Property prices not yet at 'meaningful correction': DPM Tharman

[reporter2]

http://www.businesstimes.com.sg/real-estate/property-prices-not-yet-at-meaningful-correction-dpm-tharman

Property prices not yet at 'meaningful correction': DPM Tharman

By Jamie Lee

[email protected]@JamieLeeBT

28 Oct


PROPERTY prices in Singapore have not seen a "meaningful correction" yet, said Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam on Tuesday.

"We've seen some correction in both private property prices and HDB resale prices over the last four to five quarters, but there is some distance to go in achieving a meaningful correction after the sharp run-up in prices in recent years," said the chairman of the Monetary Authority of Singapore at the Credit Counselling Singapore's 10th anniversary luncheon.

"If we do not get a meaningful reversal after each upswing, property prices will run ahead of the growth in household incomes in the long term. And that, we must avoid."


http://www.businesstimes.com.sg/real-estate/tharman-home-prices-correction-not-there-yet

Tharman: Home prices correction not there yet

By Jamie Lee lee

[email protected]@JamieLeeBT

29 Oct


PROPERTY prices in Singapore have not seen a "meaningful correction" yet, said Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam on Tuesday.

"We have seen some correction in both private property prices and HDB resale prices over the last 4-5 quarters, but there is some distance to go in achieving a meaningful correction after the sharp run-up in prices in recent years," said Mr Tharman, who is also chairman of the Monetary Authority of Singapore (MAS), at the Credit Counselling Singapore's 10th anniversary luncheon.

"If we do not get a meaningful reversal after each upswing, property prices will run ahead of the growth of household incomes over the long term, which we should avoid."

He noted how the risk profiles of borrowers have improved, with the share of borrowers taking up multiple housing loans declining to 13 per cent of new housing loans as at the second quarter of this year, from 30 per cent in 2011.

The average tenure of new private housing loans has also been trimmed to about 25 years, compared to a peak of 30 years in 2012.

Last Friday, figures from the Urban Redevelopment Authority (URA) showed prices of private property falling by 0.7 per cent in the third quarter of this year, compared to three months earlier. That marked the fourth consecutive quarterly drop, though it was also the most benign dip since prices chilled a year ago.

The HDB resale market was hit much harder in the latest quarter, with prices slipping 1.7 per cent from a quarter ago - the biggest decline since the Q3 2001.

Among the cooling measures undertaken by the government was the total debt servicing ratio (TDSR) framework put in place last year. Under TDSR, a borrower's monthly instalments for all debt servicing - including mortgage payments - must not cross 60 per cent of his gross monthly income.

[sunrise]

wah! those bought $1700psf at OCR sure chowlor.

[Rysk]

wah! those bought $1700psf at OCR sure chowlor.

Who bought hah??
I tot got one expert already repeated so many times.. "There is no OCR condo in Singapore that is selling at $1500 to $1700psf... YET..."

"BEWARE....Dont let the troll fool you with wrong information. There is no OCR condo in Singapore that is selling at $1500 to $1700psf...YET..."
9534

[teddybear]

What is new from that troll hah?

He said the air in the West region of Singapore, including Jurong, is the MOST CLEAN in Singapore according to NEA PSI !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Wow! HE has made all the petro-refineries, chemical manufacturing plants, power generation plants, and all other heavy industries ALL ONLY LOCATED in the West and Jurong disappeared like David Copperfield !!!! :monkey:



Who bought hah??
Ppl already repeated so many times.. "There is no OCR condo in Singapore that is selling at $1500 to $1700psf... YET..."

"BEWARE....Dont let the troll fool you with wrong information. There is no OCR condo in Singapore that is selling at $1500 to $1700psf...YET..."
9534


wah! those bought $1700psf at OCR sure chowlor.

[solsys]

wah! those bought $1700psf at OCR sure chowlor.

OCR needs to drop by another 65-100psf from today's prices.

RCR, CCR needs to drop by another 130-200psf from today's prices.

[smellyfish]

the way Tharman has been talking, he obviously have a price point in his shiny head that he feels is acceptable, so why not tell the people so no one need to second guess?

and it's a big policy failure to have let prices overshoot their price point by so much.

[sunrise]

Who bought hah??
I tot got one expert already repeated so many times.. "There is no OCR condo in Singapore that is selling at $1500 to $1700psf... YET..."

"BEWARE....Dont let the troll fool you with wrong information. There is no OCR condo in Singapore that is selling at $1500 to $1700psf...YET..."
9534

our fren read this news sure collapse. hopes all gone. looks like he has to get back to work to recover the loss.

[pmet]

:encouragement: Tharman is one of the rare good ministers. Respect!

[mosaic]

the way Tharman has been talking, he obviously have a price point in his shiny head that he feels is acceptable, so why not tell the people so no one need to second guess?

and it's a big policy failure to have let prices overshoot their price point by so much.

Lol would you reveal your price point if you were the minister? Are you prepared to face the people who bought above that price point?

[newbie11]

When it's such a controlled market, no one can tell future. Does mas know which measure to rollback when preferred price point is reached?

[Arcachon]

Don't think they looking at the preferred price point, they are looking at the price not going up.

The Control measure are all calculated move, they want the property to go up to the point the ROI for the infrastructure is met.

As to those who MTB, guess got to wait for the next downturn.

Looking at the experience they gain after the AFC in 1997 till 2003, guess they have lots of way to move the market.

[Ringo33]

Here is my 2 cents.

Tharman being the honcho of MOF, he knows very well that the AAA rating of banking system in Singapore is heavily expose to the property sector. And if Singapore property would to collapse, Singapore banks will be in trouble and this is going to bring the entire economy down.

As such, there is no reason why Tharman would want to force a major correction in the property market while they are dealing with a weak global economy. If you read what he said carefully


"We've seen some correction in both private property prices and HDB resale prices over the last four to five quarters, but there is some distance to go in achieving a meaningful correction after the sharp run-up in prices in recent years," said the chairman of the Monetary Authority of Singapore at the Credit Counselling Singapore's 10th anniversary luncheon.

"If we do not get a meaningful reversal after each upswing, property prices will run ahead of the growth in household incomes in the long term. And that, we must avoid."

He mention distant to go and he mention household income. What he is saying is that the property prices need to slow down to let household income to catch up. And that could mean that they want property prices to remain at this lever for X number of years to give time for household income to catch up. And if the government would want to engineer a drastic price correction, they would have introduce a surprise new cooling measure and then tell you why they need to do that.

Which mean, the name of the game for property right now is to invest in high yield asset rather than wasting time thinking about capital gain, at least for the next 5 years.

[wt_know]

what is meaningful level?
when property prices skyrocketed to insane level, why did he not mention not meaningful

[Kelonguni]

Where does that yield focus leave owners who are waiting for TOP in the next few years?


Here is my 2 cents.

Tharman being the honcho of MOF, he knows very well that the AAA rating of banking system in Singapore is heavily expose to the property sector. And if Singapore property would to collapse, Singapore banks will be in trouble and this is going to bring the entire economy down.

As such, there is no reason why Tharman would want to force a major correction in the property market while they are dealing with a weak global economy. If you read what he said carefully



He mention distant to go and he mention household income. What he is saying is that the property prices need to slow down to let household income to catch up. And that could mean that they want property prices to remain at this lever for X number of years to give time for household income to catch up. And if the government would want to engineer a drastic price correction, they would have introduce a surprise new cooling measure and then tell you why they need to do that.

Which mean, the name of the game for property right now is to invest in high yield asset rather than wasting time thinking about capital gain, at least for the next 5 years.

[Ringo33]

Where does that yield focus leave owners who are waiting for TOP in the next few years?

That is really a question about the pros and cons of buying new launch vs resale. I believe there are already several thread on this subject

[heehee]

What you said do not gel with what Tharman said.
Furthermore, Minister Khaw is MND & he said most explicitly & clearly that they consider price now with respect to 2009 low & income increase from then to determine over-priced or not.
As investor, then we look at respective districts price increases also, & income increase of potential buyers there to determine over valued.


Here is my 2 cents.

Tharman being the honcho of MOF, he knows very well that the AAA rating of banking system in Singapore is heavily expose to the property sector. And if Singapore property would to collapse, Singapore banks will be in trouble and this is going to bring the entire economy down.

As such, there is no reason why Tharman would want to force a major correction in the property market while they are dealing with a weak global economy. If you read what he said carefully



He mention distant to go and he mention household income. What he is saying is that the property prices need to slow down to let household income to catch up. And that could mean that they want property prices to remain at this lever for X number of years to give time for household income to catch up. And if the government would want to engineer a drastic price correction, they would have introduce a surprise new cooling measure and then tell you why they need to do that.

Which mean, the name of the game for property right now is to invest in high yield asset rather than wasting time thinking about capital gain, at least for the next 5 years.

[stl67]

This kind of repeated news + cooling measures surely are not favourable and fair to investors like myselfy who buy CDL, Capital land shares. More air/land storm coming. URA has reserved price for land bidding,
so imagine land price is expensive + labour cost, how can developers be dropping their price unless they are here to charity work.

Luckily my commercial property investment is still holding up.

[Ringo33]

URA has already cut down the supply of GLS and HDB has already cut down the supply of BTO. All these are signs that the government are trying not to crash the market. And if Tharman intention is see a more drastic price correction, he would have announce another round of cooling measures instead of just talk about what he feel.

To me this is more of a political move to claim some political points for the coming election.

[k00L]

The title already says it very clearly "Property prices not yet at 'meaningful correction': DPM Tharman"

The URA index only dropped 3-4% since it peaked in Jul last year.
For the drop to be "meaningful", expect another 10% drop from here in next few years

[DMCK]

He also talk about this..

http://www.channelnewsasia.com/news/singapore/borrowers-to-get-access/1439228.html

What do you think?

[Ringo33]

The title already says it very clearly "Property prices not yet at 'meaningful correction': DPM Tharman"

The URA index only dropped 3-4% since it peaked in Jul last year.
For the drop to be "meaningful", expect another 10% drop from here in next few years


This is no the title of Tharman speech, it just a quote that journalist use to sell news.

[smellyfish]

Lol would you reveal your price point if you were the minister? Are you prepared to face the people who bought above that price point?

if you dont reveal, then people continue to second guess with none knowing the better. already in this thread, some are saying 10% $65-$100, $135-$200 - all are none the wiser and wild guesses what is in that shiny head.

if they just reveal the number and say that they will bring it to around that number, then i would think the market will simply trend towards that number.

now its like talking to a woman: why are you unhappy? is it this? no, is it that? no, what is it then? i dont feel like saying...:banghead:

[k00L]

"If we do not get a meaningful reversal after each upswing, property prices will run ahead of the growth in household incomes in the long term. And that, we must avoid."

What is worrying is that household income growth of 4% in past few years is due to tightening of foreign labour, not due to improved productivity.
Clearly the wage inflation is not sustainable and will slow down .. which means property prices will fall more.

[stl67]

What you say is true. Do you think 6.9 mio will sustain the air storm?

[Ringo33]

"If we do not get a meaningful reversal after each upswing, property prices will run ahead of the growth in household incomes in the long term. And that, we must avoid."

What is worrying is that household income growth of 4% in past few years is due to tightening of foreign labour, not due to improved productivity.
Clearly the wage inflation is not sustainable and will slow down .. which means property prices will fall more.

Doesnt make sense here.

The tightening of foreign labour will contribute to inflation, not income growth.

E.g. how does the reduction of foreign labour in the construction industry contribute pay rise in white collar jobs?

Your inability to understand what you are saying is worrying.

[Arcachon]

The tightening of foreign labour will contribute to inflation, not income growth.

I got lot of Chinese and Indian and others willing to work with less pay, some even pay the employer, now I reduce them do I get income growth.

Inflation is when more people with spare cash is buying and the supply is the same.

[Warren49]

The tightening of foreign labour will contribute to inflation, not income growth.

I got lot of Chinese and Indian and others willing to work with less pay, some even pay the employer, now I reduce them do I get income growth.

Inflation is when more people with spare cash is buying and the supply is the same.

Well, the tightening of foreign labour contributes to income growth among low-wage, and potentially income reduction for elites, in the short term..... In the LT, unproductive companies depending on cheap labor are supposed to relocate overseas or close down. The trick is not to over-tighten the screws on the SMEs such that too many close down in the short term.

[walkthetiger]

Well, the tightening of foreign labour contributes to income growth among low-wage, and potentially income reduction for elites, in the short term..... In the LT, unproductive companies depending on cheap labor are supposed to relocate overseas or close down. The trick is not to over-tighten the screws on the SMEs such that too many close down in the short term.

Inevitable...when the demand decline...struggling SMEs should be down sizing or close down...we can't rely on cheap foreign labours all the time...

[Yuki]

the way Tharman has been talking, he obviously have a price point in his shiny head that he feels is acceptable, so why not tell the people so no one need to second guess?

and it's a big policy failure to have let prices overshoot their price point by so much.

Humm..politicians playing politics.

I never trust their words 100%. It's not being a price point or not. It's giving vague answers so that either ways their words seem right.

[mosaic]

Humm..politicians playing politics.

I never trust their words 100%. It's not being a price point or not. It's giving vague answers so that either ways their words seem right.

yes but most importantly property prices are falling? isn t that what many singaporeans want? In any case the continual price increase was never sustainable. At least policies here actually work.

[Yuki]

yes but most importantly property prices are falling? isn t that what many singaporeans want? In any case the continual price increase was never sustainable. At least policies here actually work.

Actually.. How would you consider price to be falling? By psf? By quantum?

If larger 3 bedder was retailing at a higher quantum.... Does it mean price is falling if a much smaller 3 bedder is retailing at a smaller quantum?

The ura property indices measures exactly what?

[Arcachon]

Fed Decision Day Guide: FOMC Seen Focusing on Dangers of Low Inflation
By Christopher Condon and Steve Matthews - Oct 29, 2014

Here’s what to look for when the Federal Open Market Committee releases its policy statement at 2 p.m. today in Washington.

Federal Reserve officials won’t provide new economic projections, and Chair Janet Yellen isn’t scheduled to give a post-meeting press conference.

-- With the FOMC poised to halt bond purchases, ending its third round of so-called quantitative easing, policy makers may want to underscore they are troubled by falling inflation and price expectations.

The Fed will “express concern about consistent undershooting of inflation,” said Jonathan Wright, who worked at the Fed’s division of monetary affairs from 2004 until 2008 and now teaches economics at Johns Hopkins University in Baltimore. The committee will “go into reverse to some extent,” restoring language it dropped in July expressing a warning that low inflation poses a risk to economic performance.

Related: The Great Recession Put Us in a Hole. Are We Out Yet?

The committee in September said it “judges that the likelihood of inflation running persistently below 2 percent has diminished somewhat since early this year.” Thirty-three of 62 economists in a Bloomberg survey said they expect the FOMC to retain that language at this week’s meeting.

Decelerating Inflation

Still, reports since September have shown inflation has decelerated. Prices as measured by the personal consumption expenditures index rose 1.5 percent from a year earlier in August, down from a 1.7 percent gain in May. The inflation gauge has fallen short of the Fed’s 2 percent target for 28 consecutive months.

The Fed Eases Off

Policy makers, including regional Fed Presidents William C. Dudley of New York, Charles Evans of Chicago and Narayana Kocherlakota of Minneapolis, have in recent days mentioned below-target inflation as a risk that weighs against raising interest rates too soon.

Roberto Perli, a partner at Cornerstone Macro LP in Washington, said that while the committee would likely acknowledge some threat, its worry may be diminished because energy has been the biggest factor holding down inflation.

“Oil is something the Fed has no control over,” Perli, a former Fed economist, said in a video commentary for clients.

The Brent Crude Oil Index has declined 23 percent this year.

Almost Over

-- The end of QE: Economists in the Bloomberg survey were almost unanimous, with 62 of 64 saying the FOMC will end its third round of asset purchases at this week’s meeting. Yellen pledged to do just that following the committee’s Sept. 17 session if progress continued toward the Fed’s goals on unemployment and inflation.

Fed St. Louis President James Bullard, who doesn’t vote on policy this year, said Oct. 16 the central bank should consider a delay in ending the program in light of falling inflation expectations. “That option will be on the table” and “there is a possibility” the group could reduce monthly purchases by $10 billion at the meeting and leave the final $5 billion reduction for December, according to Perli.

Still, ending QE “is a nearly universal expectation,” said Dana Saporta, an economist at Credit Suisse Securities USA in New York. “It would be quite a statement by the FOMC if they don’t.”

Even with the end of QE, the Fed will still hold a record $4.48 trillion balance sheet accumulated during the three rounds of asset purchases. That will continue to keep a lid on borrowing costs by limiting the supply of securities trading on public markets and keeping yields lower than they otherwise would be.

Considerable Time

-- Still “considerable”: Eighty percent of economists in the Bloomberg survey predicted the Fed will continue to say it will be appropriate to hold the target interest rate near zero for a “considerable time” after bond buying ends. Thomas Costerg, an economist at Standard Chartered Bank in New York, said recent market volatility and signs of slowing global growth will cause the Fed to act with caution.

The Fed’s benchmark rate has remained at zero to 0.25 percent since December 2008. The median forecast from committee members last month called for the rate to hit 1.375 percent at the end of next year, implying a mid-2015 start to increases.

“The strategy going into this meeting is really ’do no harm’,” Costerg said. “Given the recent market volatility, it doesn’t do any harm to keep it for now.”

Yellen is scheduled to hold a press conference after the FOMC’s next meeting in December. That would give her a better opportunity to mute the market’s reaction to changes in the committee’s forward guidance, Costerg said.

Still Significant

-- And “significant”: Sixty-four percent of economists in the Bloomberg survey expect the committee also to hang on to its language describing “significant underutilization of labor resources” despite U.S. unemployment falling in September to 5.9 percent, its lowest level since 2008.

“With U-6 currently at 11.8 percent, there is still a long way to go,” Philip Marey, senior U.S. strategist at Rabobank Groep in Utrecht, the Netherlands, wrote in an Oct. 27 note to clients, referring to a measure of unemployment that includes not only the jobless, but also workers who can only get part-time employment and people who have given up their search for work.

Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York, said there was “some chance” -- though less than 50 percent -- that the committee would alter the language on labor markets. One possible change, according to Saporta: The committee could simply drop the word “significant” when referring to underutilization of labor resources.

Global Demand

-- Global growth: The committee is sure to discuss whether weak global demand, from Europe to China, is a threat to U.S. growth. Minutes of the Sept. 16-17 FOMC meeting published Oct. 8 revealed that worry and helped trigger the most volatile week for U.S. stocks since the financial crisis. Still, the group could opt not to highlight the issue in its statement.

“The Fed will be walking on eggs” in addressing global growth, Standard Chartered’s Costerg said. “I’m not sure they will want to bring that up in the statement. It will show up in the minutes” due out Nov. 19.

-- Dissenters: Dallas Fed President Richard Fisher and Philadelphia’s Charles Plosser dissented in September when the FOMC stuck with the “considerable time” phrase. Each has warned that keeping rates too low for too long could trigger higher inflation or lead to instability in financial markets. If the committee’s forward guidance remains unchanged, expect the same dissents, Neil Dutta, head of U.S. economics at Renaissance Macro Research LLC in New York, wrote to clients.

The Minneapolis Fed’s Kocherlakota may dissent because he wants the FOMC to express greater urgency about raising inflation to its 2 percent target, said Ward McCarthy, chief financial economist at Jefferies LLC in New York and a former Richmond Fed economist.

“There is a reasonable chance Kocherlakota dissents because he feels there is not enough of a defense of the inflation target and not enough emphasis on the inflation objective in the dual mandate,” McCarthy said.

To contact the reporters on this story: Christopher Condon in Washington at [email protected]; Steve Matthews in Atlanta at [email protected]

To contact the editors responsible for this story: Chris Wellisz at [email protected] Mark Rohner, Gail DeGeorge

http://www.bloomberg.com/news/print/2014-10-28/fed-decision-day-guide-fomc-seen-focusing-on-too-low-inflation.html

[VS]

:encouragement: Tharman is one of the rare good ministers. Respect!

Maybe he should look into the COE too, to bring down the current COE prices to "acceptable levels".

[Kelonguni]

Maybe he should look into the COE too, to bring down the current COE prices to "acceptable levels".

COE will auto fall in the next year. But whether it will fall to acceptable levels is very hard to say.

[teddybear]

May be he should look at living cost inflation too, it is going up too much and too fast over the past 10+ years vs income increase......... They should take action immediately to reduce living costs inflation to be inline with income increase............................................


Maybe he should look into the COE too, to bring down the current COE prices to "acceptable levels".

[Kelonguni]

May be he should look at living cost inflation too, it is going up too much and too fast over the past 10+ years vs income increase......... They should take action immediately to reduce living costs inflation to be inline with income increase............................................

Don't worry. QE has ended. Things will get better going forward.

[k00L]

Read the MAS in its latest macroeconomic review

http://business.asiaone.com/news/wages-rise-growth-productivity-stalls

"It also said the tight labour market will continue to drive up wages and employment for Singaporeans, although it also means that firms are increasingly passing on higher costs to consumers.

The share of new jobs filled by locals shot up to 73 per cent in the first six months of the year - far higher than the 31 per cent in the same period in 2011.

This follows multiple rounds of foreign labour tightening measures implemented as part of ongoing restructuring efforts, which aim to raise labour productivity.

But four years into economic restructuring, progress remains slow.

- See more at: http://business.asiaone.com/news/wages-rise-growth-productivity-stalls#sthash.rX1WqKkn.dpuf"


Doesnt make sense here.

The tightening of foreign labour will contribute to inflation, not income growth.

E.g. how does the reduction of foreign labour in the construction industry contribute pay rise in white collar jobs?

Your inability to understand what you are saying is worrying.

[Ringo33]

I can't recall a time when singapore property market crash with no external factors.
Is one coming?

[teddybear]

QE ended will only make living cost inflation in Singapore WORST!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Singapore HIGH living costs inflation despite super strong S$ are because of a mixture of govt policies:
1) GST
2) tightening of foreigners into Singapore to work
3) jacking up of rentals of commercial properties like those owned by REITs, office spaces, retail spaces, industrial etc!
4) Jacking up of workers' salaries via minimum wage or progressive wage - first target cleaners, now target security sector workers, who's next? Retail Service workers? Next Bus drivers?
5) With QE ending and US$ strengthening, S$ will weaken, further causing costs of imported products especially basic necessities like food, medicine, clothing, and almost everything to rise!

Why Singapore's living cost inflation is MUCH lower than it actually is? Because they include all the subsidies given the people! All these subsidies distort the truth inflation figures, though we don't know how they count them, so you know, "statistics" are just that, "statistics" - give you what you want to see (as much as possible)..........................


Don't worry. QE has ended. Things will get better going forward.



May be he should look at living cost inflation too, it is going up too much and too fast over the past 10+ years vs income increase......... They should take action immediately to reduce living costs inflation to be inline with income increase............................................

[iawgnix]

US$ strengthening is across the board. Most EM currencies are also depreciating. Imported basic necessities are mostly from EM countries so forex risk shouldnt be the biggest concern.

[Arcachon]

Do you believe US is able to print itself out of the mess.

[teddybear]

They had done it, and have been quite successful..........
The same cannot said for others............
Japan is trying to copy US, but I feared they may fall flat and failed!!!!!!!!!!!!!!!!!


Do you believe US is able to print itself out of the mess.

[pmet]

Actually US copied Japan in printing money... In Japan, printing money is nothing new. Japan has been printing money for decades and the local know it and has gotten numb to it. Not working anymore... just keep printing in larger volume in the meanwhile!

However, this has little effect on SG. Unlike the US, we're not pegged to Japan's whatever so not much boost for SG. Today's rally could be the last felt.

[teddybear]

The end of US QE marks the start of next US stock market and US$ bull-run, should last for another few years, and it will last longer than QE period!
I guess many people will miss the boat again................... :upset:



Actually US copied Japan in printing money... In Japan, printing money is nothing new. Japan has been printing money for decades and the local know it and has gotten numb to it. Not working anymore... just keep printing in larger volume in the meanwhile!

However, this has little effect on SG. Unlike the US, we're not pegged to Japan's whatever so not much boost for SG. Today's rally could be the last felt.

[pmet]

The end of US QE marks the start of next US stock market and US$ bull-run, should last for another few years, and it will last longer than QE period!
I guess many people will miss the boat again................... :upset:

Yes, agreed. The US bull run is due to the long awaited recovery of the US economy, with China, Asia and EU slagging. Fortunately I'm vested in USD and US assets. This bull run will press the FED to lift interest rates in the mid-term.

[teddybear]

While the Fed will lift interest rates in future, that is provided US economy is on a solid path, so initial raising of Fed rate should be viewed as good news. Only when they raise to too high rate when we should worry. However, we can worry about that may be 5 years later because the Fed has learnt their lesson, so they are not going to raise Fed rate too high too fast to trigger the next recession or even depression!

US is in best shape now, compared to other countries and region like Japan, EU, etc. That will help US to absorb funds flow into US, further fuelling rise of US stock market and US$. :D



Yes, agreed. The US bull run is due to the long awaited recovery of the US economy, with China, Asia and EU slagging. Fortunately I'm vested in USD and US assets. This bull run will press the FED to lift interest rates in the mid-term.

[pmet]

While the Fed will lift interest rates in future, that is provided US economy is on a solid path, so initial raising of Fed rate should be viewed as good news. Only when they raise to too high rate when we should worry. However, we can worry about that may be 5 years later because the Fed has learnt their lesson, so they are not going to raise Fed rate too high too fast to trigger the next recession or even depression!

US is in best shape now, compared to other countries and region like Japan, EU, etc. That will help US to absorb funds flow into US, further fuelling rise of US stock market and US$. :D

Correct, the rise in interest rates should be deemed as good news for USD and stock market, an indication that the great depression is over. Huat ah!

However, whether SG can match up is another matter. Since we don't set our own interest rates, we're at the mercy of the market.

[k00L]

Correct, the rise in interest rates should be deemed as good news for USD and stock market, an indication that the great depression is over. Huat ah!

However, whether SG can match up is another matter. Since we don't set our own interest rates, we're at the mercy of the market.

If US S&P index and SG STI index are leading indicators, US GDP growth will be higher than SG GDP growth in next year....
SG economy restructuring is not bearing fruit, as SG gov is driving up manpower cost to induce business to improve productivity, but the SME towkays just pass it to consumers rather invest in the high tech process loh...