possibility of further falls in employment and consumer spending, restricted consumer credit, a falling housing market, unsustainably low interest rates, and the threat of increased taxes. Uncertainty equals risk, and any CEO worth his/her salt would scale back on expansion plans until they have a clearer picture of what the future holds.

Unemployment will remain high and GDP growth low until capital investment is restored. The problem is: how?

Possible solutions

The answer may sound simplistic, but we need to reduce uncertainty to provide business with a stable foundation on which to plan future investment. There are four possible solutions, but none of them are pretty.

The first is austerity: cutting government expenditure to match revenues. Austerity is important but on its own is likely to deliver even lower growth than at present — and risks a deflationary spiral. Cutting government expenditure while private savings are being used to pay down debt, without an equivalent cut in tax revenues, would court disaster.

Raising taxes is another popular option: getting everyone to pay their fair share. Though the notion of fair share varies widely depending on who the speaker is — and who pays their campaign contributions. Revising the tax code to achieve a more equitable distribution of the tax burden may contribute to long-term stability — a fair tax system is more likely to stand the test of time — but increasing tax revenues to repay national debt would also risk a deflationary spiral.

A third solution is massive public works programs similar to those undertaken by China during the GFC. Infrastructure projects directly stimulate local business and increase employment while also delivering savings in unemployment benefits. Government infrastructure investment, however, has a checkered history. Cost overruns and failure to meet revenue projections make private sector funding difficult to obtain. And government funding would further increase the national debt.

The fourth option, a soft default on existing debt, through inflation, is obviously tempting. Debasing the currency by selling Treasurys directly to the Fed, for example, would:

Reduce national debt in real terms
Create a surge in investment demand for real assets as a protection against inflation — lifting stock prices and the housing market
Bail out the banks, who are threatened by shrinking housing prices and
Give currency manipulators a sizable haircut on their existing Treasury investments and discourage further " pegging" against the dollar. China and Japan collectively hold more than $2 trillion in US Treasurys [Washington Post], accumulated to suppress appreciation of their currencies against the greenback and create a trade advantage.

An unwelcome result, however, would be a massive spike in inflation. At some point the Fed would have to raise interest rates sharply, effectively slamming the economy into reverse, in order to cure inflationary expectations. So we could defer the recession for now, in the hope that the economy is on a sounder footing when it re-visits us later.

The way forward

While each of the options has their downside, a combination of the first three seems to offer the best solution. Funding infrastructure investment through a combination of private sector funding, austerity cuts and increased taxes could avoid the risk of a deflationary spiral, with minimal increase in the national debt. It would also facilitate direct channeling of private savings into investment, reduce wasteful government expenditure (through an austerity drive) and could be used to justify a more equitable distribution of the tax burden (if we all benefit we should all expect to pay).

The fourth option, a soft default through inflation, should be seen as a last resort. And is probably why QE3 was not put forward at Jackson Hole last week. Once you awaken the (inflation) dragon, he can prove difficult to slay.

Leave a Comment

Wisdom consists not so much in knowing what to do in the ultimate as knowing what to do next.

~ Herbert Hoover

x 0

A Good Time To Be In Cash

Disclaimer: Past returns are no guarantee of future performance.

The way forward

By Colin Twiggs
August 30th, 2011 3:00 a.m. ET (5:00 p:m AET)

These extracts from my trading diary are for educational purposes and should not be interpreted as investment or trading advice. Full terms and conditions can be found at Terms of Use.

There were plenty of central bankers and economists with glum faces at Jackson Hole, Wyoming this week as speakers reviewed the challenges ahead. So far the global economy has not responded to various rescue plans, with GDP slowing and national debt rising across a whole slew of economies.

Before we look at the daunting challenges ahead,we should review what has already been achieved. We avoided a global banking collapse, an accompanying deflationary spiral and a depression similar to the 1930s. There have been a few side-effects, but do not underestimate the importance of avoiding a deflationary spiral.

Deflationary Spiral

In times of uncertainty, households and corporates save at higher than normal rates. Savings contribute to economic growth when channeled through the financial system into new investment, but in a financial crisis they are applied to pay down debt, causing a savings-investment mismatch. Any amount saved that is not re-invested in the economy, whether it used to pay down debt or buried in a tin at the bottom of the garden, causes a fall in national income.

If 2% of every trillion dollars earned, for example, is used to repay debt, then people who would have supplied 1 trillion dollars worth of goods and services will only receive $980 billion in income. That doesn't seem so bad, but if 2% of the reduced income is similarly applied to repay debt, then income available contracts to $960.4 billion. And keeps contracting each time income is recycled. In extreme cases the above scenario could be replayed many times over before the behavior ends, causing a sharp fall in national income. Repetition of the above cycle twenty times, for example, would reduce available income by a third. That is a deflationary spiral. Something to be avoided at all costs.

Side-effects

The proven antidote to deflation is to run a fiscal deficit: government expenditure in excess of revenue helps to offset the savings-investment shortfall. Stimulus programs, however, have been badly managed, with no thought as to how the burgeoning national debt would be repaid. Mountains of national debt were incurred to head off the deflationary spiral, but there is very little to show for it. Deficits spent on school halls, public fountains, checks in the mail and tax cuts offer no means of repayment. Investment in infrastructure projects that offer a market-related return on investment — that can be used to repay the debt over time — have so far been scarce.

The result of a weak fiscal balance sheet is instability. High unemployment, low consumer spending, restricted consumer credit, and a falling housing market are all consequences of increased uncertainty.

Also, private capital investment remains scarce despite super-low interest rates and cashed up corporate balance sheets. For the same reason that cashed up banks are not lending to small business: uncertainty. Both banks and business face an unpredictable environment, with the possibility of further falls in employment and consumer spending, restricted consumer credit, a falling housing market, unsustainably low interest rates, and the threat of increased taxes. Uncertainty equals risk, and any CEO worth his/her salt would scale back on expansion plans until they have a clearer picture of what the future holds.

Unemployment will remain high and GDP growth low until capital investment is restored. The problem is: how?

Possible solutions

The answer may sound simplistic, but we need to reduce uncertainty to provide business with a stable foundation on which to plan future investment. There are four possible solutions, but none of them are pretty.

The first is austerity: cutting government expenditure to match revenues. Austerity is important but on its own is likely to deliver even lower growth than at present — and risks a deflationary spiral. Cutting government expenditure while private savings are being used to pay down debt, without an equivalent cut in tax revenues, would court disaster.

Raising taxes is another popular option: getting everyone to pay their fair share. Though the notion of fair share varies widely depending on who the speaker is — and who pays their campaign contributions. Revising the tax code to achieve a more equitable distribution of the tax burden may contribute to long-term stability — a fair tax system is more likely to stand the test of time — but increasing tax revenues to repay national debt would also risk a deflationary spiral.

A third solution is massive public works programs similar to those undertaken by China during the GFC. Infrastructure projects directly stimulate local business and increase employment while also delivering savings in unemployment benefits. Government infrastructure investment, however, has a checkered history. Cost overruns and failure to meet revenue projections make private sector funding difficult to obtain. And government funding would further increase the national debt.

The fourth option, a soft default on existing debt, through inflation, is obviously tempting. Debasing the currency by selling Treasurys directly to the Fed, for example, would:

Reduce national debt in real terms
Create a surge in investment demand for real assets as a protection against inflation — lifting stock prices and the housing market
Bail out the banks, who are threatened by shrinking housing prices and
Give currency manipulators a sizable haircut on their existing Treasury investments and discourage further " pegging" against the dollar. China and Japan collectively hold more than $2 trillion in US Treasurys [Washington Post], accumulated to suppress appreciation of their currencies against the greenback and create a trade advantage.

An unwelcome result, however, would be a massive spike in inflation. At some point the Fed would have to raise interest rates sharply, effectively slamming the economy into reverse, in order to cure inflationary expectations. So we could defer the recession for now, in the hope that the economy is on a sounder footing when it re-visits us later.

The way forward

While each of the options has their downside, a combination of the first three seems to offer the best solution. Funding infrastructure investment through a combination of private sector funding, austerity cuts and increased taxes could avoid the risk of a deflationary spiral, with minimal increase in the national debt. It would also facilitate direct channeling of private savings into investment, reduce wasteful government expenditure (through an austerity drive) and could be used to justify a more equitable distribution of the tax burden (if we all benefit we should all expect to pay).

The fourth option, a soft default through inflation, should be seen as a last resort. And is probably why QE3 was not put forward at Jackson Hole last week. Once you awaken the (inflation) dragon, he can prove difficult to slay.

Leave a Comment

Wisdom consists not so much in knowing what to do in the ultimate as knowing what to do next.

~ Herbert Hoover

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Windows 8 has Native Mounting Support for ISOs, VHDs

Wednesday, 31 Aug 2011, 3:06am (11 hours 49 min ago)

Windows 8 has Native Mounting Support for ISOs, VHDs

Windows 8 will be able to mount ISO and VHD files without the need to install third party software such as Daemon Tools or PowerISO. To mount an ISO file, right-click on the file for the mount options or select mount from the enhanced Explorer ribbon. Double-clicking on the file will also do the trick.

For a VHD file, which is a Microsoft proprietary file format for a virtual machine's hard disk, mounting it will make it appear as a hard drive on the Windows 8 system.

It seems that Microsoft is drumming up interests for its new operating system and based on an earlier report, we might get to see a beta version of Windows 8 by early 2012.

For more information on these exciting new features of Windows 8, please follow this link.

(Accessing a VHD)

(Mounting an ISO file)

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Singapore’s first capsule hotel contravenes fire safety rules

SINGAPORE: It is touted as Singapore’s first capsule hotel, offering capsule—style dormitory beds for the cost—conscious traveller.

Barely one month into its operation, the hotel at Ann Siang Road found itself on the wrong side of the law. That is because Matchbox The Concept Hostel failed to obtain a fire safety certificate before opening its doors on August 1.

The Singapore Civil Defence Force has served a notice to the hostel on the offence after conducting an enforcement check.

The hostel offers 30 single—beds and two double—beds for travellers, at between S$45 and S$88 per day.

It said it is working closely with the SCDF to obtain the required certification as soon as possible. For now, the hostel is taking its own safety measures.

Magdalene Wan, the owner of the hostel, said: " We actually have a big fire hose right at our main entrance. Apart from that, little pockets have fire extinguishers...we (also) have two exits and we have very clear exit signs placed all over the place so people will know the direction they are supposed to run."

—CNA/ac

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This did not answer the QUESTION ?

And the 5 tImes prOfIt grOwth ?

pharoah88 ( Date: 31-Aug-2011 11:55) Posted:

Q: Why did margins grow in Q4?

Anthony: In the integrated services side, it is just the current good margins that are coming through. If you look at Q4, gross margins were 12.4% and in FY2010 it was 12.0%, so it is not out of line with the annual figure from last year. It just looks a bit higher compared to 4Q10.

Stuart: Our business is project-driven, and you can get to a stage when we have to take costs. We can’t be clear about the margin until the variation is processed. We can have periods where we have costs without any approved variation to pick up any margin on it.

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CFO Anthony Hardwick believes inflation in western Australia will not affect AusGroup's margins

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Economically, Australia is in a different position as the rest of the world at the moment, according to Ausgroup CEO Stuart Kenny. Photo by Sim Kih

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Q: Why did margins grow in Q4?

Anthony: In the integrated services side, it is just the current good margins that are coming through. If you look at Q4, gross margins were 12.4% and in FY2010 it was 12.0%, so it is not out of line with the annual figure from last year. It just looks a bit higher compared to 4Q10.

Stuart: Our business is project-driven, and you can get to a stage when we have to take costs. We can’t be clear about the margin until the variation is processed. We can have periods where we have costs without any approved variation to pick up any margin on it.

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Q: What edge does Ausgroup have over a competitor like Wah Seong?

Stuart: Insulation is critical to the process. In western Australia, an LNG train brings in gas from offshore.

When natural gas is compressed, it liquefies at –160 degrees Celcius. To keep that product in liquid form, everything has to be insulated. The insulation can be several layers thick.

It’s so critical that we have to train our workers to be able to apply it. They have quality inspectors to inspect how it is applied, and then there are very rigid specifications with the materials and the product that are used.

If you get the application wrong, you can be rejected. So we are one of the few companies in Australia that do this work.

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Q: Can you elaborate on the two projects that dragged down your EBITDA?

Stuart: An LNG train is a very complex structure, and difficult to fabricate with space constraints. You need to have very good people and management systems to work in that environment.

For companies that haven’t done it before, it is very difficult for them to prove that they have the credentials to be able to enter into that market. Our Australian operations, ACG, has these credentials but sometimes we don’t get it right in complex situations.

There were project execution issues in the LNG business coupled with quality issues that were delivered to the site by the modules that the client supplied.

Another one was an iron ore project where modules that came in that didn’t fit as they were supposed to. We were forced into a situation where there was a huge amount of rework.

We have commercial plans to deal with the 38 modules that didn’t fit. We’ve got justification that supports cost recovery but it is still yet unresolved.

We can participate in many stages in the life cycle of an LNG train:
(1) by manufacturing products for the subsea portion and the offshore portion
(2) Onshore piping or structural fabrication work
(3) Structural mechanical piping contract
(4) Providing scaffolding access services
(5) Painting and insulation
(6) Maintenance and on-going support of an operating plant that has been completed

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Orders are looking up, and investors and analysts were given insights into projects handled by AusGroup at its FY2011 briefing on Thursday at the Fullerton hotel. Photo by Sim Kih

AUSTRALIA, WITH ITS committed investment in iron ore development LNG and oil & gas, is the envy of the US and many countries in Europe.

And all the opportunities are now in western Australia, said Ausgroup CEO Stuart Kenny at its FY2011 investor briefing at the Fullerton Hotel on Thu evening.

According to Ausgroup estimates, it stands to benefit from an estimated A$300 billion of major Australia resource projects and planned construction in the next 10 years.

Of this, about A$68 billion of work are projects that Ausgroup can tender for and order books were A$264 million as at end Jun.

Full year revenues were up 64.2%, at A$602.0 million while net profit attributable to shareholders were up 424.0% at A$12.4 million.

The company announced a turnaround in Q4, reversing a A$5.3 million loss in 4Q2010 to a net profit attributable to shareholders of A$4.4 million for 4Q2011.

A final tax-exempt cash dividend of 0.64 Singapore cents has been proposed.

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Grand Hotshot Winner's Portfolio Grew 590%

Gaining $590,840 by Trading Puts
A big congratulations to this year's Macquarie Hotshot contest grand prize winner, Ms. Low Sock Cheng! She managed to grow her $100,000 portfolio to an impressive $690,840 in less than 4 weeks and her secret is... PUT WARRANTS. Ms. Low focused on HSI Put warrant OB8W, which she started buying almost 1 month ago. Ms. Low will be receiving a $15,000 cash prize from Macquarie.

A big thank you to all who participated in the 5th annual hotshot competition. We hope you all have gained valuable trading experience.

Dangerous new phase, but no QE3
Bernanke Friday's speech was a disappointment to the QE3 hopefuls as he announced there is no need for new stimulus at the current moment. U.S. stocks rose on Friday as analysts interpreted that the Fed remained positive on the economic growth. However, on Saturday, the new IMF chief, Lagarde, warned that the threat of global recession remained and we are now in a " dangerous new phase" . She urged global leaders to act in a coordinated manner to support growth.

Olam earnings results
Olam is scheduled to release its FY 11 earnings results after the market closes tonight. Olam shares closed at $2.26 last Friday, almost unchanged week-on-week.

Code	Name	Type	Expiry	Exercise Price
OW7W	Olam MBeCW120305@	Call	05-Mar-12	2.50

New Oct HSI warrants listing
Macquarie is pleased to list the following new warrants this morning:

Code	Name	Type	Expiry	Exercise Price
O1VW	HSI18200MBeCW111028@	Call	28-Oct-11	18200
O1WW	HSI18600MBeCW111028@	Call	28-Oct-11	18600
O1XW	HSI19200MBeCW111028@	Call	28-Oct-11	19200
O1YW	HSI19600MBeCW111028@	Call	28-Oct-11	19600
O1ZW	HSI18000MBePW111028@	Put	28-Oct-11	18000
O2AW	HSI18400MBePW111028@	Put	28-Oct-11	18400
O2BW	HSI19000MBePW111028@	Put	28-Oct-11	19000
O2CW	HSI19400MBePW111028@	Put	28-Oct-11	19400

Macro announcements this week
Mon 29 Aug: US Personal Spending (Jul), US Pending Home Sales (Jun)
Tue 30 Aug: US Consumer Confidence (Aug), FOMC Meeting Minutes (Aug)
Wed 31 Aug: US ADP Employment Change (Aug), US Factory Orders (Jul)
Thu 1 Sep: PRC HSBC Manufacturing PMI (Aug), US ISM Manufacturing (Aug), US Initial Jobless Claims
Fri 2 Sep: US Non-farm Payrolls (Aug), US Unemployment Rate(Aug)

iPunter ( Date: 27-Aug-2011 13:10) Posted:

Sifu is right...

We can actually see how mere words

can soot the stock market up and down... lol... Smiley

stoheart72 ( Date: 27-Aug-2011 12:27) Posted:

Bernanke's speech didnt reveal too much of a direction up or down, I guess the market is still volatile in the coming days if not weeks until FOMC meeting in september. But having the Dow going green after his speech last night and HSI made some lost in the last session, we should see some climb in the Monday session if HSI get affected by the US market result. However, this is just my views, as I said the market is still volatile, anything could happen lol. Good luck

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PUT

PU T

P U T

x 0

29th August 2011

Top Story: Banking – History suggests potential sector derating ahead Neutral (down from OW)

Sector Update

Maybank:

Fair value and call downgraded to RM8.85

Market Perform (down from OP)

CIMB: Fair value at RM7.49 (from RM8.80) Market Perform

Public Bank: Fair value and call downgraded to RM14.10 Market Perform (down from OP)

HL Bank: Fair value at RM11.89 (from RM12.50) Market Perform

AMMB: Fair value and call downgraded to RM6.15 Underperform (down from OP)

AFG: Fair value at RM3.38 (from RM3.60) Market Perform

Affin: Fair value and call downgraded to RM2.77 Underperform (down from MP)

Macro View

Money Supply: Broad monetary aggregate and loan growth eased in July

Economic Highlights (published 26 Aug 2011)

¨ The broader money supply, M3, eased to 11.6% yoy in July, off the 30-month high of +12.4% in Jun but higher than +11.5% in May, indicating that economic activities are cooling but remained resilient.

Sector Call

Banking: Jul ‘11 system data – Loan growth and leading indicators softened Neutral

Sector update

¨ Jul ’11 system-wide loan growth eased further to 12.9% yoy, as compared to +13.5% yoy in Jun ’11 following lower disbursements during the month (vs. Jun).

Oil & Gas: Petronas 1QFY12/11 results Overweight

Sector Update

Dialog: Fair value at RM3.90 Outperform

P Gas: Fair value at RM14.47 Outperform

RH Petrogas: Fair value at $1.36 Outperform

Dayang: Fair value at RM2.33 Outperform

Petra Perdana: Fair value at RM1.15 Outperform

Wah Seong: Fair value at RM2.66 Outperform

Petronas Chemicals: Fair value and call downgraded to RM6.37 Market Perform (down from OP)

Kencana: Fair value at RM2.99 Market Perform

SapuraCrest: Fair value at RM4.56 Market Perform

KNM: Fair value at RM0.93 Underperform

MMHE: Fair value at RM5.62 Underperform

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Banking stocks are seeing considerable weakness on the day, dragging the KBW Bank Index down by 1.4 percent.

Notable losses by Bank of America (BAC) and Zions Bancorp (ZION) are helping to pull the index down off the nearly one-month closing high it set on Monday.

BAC is working for Warren Buffet instead of shareholders.

It pays 6% on 5 Billion Preference shares.

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AUGUST 2011

Singapore banks

Credit Ratings

AA-

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Raff les Education
S$0.435 | Neutral
Credit Suisse upgrades Raffles Education to Neutral from Underperform given the stock’s recent underperformance and keeps S$0.45 target price.
It says Raffles Education reported weak Q4 results, with revenue down 19 per cent on year, and excluding S$76.8 million in revaluation gains on its OUC investment property, “would have reported S$14.2 million net loss, marking the worst quarterly performance since listing”.

House says Raffles Education’s earnings outlook in China remains challenging, but it sees further traction from new colleges across Asia and upside from larger-scale university projects in Malaysia, India and Australia.

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The insanity of patent warfare

What a shame that a precept conceived to incentivise innovation, has been corrupted into threatening it

Sarabjit Singh

Google surprised many industry watchers last week with the announcement that it is purchasing Motorola’s mobile phone division for US$12.5 billion (S$15.1 billion). According to the BBC, the deal “gives the search giant access to a range of technology patents (which) means extra ammunition in the spiralling arms race of suit and counter-suit”.National Public Radio in America published a story last month on the growing number of “companies without employees or operations” that are filing lawsuits using obscure patent claims that “would make pretty much the entire Internet guilty of infringing”.

Even before this development however, this arms race had already descended into something much worse — an ugly battle over patents that has pulled in companies both big and small.

Earlier this month, a court in Germany ruled that Samsung’s latest gadget, the Galaxy Tab 10.1, may be infringing on Apple’s patents, effectively banning the Korean company from launching its tablet in most countries across Europe. The ruling marked another in a series of setbacks for Samsung, which now stands alongside HTC and Motorola at the receiving end of the world’s biggest company’s lawsuits.

Then there is Microsoft, which has developed an IP strategy that strangely allows it to make more money from Google’s Android operating system than it does from its own Windows Phone 7. Citigroup analysts estimate that for every Android licence that HTC gets from Google (for free), the company pays US$5 to Microsoft — a small fee to avoid a lawsuit claiming that the Android OS infringes on Microsoft’s patents.

Even more bizarre are the patent trolls — companies that have no interest in developing new products but are buying patents only to sue anybody out there who may be even remotely infringing on them. The

Welcome to the wonderland of 21st century intellectual property, where a patent portfolio is much more than mere defensive armour. It is an asset that can be monetised on its own merit — that is, leased, sold, or if the patent holder has no intention to use it productively, even used for extortion.