2010: What next?

[Vulcanl]

Q3 is almost upon us and so it is not too early to start looking at next year and what may come to pass.  These are my initial thoughts:

*Inflation will start showing up in the stats and become a headache for Asian governments (not so much for the West).  This means higher interest rates and stronger currencies in this part of the World
*Bankers have not reformed, and I was way too naive to think they ever would. This means we should look forward to ever more dislocation. The need to hedge by owning REAL assets will be ever greater
*The Singapore property market will be very boring in that we will not see much appreciation or declines.  I do not expect the crash in properties that Kubes longs for.  There clearly is a base of support
*I like US Tech stocks.  Buying Nasdaq trackers now makes a lot of sense to me.  Rationale here is that innovation will be a component of the USA's recovery
*Needless to say Emerging markets will continue to remain strong, but it is my hope that increases are more rational.  What happened this year was probably too much to soon and we have borrowed from future appreciation

[my thots]

There will be no crash but slower steadier growth.  CBD property prices will rise as the IR nears completion and the overall economy will strengthen in general. 

Nope no crashes and not hoardes of expats getting pink slipped.

Future looks good for all of us here.

[Sunrayser]

2010? What can be ascertained is that interest rates will go up. It's just a matter of who blinks first, most likely Australia. RBA has been getting fidgety lately, wouldn't be surprised if they start raising rates before year end. Then the domino effect kicks in and other countries will follow suit.

[Vulcanl]

Indeed...all of this is connected.  As Asia acts to head off inflation, it will put ever more pressure on the USD.  The collapse is already under way, it just took longer than I expected it to.

[few things]

Rates will rise globally and cause house price falls.

Stock markets will dump but not back to march levels and start recovering around a year from now but gradually.

Of the major economies uk stock will outperform (but still fall on an absolute basis) on optimism for govt change.

[rates in 2010]

will not rise above 3.5% in Singapore and Singapore property prices will continue to go through the roof.

[yeah but]

Rates of 3.5% would cause half the nation to be bankrupt.

[Oh no]

they would not. Do some sums

[to pp]

I'm paid to do sums, interest that high on earnings multiples here woukd be catastrophic

[gram]

There still seems to be a danger that equity markets in general could have another 20-30% upside before coming to a pause, probably by the first or second quarter of 2010.
I'm looking for the Dow to be around 11500-12000 by that time.
Even if central banks put on the brakes, the correction would certainly be quite slow and nothing like what happened in 2008/09.
So, investing in the equity markets seems to me to be quite a safe thing to do for the next half-year at least. I would expect there to be plenty of time to get out if need be, whenever the pullback comes.

[thursday guy]

To my mind, the bank opening its doors to more borrowers only means one thing, more speculation and probably a 20% surge in house prices until the interest rate gets whacked up. We have seen how it works here.  Once they get a whiff of an easy buck, they snap up anything they can get their hands on in the hope of selling soon as they get their keys.  Often the unit is on the market before they even seal the deal.  Down in Oz the commonwealth bank were talking about an imminent 0.5% rise.  And we all know that this is just the start, it will inch up every quarter.

A safe bet currency to hold these days is Euro.

[Lazas]

Concur with your view gram.

There still seems to be a danger that equity markets in general could have another 20-30% upside before coming to a pause, probably by the first or second quarter of 2010.
I'm looking for the Dow to be around 11500-12000 by that time.
Even if central banks put on the brakes, the correction would certainly be quite slow and nothing like what happened in 2008/09.
So, investing in the equity markets seems to me to be quite a safe thing to do for the next half-year at least. I would expect there to be plenty of time to get out if need be, whenever the pullback comes.

[Vulcanl]

Gram,

It doesn't sound like you are convinced yet that Asia has decoupled yet.  I agree with the spirit of your post re: global equities markets, but as the year winds down it is clear to me that the chaff is being separated from the wheat as we speak.

Central banks in the healthy (read: non-Western) economies of the World have already begun to raise interest rates.  This will result in ever more investment into EM Asia with continuing FX fluctuations that will enhance returns on these investments (in USD terms at least).

The USA/UK/Europe will not be raising interest rates any time soon.  Whilst the focus on non Western central banks will be inflation (including preventing asset bubbles), Western central banks' concerns will be altogether different.  They are pushing on a string at the moment, and there is no way out - all sorts of demand has collapsed and will stay muted until (if) the debt worked off.

There is more decoupling to come in 2010, with ever more dislocations and surprises. 

[SIBOR]

Most banks are still offering housing loans at 1.88% fix for 2 years. Suicide if SIBOR pass the 1.5% mark? Or are they convinced/know/pray SIBOR stays low?

[What next?]

Very predictable: more BS from local agents on this b.o.a.r.d. jerking off about the Sail and Singapore becoming the Moronaco of Asia.