2010: What next?

[Nope]

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

While inflation can/will/preferably equal higher interest rates it does not equal stronger currencies.

[gram]

Vulcan,

You could well be right in the longer term but near-term, I would expect the action in global equities markets to be as stated in my post. I agree that next year could well be the beginning of greater divergence in the performance of emerging markets compared to those of the West.

I was hopeful that the recent correction in equities might have been a little deeper and long-lasting but whatever happens towards the end of the year, markets around the world should be heading higher from current levels next year. However, they won't reach the old highs next year and in the case of the Western markets, they won't do so for quite some time.

[Ahyah]

Respectfully,
why euro? They are the next USD. They're borrowing money by the truck load.

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.

[flea]

While inflation can/will/preferably equal higher interest rates it does not equal stronger currencies.

Really? Can you tell me which bank you work for so we can bet against you?

http://en.wikipedia.org/wiki/Interest_rate_parity

[flea]

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?

Are you saying that SG banks are unprofitable on less than 38bp spread? Interesting.

On that note, can anyone recommend good online sources for:
Mortgage Delinquency Rates
Total Mortgage Debt (nationwide)

for Singapore?

Thanks.

[Vulcanl]

These are some of my ideas for what is coming next year....provided here for an honest (insult-free) give and take so that we may arrive at decisions that are best for us individually, given our unique situations:

*Gold and EM Asian equities continue their bull runs and end the year at least 20% higher than where they are now
*USD-SGD will end the year at parity (or better) to the USD (Inflation will become a very real problem in Asia and the MAS will handle this by re-valuing the SGD upwards)
*More trouble with US banks – This time one or two will be allowed to go under.   Citigroup and BoA are good candidates
*Singapore private residential property market will soar.  We will see increases of at least 20%  from 2009 year-end levels
*HDB will plod along and end 2010 with increased valuations between 4% and 6% from year end 2009 levels
*In the USA , unemployment will continue to be a problem, and closer to year end the mainstream media will finally acknowledge that America is in an economic depression.  Barack Obama and the Democratic party will not be blamed for this, however.  The 2010 midterm elections will NOT result in large Republican gains

[What?]

on what basis? interest rate was >4% during the boom years and bankruptcy is minimal. Even during the crisis, many sideliners were waiting for firesales, but that did not pan out. Many property owners and investors have the ability to hold and tide over increase in interest rates. 3.5% is unlikely to bankrupt half the nation. Individual balance sheets are still extremely healthy with debt/equity of only 15%. It will take a lot to bankrupt the nation.

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

[What?]

Even though I own some properties here, I'm hoping prices will not soar 20% because govt may step in if the price go up too much. 10% or so of appreciation will be good enough for me. Interest rate is only 1.8%, 5%-10% of appreciation + rental yield of 3% will be a good enough return for me. Don't be too greedy.

These are some of my ideas for what is coming next year....provided here for an honest (insult-free) give and take so that we may arrive at decisions that are best for us individually, given our unique situations:

*Gold and EM Asian equities continue their bull runs and end the year at least 20% higher than where they are now
*USD-SGD will end the year at parity (or better) to the USD (Inflation will become a very real problem in Asia and the MAS will handle this by re-valuing the SGD upwards)
*More trouble with US banks – This time one or two will be allowed to go under.   Citigroup and BoA are good candidates
*Singapore private residential property market will soar.  We will see increases of at least 20%  from 2009 year-end levels
*HDB will plod along and end 2010 with increased valuations between 4% and 6% from year end 2009 levels
*In the USA , unemployment will continue to be a problem, and closer to year end the mainstream media will finally acknowledge that America is in an economic depression.  Barack Obama and the Democratic party will not be blamed for this, however.  The 2010 midterm elections will NOT result in large Republican gains

[Spectulate]

The gov has a history of pricking asset bubbles and lax bank Lending to foreign buyers is one of them.

[Vulcanl]

If there were asset bubbles forming in Asia, it now looks like governments have done a good job of pricking them.  I see nothing but buying opportunities across the board (EM Asian equitites, Gold, commodities, currencies) at this time. 

Wall Street is going around telling everyone that USD/USTs are still considered 'safe' assets (as in "the dollar and treasuries have strengthened as a result of flight to safety").  I still get a chuckle out of this. 

Keep your eye on the ball....US equities will not recover as well from this latest correction  as will Asian EM equities.  China/India/who knows how many other central banks are stil buying Gold, setting a floor on its price. 

Darn this is fun!!!

[slipperyhandshakes]

aaah this view so nice one ah get good price for you - already had offer shhh i get price for you talk to owner aaah

[Vulcanl]

Contrary to what all of the 'experts' in the mainstream financial media have been babbling on about, the price of Gold has remained very stable, trading in the USD 1050-1150 range.  This has been going on since its high from December.

Central Banks (run by the scum of the Earth - BANKERS  ) show no inclination whatsoever to curtail their money-printing ways. 

This means that METALS are a sure bet for the remainder of the year. 

In addition to my Gold holdings I will begin accumulating Silver, Palladium, industrial metals, etc. 

We don't want to miss THIS boat, folks!!

[$Pripps]

contrary to all beliefs I think the SG is not composed of only muppets, therefore I think that in the later part of this year property prices will plummet. The reason for this is that SG gov wants Singapore to look attractive for MNCs and the only way to be that is to give more value for money. If they allow property prices to go up too much MNCs will find some other place.

well this is just my 2c being not even in finance :-)

[Kubes.SG]

contrary to all beliefs I think the SG is not composed of only muppets, therefore I think that in the later part of this year property prices will plummet. The reason for this is that SG gov wants Singapore to look attractive for MNCs and the only way to be that is to give more value for money. If they allow property prices to go up too much MNCs will find some other place.

well this is just my 2c being not even in finance :-)

I agree that the SG Govt is smart but I really question whether the have balls to fix this property bubble issue, certainly this year before the next election.  Even though this is a one-party state, some how fewer and fewer people vote for PAP each election.  That is their #1 concern.

[Agent007]

Er, bubble, what bubble? I don't see any bubble. Am I missing something?