Wednesday, October 17, 2012

Mechanics of US Federal Reserve Quantitative Easing as financial warfare

MAS to maintain monetary policy
Updated 08:45 AM Oct 12, 2012

SINGAPORE - The Monetary Authority of Singapore (MAS) unexpectedly kept monetary policy on hold this morning, saying it will continue letting the Singapore dollar appreciate at its current pace as inflation remained a worry.

Insights share by EDMW forum member, sleepyhealer how a strengthening SGD will dampened exports, leading to contraction in the economy

Singapore government not thinking.

By allowing the currency to continue to appreciate, it means that our export will be more expensive than before while our import will be cheaper. We are net exporter in nature not net importer. So when it means that it is more expensive, other people will source for cheaper alternatives. This drives down the demand for growth for the companies.

When the demand for the export drops, net profit after tax dropped and it means that in order to retain the same profit, the companies either have to bank on the fact that they will retain the same demand now as they raise price or cut cost. When they cut cost, labour cost will be one of those that they seek to be cutting as it should made up the main bulk of the flexible cost component. They could also be cutting their supply import as they foresee a slower demand on their goods.

When it happens, it will further drop in demand as the domestic will not likely to demand for more given that more consumers are jobless or had a reduced income or companies reduced their demand of raw materials.

Also that when no one want export, you will find your currency facing depreciation as you now have abundance supply of money. You will likely to reduce the money supply to keep up with the appreciation policies.

When money supply shrink, interest will go up when business borrow money. (Opportunity cost) which result in higher expenses due to higher finance interest.

Those that is on margin financing will find themselves having to top up additional assets to continue their funding limit. I think call pledged assets or something cannot remember.

Eventually some companies will go bust as a result and the whole thing will spiral out of control.

Sunday, October 7, 2012

Mindshare, a global media and marketing services company, conducted an anonymous survey involving over 2000 respondents early this year to find out about Singaporeans’ confidence in the future of Singapore.

The results have not been too optimistic:

In the survey:

• 65% said they don’t think they will be able to retire comfortably in Singapore
Most Singaporeans have less than minimum sum in CPF on retirement – HSBC survey

• 72% feel that the medical costs are getting too high
Singapore govt only pays US$825 out of the average US$2,273 (i.e, 36.3%) health spending per person, making it the most stingy govt among the first world economies. Hence, Singapore’s private spending on healthcare as a percentage of total health spending is the highest among the first world economies at 63.7% (‘PM: Raise individual’s Medisave contributions to cope with healthcare costs‘).

• 73% think that public housing prices are getting out of control
The HDB Resale Price Index (RPI) rose two percent to a new record high of 197.9, according to HDB’s flash estimates for the 3Q of 2012 (‘HDB resale prices hit all-time high‘).

• 75% said they should not be spending their entire working life paying off their housing loans
E.g. if a couple take a 35 year loan at 30 years old, they will only be able to pay off their mortgage right at retirement age of 65, thereby working their entire life to pay off their housing loan.

• 62% believe that Singapore leaders are paid too much these days
It’s not just our political leaders are the most highly paid in the world even after their so-called ‘pay cuts’ following GE 2011, our civil servants are also paid very highly. For example, the salary of the ex-permanent secretary in the French cooking saga is more than the U.S. President Obama’s (‘Perm Sec who went to France to learn cooking retires as millionaire‘).

• 69% think too many foreign workers are taking up job opportunities in Singapore today
To make things worse, some of the foreign managers are currently hiring their own kinds, directly discriminating Singaporeans.

• 73% said Singaporeans should be granted priority in employment
Singaporeans in Singapore today are not granted any priority in employment. It is very possible for a company in Singapore to employ 100% foreigners to work in the company since there is no quota limit for employment pass holders.
In other countries, they have labour laws to protect their citizens and put the interest of their citizens first. For example, in the U.S., employers must “attest” to protect U.S. workers [Link] so as to ensure that foreign workers do not displace or adversely affect wages or working conditions of U.S. workers. Failure to do so will render the employer liable

Published October 06, 2012
Singapore's emigration conundrum
Joyce Hooi

In Singapore's Consumer Price Index last year, the cost of housing rose 8.3 per cent year on year, a rate of increase bested only by that of the cost of transport - another national bugbear - at 11.9 per cent -PHOTO: FILE PHOTO

IN the anonymous freedom of surveys, away from the glare of the National Conversation, more than half of us apparently do not want to be here - "here" in the geographical sense of the word (Singapore) instead of the existential, even though the two concepts have lately coiled themselves around each other in this country.

A Mindshare survey carried out early this year found that 56 per cent of the 2,000-odd polled agreed or strongly agreed that, "given a choice, I would like to migrate".

It is tempting to dismiss an amorphous and ill-defined wish in the carnival land of surveys that allow for split-second whimsy, especially when it's not clear if people have in mind leaving for the short term or emigrating - a permanent kind of departure.

Brenda Yeoh, a migration specialist and dean of the National University of Singapore's (NUS) Faculty of Arts and Social Sciences (FASS), is not surprised by the figure but is hardly alarmed, especially if the direr of the two possibilities - emigration - is considered.

逾半数国人想移民 本地房贵是主因

《新报》报道,一项由媒体研究机构MindShare进行,访问2000多名本地人的调查显示,有56%的 人表示,如果有得选择,会想要移民。

调查显示,让最多本地人想离开的原因包括“不该耗尽一生付房贷”(75%)、“公共房屋的价格太离谱”(7 3%)、“新加坡人没有优先获得就业机会”(73%),及“医药费高涨”(72%)。

其他让本地人不满的原因包括“太多外国工人抢机会”(68%)、“不相信能在新加坡享有舒适的退休生活”( 65%)及“政治领袖的薪水太高”(62%)。



Saturday, October 6, 2012

Only 35.19% of Singaporeans supports the PAP/YPAP/PA/RC/NTUC consensus

From the Presidential election results
Tony Tan wins Singapore Presidential Election 2011 by narrow margin

Dr Tony Tan is the next president of Singapore.

After a tight race and a recount of votes, the Elections Department has confirmed him as the winner of the presidential election.

Announcing the results, the Returning Officer Yam Ah Mee said the local votes counted are conclusive and that the overseas votes will not affect the results of the election.

5,504 Singaporeans have registered as overseas voters and their votes will be counted on Tuesday, August 30.

Dr Tony Tan beat his closest rival, Dr Tan Cheng Bock by a margin of 7,269 votes
The winning margin was about 0.34 percent of the vote

Dr Tony Tan had 744,397 votes or 35.19% of the valid vote

The majority that do not support their views, do not hesitate to counter/challenge their minority views/ideas as they have no legitimacy what so ever

Friday, October 5, 2012

Why prices of new HDB flats shot up so much

In 1991-1995 98,994 flats were built
In 1995-2000 157,919 flats were built
In 2001-2005 55,135 flats were built
In 2006-2010 26, 319 flats were built

Is it a surprise that prices of new HDB flats shot up so much?,-citizens-young,-well-qualified
Many new PRs, citizens young, well-qualified

Experts note the rising number of Singaporeans marrying foreigners; say spouse, kids should get PR or citizenship
Updated 01:43 PM Jul 27, 2012
by Ng Jing Yng

SINGAPORE - Immigration statistics revealed by the Government for the first time showed that, between 2007 and last year, the majority of those granted citizenship and permanent residence were not economically active - with the number of dependents outstripping working individuals.

During this period, there were 259,040 new permanent residents (PRs) and 92,310 new citizens. Working individuals accounted for 48 per cent of the new PRs and 38 per cent of the new citizens.

Tuesday, October 2, 2012

Why Singaporeans can't set aside enough CPF for retirement

In 1992, CPF contribution was 40% capped at $6000.
HDB prices in 1992
4rm $70k
5rm $110k
EM $160k

2012 Now CPF contribution 36% capped at $5000
HDB prices in 2012
4rm $300k
5rm $380k
EC $ 800k

Price of housing increased by almost 4 times. Yet CPF contribution has been reduced.

Monday, October 1, 2012

This 2 tables almost vanished from internet. Decided to go back to back to the source and get a screen capture of it before it starts vanishing again

Breakdown of building cost of HDB flat in 1981

Sunday, September 30, 2012

Rebuttals to Lawrence Wong
Misjudging politics in a conversation
Published by The Online Citizen on September 27, 2012
By Howard Lee

Lawrence Wong rebutted
Posted on 25 September 2012

THE REAL SINGAPORE Thu, 09/27/2012 - 23:52–-listen-them-rather-vilify-them

Wednesday, September 26, 2012

When 5 PAP members attend the national conversation as members of the audience, it's non partisan. When netizens points out there are 5 PAP members in the audience, they are politicising the issue.

I’ve been watching incidents unfold on the internet over the past few weeks with some heaviness in my heart.

When the British royal couple came to visit, PA and HDB organised an event at Queenstown to give them a glimpse of the diverse activities in our heartlands. Singaporeans young and old volunteered readily to be part of this event. Yet, they were mocked online for taking part in a “wayang

” show.

When Mediacorp organized a TV forum with the PM, they invited a group of 50 people from all walks of life. Some had participated previously in Mediacorp’s TV programmes. Several were nominated by the unions and schools. Others came from a range of professional, voluntary and self-help groups.

No one was invited because of his or her political affiliation. But it so happens that among the group of 50, a handful were PAP members. They were a small minority. But on the internet, there was a campaign targeted against these PAP members, with their names being singled out and attacked, and their phone numbers publicised online.

The PAP has done a lot for Singaporeans over the past decades. But it is not perfect – no party is. We need to listen to criticisms and improve as a party, to serve our people even better.

This is why I and many others joined the PAP – because we appreciate what the party has done, we believe in the cause the party stands for, and we want to help the party do more to serve the interests of Singapore and our fellow Singaporeans.

I understand that not everyone will feel the same way about the PAP. Each of us is free to support any political party and choose the government we want. Indeed, the critics online clearly have their own political affiliations too, even though many have chosen to stay silent on this, or to hide their real identities behind anonymous online profiles.

Politics is important. But surely we do not want to end up in a situation where every activity or conversation in this country becomes politicised, where our people are polarized by political beliefs, where Singaporeans are set against Singaporeans based on creed or political affiliation.

More importantly, when decent people step forward to be part of a genuine national effort to welcome our overseas guests, or volunteer their time to be part of a national TV forum with the PM, and yet get vilified by their fellow citizens, then we really should pause and reflect, and ask ourselves whether this is the kind of society we want.

Politics can drive a wedge between us and divide our society. Or it can be a force for good, to bring our people together, and to build a stronger and better Singapore.

Look at what we have achieved together over the years. Our public housing, our schools and institutions of higher learning, our parks and museums, our container port and airport, and even the Pledge – these are national institutions that the PAP government has worked hard to put in place, with the support and contributions of all Singaporeans.

Let us continue to work together and keep our democracy healthy – by maintaining a basic level of civility in our public discourse, by treating all with dignity and respect, and by finding ways to bridge our differences and forge a common future together.

Monday, September 24, 2012

6 million in the future no problem

Now at 5 million

All else fails, can always say this again

Sunday, September 23, 2012

Tribute to the chaps in EDMW forum who identified the PAP member in the English National conversation forum broadcast on the 14 September 2012

14-09-2012, 08:31 PM
unicr0ne;hey is the ang moh fat fug part of the desmond choo fan club during the bi elections?

14-09-2012, 09:02 PM
Charlie Cho;That ang moh is a pap member wor

14-09-2012, 09:05 PM
orwell76;You talking about this ang moh right?

Rise in HDB prices disproportional to wage increase

Median Gross Monthly (from the above mentioned MOM report)
Income From Work of Full-Time Employed Residents ($)
Year 2001 $2387
Year 2004 $2326
Year 2011 $3249

HDB prices from the same time period

HDB prices in 2004
3rm $90k
4rm $120k
5rm $160k
EA $280k

HDB prices in 2012
2rm $100k
3rm $160k (1.7x)
4rm $300k (2.5x)
5rm $380k (2.4x)
EC $800k (2.9x)

median wages went up 1.4 x from 2004 to 2012
but new HDB flat prices went up more than 1.5x

HDB did not heed academic advice in 2009 to control HDB prices

Severe asset inflation a risk: Economist
Government must act now to control the prices of HDB flats. -ST

Fri, Aug 14, 2009
The Straits Times

By Melissa Tan

SINGAPORE risks 'severe asset inflation' during the economic recovery, a local economist has warned.

But this danger can be averted if the Government acts now to control the prices of HDB flats, said Mr Paul Yip, Nanyang Technological University (NTU) associate professor of economics.

Asset inflation - meaning a rise in price of assets such as stocks and property - is a possible consequence of the United States' current expansionary fiscal policy, Professor Yip said yesterday.

He was speaking at an NTU symposium - on exchange rate systems and Asian macroeconomic policies - which brought together 11 macroeconomists from institutions such as Stanford University and Delhi School of Economics.

'Many people say that the property market is rebounding, but I don't think so; we are still bottoming. Recovery will be slow ... and a few years later we might have severe asset inflation, much more than the rise today,' Prof Yip said.

'So if you are a stock investor or property investor, it's very easy. Just hold your stock and shares for another three or five years - the price will climb to be much higher. But if you lose money, don't blame me,' he quipped.

Prof Yip noted that the US government has lowered interest rates and expanded its money supply in a bid to avoid a repeat of the Great Depression.

But post-recession, the government may fail to shrink the money base back to pre-downturn levels, he said. In that case, excess US dollars would flood the market.

'For Singapore, there may be an inflow of money from the US, increasing the money base and therefore the money supply... When the recovery comes, there will be wage inflation and consumer price index inflation, and this will fuel asset inflation,' he told The Straits Times.

'Rents will rise and then people will be able to charge even higher rents, causing a vicious circle,' Prof Yip said.

'To curb asset inflation early, the Government can supply more HDB flats and prevent HDB prices from going up with private property prices - among other things. The price will become unaffordable because we have the wrong market structure; developers are trying to maximise profit by selling in batches and using price discrimination.'
Social instability/Xenophobia predicted in 2007

Middle class wage stagnation could lead to social instability
By Pearl Forss, Channel NewsAsia | Posted: 11 January 2007 1856 hrs

SINGAPORE: Middle class wages have been stagnant in the past 5 years, according to economists, and this could lead to social instability.

These concerns were shared by economists at the annual Institute of Policy Studies Singapore Perspectives conference, who also added that the government is taking steps to address the problem.

Economists believe a US economic slowdown in business and consumer spending may cause problems for Singapore, but as Singapore is tops in the ASEAN resilience index, it should be able to weather external shocks, thanks to a diversified economy and strong Asian demand.

They predict that growth going forward will be above 3 to 5 percent.

The long-term growth limits for a mature economy was previously in the 3 to 5 percent range.

However, economists are asking who this growth is for. The income of the bottom 30 percent of the population has fallen. What is more worrying is the fact that the majority of Singaporeans in the middle class has only seen about a one percent increase in their nominal income in the last 5 years.

This is not not just a Singapore problem say economists who point out that stagnant wages is a global problem.

The chief reason for this is globalisation, especially with India and China introducing a large pool of skilled and unskilled labour to compete with the labour forces of industrialised countries.

Singapore is susceptible to this because of its open economy.

Manpower Ministry data shows that 124,000 jobs were created last year and 45 percent of these jobs went to foreigners.

"With the rate of immigration, even among unskilled and semi skilled labour at a rate twice of what we experienced in the 90s, at a rate fastest in the developed world, the question is - does this dampen our real wages as we grow? Does the strategy itself dampen real wages and depress real wages at the low and middle end of the spectrums? They are sacred cows but we should step back and think about them," said Yeoh Lam Keong, Vice President, Economic Society of Singapore.

Another reason cited for middle class wage stagnation is the move by the government to cut CPF employer contribution rates for older workers by 4 percentage points over the last 2 years.

"So if you were a worker in the 50-55 age group, you could have seen your wages fall as much as 10 percent over the last 3 or 4 years. Now with the economy improving, the government could bring that back, the increase is 1 or 2 percent. I'm in support of CPF tinkering but probably it happens far too often, but I think there's probably some justification to look back and think that the restructuring was a bit too aggressive on the CPF side and it has contributed somewhat to a very sandwiched middle class," said Chua Hak Bin, Director, Asia Pacific Econ & Market Analysis, Citigroup Global Markets Singapore.

The government is looking at increasing CPF by 1 to 2 percentage points in 2007.

Economists say workfare should become a more permanent pillar of the economy so as to cushion growing inequality.

- CNA /dt
CPF Life payouts reduced barely 3 years into it's inception
CPF Life Payout from $948-$856 (in 2009) dropped to $844-768 (2012) for the same $117,000.

Tue, Sep 15, 2009
The Straits Times

With rising life expectancy, it is prudent to ensure that your retirement savings will last for all your days.

The opt-in system began on Sept 5 and is open to older CPF members who wish to join the annuity scheme ahead of 2013, when it will be implemented for those turning 55 then. For older CPF members, the monthly payouts will start as early as next January.

While many are still undecided, some, like Madam Wong Kwai Sim, 55, have taken the plunge. She has opted for the CPF Life Balanced Plan, which will give her an estimated monthly payout of $855 to $948 when she hits 65.

Madam Wong, who works part-time as a clerk, currently has $117,000 in her Retirement Account, which is also the prevailing MS.

Projected CPF Life payout in 2009

CPF Life scheme can do better ...
04:46 AM Mar 08, 2012
Letter from Tan Say Yin

THERE are two negatives in the Central Provident Fund Life scheme: Low payouts and, especially, the uncertainty of the monthly quantum, which could fluctuate yearly depending on interest rates.

And if the payout is at the lower end of the range, it could be further eroded by inflation in the future.

Private companies can structure their annuities with a locked-in monthly payout, with some even providing participating annuities whereby bonuses could be declared, which then raise the monthly payout.

The CPF Life scheme surely could do better, since it has a larger pool of members, as it is mandatory from next year for the majority of Singaporeans who turn 55.

I am in my late 50s and am looking at various options for my retirement. Using the CPF online calculator, I did some comparisons.

Assuming I have S$117,000 in my Retirement Account, the Minimum Sum monthly payout would be S$1,040 from the age of 65. The current CPF Life Balanced Plan, however, would provide a lower monthly payout ranging from S$768 to S$844.

I am aware that the monthly payouts last for as long as a member lives, But the Minimum Sum example I quoted could last for a good 20 years, likely to be sufficient for most Singaporeans.

Even if the difference in payouts between the two schemes was, say, only S$136, I would get S$32,640 more under the Minimum Sum scheme.

I could set aside this amount to possibly give me another three years of allowance, taking me to a ripe old age of 88 years. I am therefore not sold on CPF Life.

So far nobody reply his letter in Today's Voice forum.

Young S'poreans 'will have adequate CPF savings' Independent study, however, highlights need to keep an eye on the needs of older generation
04:45 AM Sep 20, 2012 SINGAPORE -

Compared to the previous generation, young Singaporeans today have to work longer as life expectancy increases. Coupled with the rising cost of living, there are concerns that "work till you drop" could become the motto for the working class here.

But the findings of an independent study commissioned by the Ministry of Manpower could go some way to allay those worries.

However, at the same time, the study highlighted the need for policymakers to "keep our eyes on" the needs of the older generation today - in the words of Deputy Prime Minister Tharman Shanmugaratnam - given that their wages were much lower in the past and they were required to set aside less money in their CPF Retirement Account.

The study, which was conducted by National University of Singapore economics professors Chia Ngee Choon and Albert Tsui, found that young Singaporeans in the workforce today will have adequate savings in their Central Provident Fund (CPF) accounts by the time they retire.

Mainstream media is spinning again.
2009 49% were able to meet minimum sum
2011 45% were able to meet minimum sum
The number of people who CANNOT meet minimum sum INCREASED.

Another issue for the government involves the CPF minimum sum requirement, where S$123,000 must be set aside for retirement.In 2009, only 49 per cent of workers were able to meet the requirement upon reaching 55 years old.

This raises concerns over the ability of the elderly to depend on themselves in retirement, and the potential need for more support from the government.

Prof Yeung said: "Older people rely a lot on their children to support them. And now a large proportion of people don't even get married or have children. So that means they are going to need to accumulate enough on their own, or the government will have to increase their support to the elderly population."

The report looked at six broad areas, including sustainable economic growth and building a cohesive society.

There are plans to publish the report every two years.

- CNA/al

Title : Percentage of CPF members meeting Minimum Sum on the rise: Tharman
Date : 05 March 2012 1703 hrs (SST)

SINGAPORE: The percentage of active CPF members who meet their Minimum Sum at age 55 has been improving over the years, from 36 per cent in 2007 to 45 per cent in 2011.

Speaking in Parliament, Deputy Prime Minister and Manpower Minister, Tharman Shanmugaratnam said this will improve with each successive cohort, as educational profiles improve and lifetime incomes rise.

In 1973,

a 4 room flat (92 sq m) is $15.5K
a plate of chicken rice is 70 cents.
a fresh poly grad pay is $400 pm
a fresh univeristy graduate pay $800 pm
a minister pay is 3-4k pm, about 40K per year.

In 2012

same flat is $300K. (19x)
chicken rice $3.00 (4x)
salary of fresh poly grad $1.4 to $1.8K pm (4.5x)
salary of fresh university graduate $2800-$3600 (4.5X)
minister pay say $1 m per year (25x)

Rightfully minister pay should be no more than $200,000 per year ($40,000 x 4.5)

adjusted for inflation... workers starting pay remain consistent after adjusted for inflation... so this 40 years only ministers' productivity went up?
Taken from the Factually website

Published Date: 28 August, 2012
Home Price-Income ratio (HPI) – a figure of four for example, would indicate that the property being purchased is priced at four times the buyer’s current income. However, this is not the best yardstick of affordability, and HDB uses other more comprehensive measures. But we will consider HPI here since it has been cited by many, with numbers higher than warranted by the facts.

There are a lot of factors that contribute to the price you pay for your BTO flat, from the location of your BTO flat, to the size of your desired unit and even where in the spectrum your annual household income falls. All of these contribute in some way, but it is important to remember that BTO flats are priced across a fairly broad range, making it possible for lower income earners to reasonably afford a BTO flat as well.

Let’s take a look at a possible scenario. A Singaporean couple are looking to apply for a BTO flat. They are both working and drawing an assumed constant combined monthly salary of S$7040, which was the median household income for 2011. Assuming that the couple gets a basic salary package (i.e. 12 months’ basic pay), that brings household income to $84,480 for this couple.

So depending on the location and the size of flat that the couple chooses, their chosen BTO flat would cost anywhere between two to five times their annual income (see the table below for some examples), which is a fairly reasonable price for a house that will serve them well for many years. 

(Prices of BTO flats were taken from July 2012’s figures.)

Buying a house together marks the beginning of a new life together with your loved ones.  It is also a long term commitment.  As other needs and commitments may come along later on, couples are always encouraged to be prudent and to buy a home that they is within their means and which they will feel most comfortable paying for. 

Seems like the Singaporean couple chosen for the example are both graduates. But not all Singaporean couples are graduates. Would the chart still hold true for non graduates couples?

New government website call Factually

By Rachel Chang

In a bid to cut through the swirl of rumour and distortion online, the Government has quietly launched a few "myth busting" initiatives. The first is a new section on its website called "Factually". Since May, it has collected a series of primers on hot topics like the national reserves, certificates of entitlement and procurement processes.

They aim to give bite-sized answers to questions that have arisen over controversial decisions, such as the one in March to give $1.1 billion to bus operators to ramp up services. Taking things one step further, the Housing Board (HDB) two weeks ago started a new website known as HDB Speaks.

A first for government agencies here, its sole purpose is to address topics of controversy, like the affordability of resale HDB flats. One was recently been sold for more than $1 million.

Replete with bright graphics and written in a conversational style, it is a far cry from HDB's more sober main website, and aims to be a place where people can "get the facts on the myths about HDB" - its tagline. Both initiatives are works-in- progress, said the agencies in charge.