How a Gangster Rapper Hustled a Corporation & Became a Billionaire

Beats Electronics LLC is the subsidiary of Apple Inc. that produces audio products.  The company was founded as Beats by Dr. Dre was formally established as a company in 2006.  It was founded by well-known music producer and rapper, Dr. Dre and former Interscope Geffen A&M Records chairman, James Iovine.  Beats Electronics LLC has a US market share of at least 60% for headphones priced over US$100., and an estimated market valuation of US$1.5 billion.

The story of how Beats by Dr. Dre became Beats Electronics LLC is the story of how a gangster from the streets outmanoeuvred two major corporations for market domination.  In short, Dre hustled and succeeded.

The official story on Wikipedia and the company website is that Dr. Dre and Jimmy Iovine thought Apple’s earbuds were inadequate.  They said that if their music was going to be pirated, then people should, at least, listen to it with the best equipment possible.  Allegedly, Dre said to Iovine, “Man, it’s one thing that people steal my music; it’s another thing to destroy the feeling of what I’ve worked on.”  This is the publicity spiel.

The story of the rise of Beats Electronics LLC is the story of the demise of Monster Cable.  Monster Cable was founded by Noel Lee in the late 1970s, and made its name in overpriced cables and litigation.  The company was a corporate bully.  Monster sued everybody that had “Monster” in its name.  According to the US Patent and Trademark Office and court records, Monster Cable has gone after a mini-golf course, a thrift shop, a used clothes shop, Walt Disney Co. and Pixar Animation for their film, “Monsters, Inc.,” Bally Gaming International Inc. for its Monster Slots, Hansen Beverage Co. for a Monster Energy drink and even the Chicago Bears, whose nickname is “Monsters of the Midway.”  This aggressive legal strategy did not make them any friends.  And people who have no friends, no matter how big, are vulnerable.

Monster Cable did the actual engineering of the headphones for Beats by Dr. Dre.  Monster Cable had built its market domination more on marketing than product quality.  Its market share was built on the uncertain foundations of brand familiarity.

As an extension of their aggressive litigation strategy, Monster Cable was notorious for claiming patents on basic technological concepts.  An example can be seen in the response from Blue Jeans Cable, from the 28^th March 2008: “Monster Cable recently wrote to us claiming that we had infringed various design patents and trademarks owned by it or by its intellectual property holding company in Bermuda, Monster Cable International, Ltd.  We reviewed the patent and trademark filings submitted by Monster Cable, and found that Monster’s claims were completely frivolous - so frivolous, in fact, that there was something amusingly appropriate about the fact that Monster's letter had arrived in our mailbox on April Fools’ Day.”

In all this, Monster Cable’s products were notoriously no better at doing their jobs than coat hangers, as can be found in this example: Audiophile Deathmatch: Monster Cables vs. a Coat Hanger.  And when there are articles like these, all the litigation in the world is not going to protect the brand.  The cables were copper wires sheathed in plastic.  There is only so much that can be done to make them work better.  The best marketing does not change basic physics.  But that marketing cost was passed on to the consumer, raising the price of a mediocre product exorbitantly.

Thus, Monster Cables had painted themselves into a corner and needed Beats by Dr. Dre more than the latter needed it.  Monster Cables thought that the hype of a celebrity endorsement and the promise of further celebrity endorsements by contacts in the entertainment industry would overcome the negative image it was beginning to develop.  Unfortunately for Monster Cables, Dre and Iovine know exactly who held the cards here.  I would not be surprised that these two had identified this weakness and played Monster Cables from the beginning.

The Beats headphones were terrible.  To quote a passage in How Dr. Dre’s Headphones Company Became a Billion-Dollar Business, Burt Helm wrote that Iovine said, “We got dumped on by audiophiles on Day One.”  He continued, “We wanted to recreate that excitement of being in the studio.  That’s why people listen.”

The story here is a that Beats headphones “were not tuned evenly, like the usual high-end headphones.  They were tuned to make the music sound more dramatic.”  “More dramatic” is an euphemism for “they cranked up the bass.”

It was a rubbish product, but consumers fell for the hype, and from its launch in 2008, the company grew exponentially.  In 2010, Taiwanese consumer electronics manufacturer, HTC, bought out Beats by Dr. Dre for USS309 million.  This buy out is noteworthy because, under its terms, Dre and Iovine eventually actually gained executive control of the company from Monster Cables: After HTC Sale, Dr. Dre & Jimmy Iovine Gain Control of Beats Headphones.

By the 23^rd July 2012, HTC sold half its position to Dre and Iovine, allowing them to control 75% of Beats by Dr. Dre, leaving HTC with the remaining 25%.  Not only that, HTC revealed that it had lent Beats by Dr. Dre US$225 million.  In effect, Dre and Iovine bought those shares from HTC with money they borrowed from HTC through Beats by Dr. Dre, and then loaded the liability on the company they now controlled.

With HTC, themselves a manufacturer, invested into Beats by Dr. Dre with a combined stake of almost half a billion in both equity and debt, Monster Cables were no longer needed.  Monster were understandably unhappy with this and agitated for a better return on their investment – greater market visibility and a substantial payout.  In response, Beats by Dr. Dre ended their partnership with Monster Cables: Monster Will No Longer Make Beats Headphones.

On the surface, it looked counterintuitive, but it was a calculated move.  Monster Cables did not own the rights to a single drawing, idea or even the diagrams for the plastic parts: The Exclusive Inside Story of How Monster Lost the World.  From the very beginning, Monster Cables were outmatched.  When Kevin Lee, son of founder, Noel Lee, went to Los Angeles to negotiate, he had only a bachelor’s degree, no business experience outside of working for his father and no legal support.  He went into a meeting alone, against two men and an entire corporate team.  And in their desperation to enter a new market before their old one collapsed, got into a partnership where they built a business for a rival for free and never realised it until it was too late.

A few months later, Dre and Iovine took advantage of HTC’s financial struggles and bought the remaining 25% from them for US150 million.  Considering the market share and the actual value of Beats by Dr. Dre, this was a bargain.  Dre and Iovine had full control of the company now, which was the next part of the plan.

Ending the agreement with Monster Cables cost them hundreds of millions, and they did not take it kindly.  Considering their litigation history, they predictably tried to sue.  Before the case could go to court, in January 2014, Beats by Dr. Dre revealed its streaming music service.  This was the business they actually set out to build, instead of questionable headphones.  It was a hit with critics, and its success brought a bigger fish to the table: Apple.  Before June 2014, Apple agreed to buy Beats by Dr. Dre for US$3.2 billion, making Dre and Iovine billionaires, and changing the company name to Beats Electronics LLC.

Monster Cables filed a suit, claiming, among other things, that Beats by Dr. Dre stole proprietary headphone technology, that Beats by Dr. Dre unilaterally ending their partnership was illegal, and that Monster Cables were entitled to a portion of the billion-dollar Apple deal.

Here, Monster Cables had not considered the consequences of its actions.  It was outplayed, and still refused to accept that it was outplayed.  Apple was brutal.  Monster Cables had its rights to manufacturing Apple’s products revoked: Apple Revokes Monster’s Authority to Make Licensed Accessories.  How bad is this?  Consider this: Apple Revokes Monster's 'Made for iPhone' License Following Beats Lawsuit, where “According to Monster, 900 of its more than 4,000 products produced since 2008 have been made under the MFi program, and the company has paid out more than $12 million in licensing fees since that date.  Monster lawyer David Tognotti says the move is excessive and ‘shows a side of Apple that consumers don’t see very often.’

David Tognotti, the man who justified Monster Cable’s litigation excesses against smaller businesses, finally said, “Apple can be a bully.”

On the 30^th August 2016, not only did Monster Cables lose its suit against Beats Electronics, Beats Electronics countersued for legal costs.  And this is how a hustle works on a massive scale.

Investment Opportunity: Indonesian Beef Programme

The following is an investment opportunity.  This is an outline of the Trade Catalyst Special Purpose Vehicle (SPV) specifically for the purpose of investing in the Consortium to fund the supply of beef and cattle products to Indonesia.  Our client is in the business of food security for nation states and independent political entities.

To date, over USD 100 million has already been raised from financial institutions and private investors.  ARK Nusantara Pte. Ltd is looking to raise a further USD 5 million through private placement and is offering up to 10% ROI per annum, and are issuing medium term notes (MTN) for a 5-year period.  This means, that in addition to the ROI per annum, the investor gets the principle back at the end of the period.  The company through which the system is run, PT Surveyor International, is rated by Dun & Bradstreet at 5A2.

In the current market, it is almost impossible to find a similar investment with that level of returns that is genuine.  In this case, the buyer is the Indonesian government, through her vehicles for their domestic market, and the suppliers are backed by instruments of the Australian government.  The cattle are fully insured by Lloyds, meaning that even in the unlikely event of loss of a shipment due to force majeure or disease, the investor is still paid a return.

Since the buyer is the Indonesian government itself, there are no tariffs and all imports are cost plus, meaning that the investor is not exposed to market fluctuations.  This ensures that there will always be a profit for every shipment.

For serious, large investment clients, MTN can be issued in alternative currencies to the US Dollar to mitigate against currency exposure.

Serious investors may email me at terence.nunis@gmail.com for the brochure and further enquiries.

Getting What You Really Want by Asking for More

There is a method to any form of negotiation that any woman bargaining for a trinket knows.  A study called “Reciprocal Concessions Procedure for Inducing Compliance: The Door-in-the-Face Technique,” explored the idea of mutual reciprocal concessions, or give and take in negotiations.  Previous studies had shown that the idea of making an initial firm offer and holding to it was not an effective way to negotiate.  The best way is to start higher and allow the other side to negotiate it down to an equitable level.  This is sometimes known as the door in the face approach.

How does it work?  You begin by making a request that you know the other side will not accede to.  And then you come back with what you really wanted in the first place.  The idea behind this is that the person will feel bad for refusing your first request, so when you ask for something lesser, they feel obliged to give in.  People want to appear to be reasonable, and this allows them to do so, but at your benefit.  This works as long as the same person is the one who asked both the greater and the lesser concession.  And that is why, in a negotiating team, there should be only one person making the demands.  This invariably works when there is some sort of relationship where both sides are ready to deal.

This system is used in a gradated scale in the course of the negotiation process, and as the other side denies larger requests, they will increasingly agree to lesser ones, and will eventually offer their own concessions.  This way, both parties leave the negotiating table believing they have achieved something, while at the same time, ensuring that they got what they really wanted.

It is important to end negotiations on an amicable note because this is the beginning of a business relationship.  There is no gain to approaching this as a zero-sum relationship, since this engenders resentment and latent hostility, and this might complicate future negotiations.

The Benjamin Franklin Effect

The Benjamin Franklin effect is a proposed psychological phenomenon, a form of cognitive dissonance, whereby a person who has performed a favour for someone is likelier to perform another favour for that person than they would be if they had received a favour from that person.  

This effect is named after Benjamin Franklin, who is quoted in his autobiography, “He that has once done you a kindness will be more ready to do you another, than he whom you yourself have obliged.”  This is explained with an example in Benjamin Franklin’s autobiography regarding the animosity of a rival legislator when they both served in the Pennsylvania legislature in the 18^th century. He wrote, “Having heard that he had in his library a certain very scarce and curious book, I wrote a note to him, expressing my desire of perusing that book, and requesting he would do me the favour of lending it to me for a few days.  He sent it immediately, and I returned it in about a week with another note, expressing strongly my sense of the favour.  When we next met in the House, he spoke to me (which he had never done before), and with great civility; and he ever after manifested a readiness to serve me on all occasions, so that we became great friends, and our friendship continued to his death.”

Cognitive dissonance theory states that people change their attitudes or behaviour to resolve dissonance between their thoughts, attitudes, and actions.  In this case, the dissonance is between the subject’s negative attitudes to the other person and the knowledge that they did that person a favour.  They rationalise that since they did him a favour, they must like him and adjust their attitude accordingly.

The effect when you do a favour for someone who dislikes you is that they feel beholden to you for that kindness.  The ego is manifest, and it increases their dislike due to this “burden” it places upon them.

In terms of marketing and closing a deal, this can be done as simply as asking to borrow the other part’s pen to write out something for his.  They have done you a small, insignificant favour, but it makes them feel good about themselves and they “like” you.  The client is thus more likely to be favourable.  This is also a useful tool for resolving tension.

Market Crashes are Often Planned

Market crashes, the collapse of commodities prices and their sudden rise; they are not accidental.  They are planned, often to advance a specific geopolitical agenda.  An example would be the record low oil prices.  Antagonists of the United States who are dependent on the energy sector and need the funds to grow their economy are Russia, Iran and Venezuela.  They have all been adversely affected.  This is not some conspiracy theory.  The evidence, the testimony, is there for those who know where to look and have the wherewithal to wade through hundreds of pages of dry reports.

There is a very interesting report called Examining Financial Holdings Companies: Should Banks Control Power Plants, Warehouses & Oil Refineries.  It began when Senator Sherrod Brown, the chair of the Senate Banking Subcommittee on Financial Institutions & Consumer Protection, opened a hearing to probe into the connectedness of major Wall Street banks to the holding of physical oil assets in July 2013.  This pertained to the ability of these companies to manipulate oil prices.  And we have not considered other commodities.  The findings of the hearing were damning.  This prompted an investigation by the Senate’s Permanent Subcommittee on Investigations, which was published as “Wall Street Bank Involvement with Physical Commodities.”

Highlighting only Morgan Stanley as an example, the report stated, “One of Morgan Stanley’s primary physical oil activities was to store vast quantities of oil in facilities located within the United States and abroad.  According to Morgan Stanley, in the New York-New Jersey-Connecticut area alone, by 2011, it had leases on oil storage facilities with a total capacity of 8.2 million barrels, increasing to 9.1 million barrels in 2012, and then decreasing to 7.7 million barrels in 2013.  Morgan Stanley also had storage facilities in Europe and Asia.  According to the Federal Reserve, by 2012, Morgan Stanley held ‘operating leases on over 100 oil storage tank fields with 58 million barrels of storage capacity globally.’”  With more than 68 million barrels of storage capacity, and their control of financial derivatives, it is inconceivable that there is no market manipulation.

We have not fully quantified the actual holdings of major Wall Street banks.  Likely, the numbers would be staggering.  They are in a position to significantly affect global prices on an unprecedented scale, using supply and demand levers, derivatives and other bank instruments to control fund movements.  They control the physical commodity, the logistics, the physical funds and the financial instruments that dictate the movement and availability of funds.

And yet, this report has not been mentioned in any major news source.  This despite the report stating, “Due to their physical commodity activities, Goldman, JPMorgan, and Morgan Stanley incurred increased financial, operational, and catastrophic event risks, faced accusations of unfair trading advantages, conflicts of interest, and market manipulation, and intensified problems with being too big to manage or regulate, introducing new systemic risks into the U.S. financial system.”

In January 2014, Norman Bay, director of the Office of Enforcement, the Federal Energy Regulatory Commission, testified before the Committee on Banking & Financial Institutions & Consumer Protection Subcommittee, “A fundamental point necessary to understanding many of our manipulation cases is that financial and physical energy markets are interrelated: physical natural gas or electric transactions can help set energy prices on which financial products are based, so that a manipulator can use physical trades (or other energy transactions that affect physical prices) to move prices in a way that benefits his overall financial position.  One useful way of looking at manipulation is that the physical transaction is a ‘tool’ that is 5 used to ‘target’ a physical price.  For example, the physical tool could be a physical power flow scheduled in a day ahead electricity market at a particular ‘node’ and the target could be the day ahead price established by the market operator for that node.  Or the physical tool could be a purchase of natural gas at a trading point located near a pipeline, and the target could be a published index price corresponding to that trading point.  The purpose of using the tool to target a physical price is to raise or lower that price in a way that will increase the value of a ‘benefitting position’ (like a Financial Transmission Right or FTR product in energy markets, a swap, a futures contract, or other derivative).”

And this is extended to other major commodities as well.  The Senate Subcommittee report noted right at the beginning, “Goldman Sachs, in its own words, now engages in the production, storage, transportation, marketing, and trading of numerous commodities, including crude oil products, natural gas, electric power, agricultural products, metals, minerals, including uranium, emission credits, coal, freight, liquefied natural gas, and related products.  This expansion of our financial system into traditional areas of commerce has been accompanied by a host of anticompetitive activities, speculation in oil and gas markets, inflated prices for aluminium and, we learned, potentially copper and other metals, and energy manipulation.”

For specific examples of market manipulation, I suggest reading Testimony of Norman C. Bay Director, Office of Enforcement Federal Energy Regulatory Commission before the Committee on Banking, Financial Institutions & Consumer Protection Subcommittee, United States Senate, 15th January 2014.

Aside from market manipulation, there is another risk factor that most people would not be aware of.  As the Senate subcommittee report stated, “This traditional economic efficiency-based argument, however, misses or ignores a crucial fact--namely, that running a physical commodities business also diversifies the sources and spectrum of risk to which FHCs become exposed as a result.  Let us imagine, for example, that an accident or explosion on board an oil tanker owned and operated by one of Morgan Stanley's subsidiaries causes a large oil spill in an environmentally fragile area of the ocean.  As the shocking news of the disaster spreads, it may lead Morgan Stanley's counterparties in the financial markets to worry about the firm's financial strength and creditworthiness.  Because the full extent of Morgan Stanley's clean-up costs and legal liabilities would be difficult to estimate upfront, it would be reasonable for the firm's counterparties to seek to reduce their financial exposure to it.  In effect, it could trigger a run on the firm's assets and bring Morgan Stanley to the verge of liquidity crisis or collapse.

But there is more.  What would make this hypothetical oil spill particularly salient is a shocking revelation that the ultimate owner of the disaster-causing oil tanker was not ExxonMobil or Chevron, but Morgan Stanley, a major U.S. banking organisation not commonly associated with the oil business.  That revelation, in and of itself, could create a far broader controversy that would inevitably invite additional public scrutiny of the commodity dealings of Goldman, JPMC, and other Wall Street firms.  Thus, in effect, an industrial accident could potentially cause a major systemic disturbance in the financial markets.  These hidden contagion channels make our current notion of interconnectedness in financial markets seem rather quaint by comparison. FHCs’ expansion into the oil, gas, and other physical commodity businesses introduces a whole new level of interconnections and vulnerabilities into the already fragile financial system.”

In summary, all it takes is that one major disaster, that one shock that is not planned, that would make those who are aware nervous, leading them to take a position to limit their exposure to the bank affected.  This sudden tightening in credit would have a tremendous cascading effect that would bring down the bank affected, the banks and financial institutions exposed to the bank affected, and by extension, most of the US economy, followed by the rest of the world.  This is the scale of that house of cards.

Money Laundering is Not What You Imagine It to Be

Money laundering is the process of transforming the proceeds of funds of indeterminate origin, likely criminal, into legitimate money or assets.  Nowadays, it refers to many other forms of commercial crime, or regulatory irregularities.  There is also the phenomenon of reverse money laundering.  Reverse money laundering is the process of disguising a legitimate source of funds for use in illegal enterprises.

According to the United States Treasury Department, “Money laundering is the process of making illegally-gained proceeds appear legal.  Typically, it involves three steps: placement, layering and integration.  First, the illegitimate funds are furtively introduced into the legitimate financial system.  Then, the money is moved around to create confusion, sometimes by wiring or transferring through numerous accounts.  Finally, it is integrated into the financial system through additional transactions until the “dirty money” appears “clean.””

Many countries treat fund movements in breach of international sanctions, or even their own currency control regulations, as money laundering.  Some even define money laundering as obfuscating sources of money, either intentionally or implicitly.  Some places consider it money laundering to move funds generated from activities that are a crime in that jurisdiction, even if it was legal where the actual conduct occurred.  Thus, “money laundering” is not always money laundering.  And this is problematic.

Although it is impossible to reliably estimate, it is thought by those of us in the industry that perhaps 10% or more of the global economy is involved in laundering.  The International Monetary Fund estimated it conservatively at 5% in 1996.  20 years later, that estimate seems hilariously small.

The biggest money launderers are not crime bosses or even individuals.  They are governments.  And governments have a lot of reasons to launder vast amounts.  Rogue states such as North Korea, and quasi states such as ISIS, need to trade and move funds.  Both they and their customers are laundering.  Some countries use this to acquire or facilitate the movement of hard currency.  Some countries use this to mask their involvement in certain activities, such as China’s building of infrastructure in the South China Sea to stake claims in disputed territories, or to hide the extent of their indebtedness.  At a smaller level, businessmen need to move funds to facilitate business, particularly in places such as Indonesia and Malaysia due to corruption and currency controls.  And then there is illegal cross border trade, such as in Indochina.

Officially, the main concern of governments regarding the billions of US dollars laundered in the black economy is large scale criminal enterprises and terrorism.  The real reason is political control and revenue.  Another reason, of course, is that when it comes to laundering, governments do not like competition.

There are many ways of laundering money, and some methods can move surprising amounts of funds quickly undetected.  For example, used car businesses are a simple way to launder money.  Selling a used car afford many opportunities to inflate the cost to justify movements of funds that come out clean on the other end.  They include:

1. Payments to a vendor by unrelated third parties;

2. False reporting, such as misclassification, and under-valuation;

3. Carousel transactions, which is the repeated importation and exportation of the same shipment; and

4. Double invoicing.

And that is just for the cars.  A lot more shenanigans can be done with car parts and accessories, meaning that a single shipment can be inflated by several degrees, and is useful for the purposes of layering funds on a massive scale.

Other legitimate businesses are also used.  This is for the layering and integration process.  People need to use that money, and need to create a reason for that money to be there.  For it to work, it has to be a cash business so that there is minimal documentation of transactions.  This makes inflation possible.  This also means that they have to pay taxes, but in reality, that is another avenue for tax fraud.

There are many accounting tricks and methods where a company can be used for laundering money, particularly when engaging in a legitimate business as cover for an illegal one.  For example, a trading company can be a front for smuggling.

For something on a smaller scale, there are stored value cards, SVCs.  They are a fast, reliable, and anonymous method for storing cash.  It is unwieldy to move money in the tens of millions, but this is more than adequate to store and carry several hundred thousand dollars.  They are a favourite method in cross border narcotics trades.

A new method uses bitcoins, the virtual currency.  Bitcoin is the currency of the deep web.  Its advantage is that a single bitcoin is worth several hundred dollars.  At the time of April 2016, a single bitcoin was worth over US$400.  Also, this is a peer-to-peer financial transaction with no intermediary, allowing a level of anonymity.  The disadvantage is that, on their own, bitcoin transactions are recorded in a blockchain, a sort of public ledger, meaning that transactions are relatively transparent.  But there are now tools to bypass this as well.

Perhaps the simplest way is to have shell companies.  A shell company is a seemingly legitimate business, but provides no actual services.  The sole purpose of a shell company is to create the illusion of legitimacy by creating a documentary trail to justify illegitimate funds.  These funds are used to purchase assets such as real estate, commodities or even art, and the proceeds cashed out through other entities, or simply kept in a tax haven.  Shell company are also used to purchase assets to mask the identity of the true fund owner.

China uses shell companies to borrow vast sums of money without booking it under their debt.  This allows the government to hide its true public debt levels as a percentage of GDP, by counting it as private debt.  China’s true estimated debt to GDP ratio is almost 300%.

Then, there is the hawala, an informal banking system from ancient India.  The term means “money transfer without moving money.”  The hawala consists of thousands upon thousands of hawaladars, brokers, throughout the world, wherever you find the Indian subcontinent diaspora.  Each of them keeps a detailed ledger of transactions that relies on an honour system to enforce.  An individual, wanting to send money to another person in a different town, region or even another country, simply gives the money to his local hawaladar.  This money does not move. Instead, the hawaladar will communicate to the hawaladar in the recipient’s side.  That hawaladar will settle the balance, minus a commission.  The hawaladars settle up each other separately.  This is a nearly untraceable money transfer in the billions of dollars.  There is no paper trail, and total anonymity.  This makes it perfect for tax avoidance.

In summary, almost all strata of society actively engaged in various forms of money laundering for a variety of reasons, from nefarious to simple tax evasion.  In sum, the amounts are enormous, and the players are very well-connected.  Whenever somebody gets caught, the amounts, which may sum astronomical, are actually a drop in a very large ocean.  The sum total of all currency in circulation is just shy of US ten trillion.  The illicit amount uncovered by a single leak in a single firm in Panama was more than twice that.  How much do you think an actual financial centre such as Singapore or Hong Kong launders, and how much of it is hidden in these places?

Critical Illness Spotlight: Diabetes

Even when you are young, there is still a need for hospitalisation and critical illness insurance plans.  One reason, for Singaporeans, is diabetes.  According to a Channel NewsAsia report, dated the 16^th March 2015, Singapore’s diabetes patients are amongst the youngest in Asia.

The report said, and I quote, “A local study on patients with Type 2 diabetes across nine Asian territories showed that Singapore has the highest proportion of younger patients.  The study among 319 patients was conducted by the Asian Diabetes Foundation from 2012 to 2014, and included patients from Singapore, Thailand, China, the Philippines, Hong Kong, India, South Korea, Taiwan, Thailand and Vietnam.  The study found that three in 10 patients in Singapore had diabetes before turning 40.  Younger patients also fared poorly in terms of glucose control, hypertension and cholesterol management compared to older patients.”

According to statistics, almost 500,000 Singaporeans have Type 2 diabetes.  Diabetes mellitus Type 2, the most common form of diabetes, is a metabolic disorder with effects that get progressively worse over the long term.  It is characterised by high blood sugar, insulin resistance, and the relative lack of insulin.  The most common symptoms are increased thirst, frequent urination, and unexplained weight loss.  They may also include increased hunger, lethargy, and sores that do not heal.  Often symptoms come on slowly.  In the long-term, there will be complications such as high blood sugar, heart disease, strokes, diabetic retinopathy which may result in blindness, kidney failure, and poor blood flow to the limbs which may eventually necessitate amputations.

Type 2 diabetes is primarily due to obesity and a lack enough exercise in people who are genetically predisposed.  This lack of exercise and increased obesity is increasing amongst Singaporeans.  Whilst treatment is possible through lifestyle changes, and medication, you must still deal with the possible long-term consequence.  And that means future possible treatment.

According to the Straits Times report, published on the 12^th February 2015, more people here and around the world are succumbing to diabetes.  Worldwide, it is expected to affect 66 million people, which is more than double the 171 million in 2000.  This is according to the World Health Organisation.

There are critical illness plans that specifically cover complications from diabetes and there are provisions in plans that do not specifically mention diabetes but cover its complications as part of the plan, all this providing that none of them are a pre-existing condition.  So a critical illness plan will cover heart disease, liver failure and stroke even if the plan itself does not mention diabetes.  Like any sort of plan, it is generally advisable to take the up when you are young and healthy.  Should complications develop, you want to be thinking of treatment, not how to pay for them.