All about what is happening in the global economy...
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Moving into October, after the typically worst month of the year (September), we find October to be the month of crashes... not a good record really.
And... to see these reports on the first day of October is an omnious sign, if at all.
http://www.marketwatch.com/story/new-greek-austerity-plan-short-of-target-report-2011-10-02
http://money.cnn.com/2011/10/02/news/international/greece_budget/index.htm?iid=HP_LN -
next coming report, Non Farm Payroll in the US. This is a high impact news for the global economy
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Hi mad scientist, think you have the passion for investing. Do you think if someone offers u $200,000 to invest and you need to return yearly say with a 5 percent interest charged for loan term of say 5 years, would you take up such offer?
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peapot:
Hi mad scientist, think you have the passion for investing. Do you think if someone offers u $200,000 to invest and you need to return yearly say with a 5 percent interest charged for loan term of say 5 years, would you take up such offer?
Hiya peapot!
Thank you for your vote of confidence... yes, I've had that for years now... only recently, taking it more seriously... just in time as the global movement will also shift wealth across social stratas.
With regards to your question...
I'd restructure the deal...
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Hi MadScientist,
Thanks for all your insights into the global/regional economy and your perceptions of the challenges ahead.
I specifically wanted to get your views/thoughts on the Singapore Real Estate Market. There has been murmurs of a slowdown/scaling back on rental and sale prices. There has also been the implementation of a reinforced stamp duty which is deemed to be somewhat punitive and flushes out the short term investors. I am less optimistic about all these having a dampening effect on the market. I worry that as rest of world (US and EMEA) getting into a bind, we will see hot monies flowing into this part of the world. And as our properties are considered to be somewhat affordable to this flow of funds, we might still get the properties prices trending upwards.
Would love to hear your views. Don’t get me wrong, I prayed for a price correction in the Singapore property market. I just don’t think we will see that happening at all. -
Price correction will be there, and like you I don’t see that coming anytime soon. This is not a rumour, everyone can see that coming, but no-one can truly say when…
Because at the moment everything is in theory (launches, land supply etc), but homing supply in practical is not there yet. Hot money can flow in, but without good rental due to coming large supply and cut in foreigner quota, they get out easily too.
I’m 2nd guessing that at best price will moderate, not fall as long as stock mkt remains volatile and gold prices remains high. As for news on world economy, it doesn’t affect pty mkt on the same scale as stock mkt… -
mummyhk:
Hi mummyhk,Hi MadScientist,
Thanks for all your insights into the global/regional economy and your perceptions of the challenges ahead.
I specifically wanted to get your views/thoughts on the Singapore Real Estate Market. There has been murmurs of a slowdown/scaling back on rental and sale prices. There has also been the implementation of a reinforced stamp duty which is deemed to be somewhat punitive and flushes out the short term investors. I am less optimistic about all these having a dampening effect on the market. I worry that as rest of world (US and EMEA) getting into a bind, we will see hot monies flowing into this part of the world. And as our properties are considered to be somewhat affordable to this flow of funds, we might still get the properties prices trending upwards.
Would love to hear your views. Don't get me wrong, I prayed for a price correction in the Singapore property market. I just don't think we will see that happening at all.
You are most welcomed.
I too pray for a serious correction... But a mild one at best is what I expect. Not just yet, but soon enough.
Why I think that the RPPI will correct:
The global crisis will send shockwaves out and almost all markets will feel the hit.
There will be a recession, and at least job losses.
Leveraged buyers may face some difficulty due to a recession.
The recent run up is technically way above itself and overextended.
What I think will not be a major correction like 2008:
Our floodgates are open... And there is probably backlog of new citizens coming online
Our interest rates are super low
Our supply levels are not ramped up until 2013
We do not have proper capital controls, and are very very unlikely to do so.
The current measures actually work against proper market forces
You are probably right about the fund flows... http://www.dnaindia.com/money/report_singapore-gold-only-safe-havens-russell-napier_1594372
However, in a panic, it will be a panic and fund flows should be running into short term money markets like bonds and USD.
What would follow next is an unintentional synchronized outflow into safe haven assets that have better yields and one of the Asian flavors is SG. Note also that this time, smart and ot money already knows which havens to run to... So the moves would be very much quicker.
We have the power to minimize it but seems like we choose a high price for economic growth.
More importantly, there would be an onset of hyperinflation...
Not only about hot money inflows, which would increase the SGD (counterintuitive to inflation argument for now but bear with me) and make our exports weaker... But also our CPI is linked to COE prices, and the recent announcement tells me that inflation will set due to higher COE. PLUS, the current floods in Thailand will bump our imported rice prices to over $30/10kg bag by the next harvest (which is non-existent).
Property prices would also increase and this adds to the inflationary environment.
Thing is, with bad exports due to apparent high export prices, the growth of our manufacturing sector may be stunted. Which means wage growth is likely to be low.
And, oh yeah, it appears to me that by some longshot, Eurobonds will be the order of the day to save Europe really... The last time a few trillions were pumped, we had a decent inflation... Another trillion perhaps?
It could turnout to be the 70s all over again...
Now... That would signal to me that we are at the beginning of the end. The bubble will burst when interest rates start rising, then leading to the third and final bust.
We can buy cheap properties then, only if we still have any money left...
So, that is my realistic views, subject to change. I may be wrong... And I was about the RPPI in 2009, as I didn't count on inflows. This time, it's part II, and some conditions have changed, whilst others have not. -
Hi dicky, MadScientist,
Thank you for your views. All very useful perceptions for me! Property Markets has always been the last to be affected somewhat given the relatively illiquid nature of the transaction. For serious buyers like myself who has been sitting on the fringe for the past 3 years, it has been an agonising wait so far. Will love to see a dip before making that plunge.
Perhaps the Q3 earnings announcement of the major banks in the coming weeks will send some ripples through. -
hi MadScientist,
curious …
the global economy outlook look dismal. (2011 Q4 ending soon)
if suppose one fine day in future, our global financial hub/ HQ is shifted from US to Europe - any idea which popular, prominent leader likely selected to head this new global financial monetary system ?
at the moment, any market feedback or idea who are some suitable candidates gaining popularity ? -
phtthp:
Hiya phtthp,hi MadScientist,
curious ...
the global economy outlook look dismal. (2011 Q4 ending soon)
if suppose one fine day in future, our global financial hub/ HQ is shifted from US to Europe - any idea which popular, prominent leader likely selected to head this new global financial monetary system ?
at the moment, any market feedback or idea who are some suitable candidates gaining popularity ?
IMHO the shift from US to Europe is a given, but not before the Europe sorts out this mess. Until then, which is a long road, the US will still hold the global financial hub status. I do not have view on which leader as this can be very fluid depending not the times. However, I see that the forerunner looks to be Germany. By far, it is not only the richest European nation, but if it ever leaves the EU, the Mark would be at sky high levels. It may take something of that nature to effect such a movement, and at this point, it is only speculation at best.
From another perspective, a close friend of mine spoke to me about a particular character emerging out of Europe, one of a particular charm, and a particular agenda... In effect to unite the region, and as well to the consequential detriment of mankind as we know it. It is apparently prophecy, but then this is something out of my league. Your question reminded me of that related story btw.
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