View Full Version : Loan's interest rate going up!
Received letter from bank stating interest rate on my house loan will go up :mad: Translated to few hundred dollars increase monthly! Sh*t.
If you haven't received news from your bank, maybe want to consider locking in rate. I'm considering re-financing or locking rate after CNY.
how much % increase?:eek::scared-1:
Received letter from bank stating interest rate on my house loan will go up :mad: Translated to few hundred dollars increase monthly! Sh*t.
If you haven't received news from your bank, maybe want to consider locking in rate. I'm considering re-financing or locking rate after CNY.
my guess is SOR rather than SIBOR linked loan?
Received letter from bank stating interest rate on my house loan will go up :mad: Translated to few hundred dollars increase monthly! Sh*t.
If you haven't received news from your bank, maybe want to consider locking in rate. I'm considering re-financing or locking rate after CNY.
yup refinance if you can. and if you are on SOR, switch to SIBOR or take up any of the more competitive board rates.
Almost sign the SOR package, lucky did not believe agents or bankers. They are bunch of liars liars pants on fire.
Take up a 2 yr SIBOR to cushion against further increase in next 2 years, which is highly likely... :scared-5:
I'm on 1 month sibor, last 3 months rates has been going up, at about 0.01% though each time. My guess is rates will start the quick ascend end of this year when the euro and us situation becomes clearer.
flagship74
22-01-12, 18:50
SORF3M:IND 0.44245 0.00516 1.15%
seems ok leh
SORF3M:IND 0.44245 0.00516 1.15%
seems ok leh
sor 0.44 is low liao..
feb 07 was sor 3.5..
sor 0.44 is low liao..
feb 07 was sor 3.5..
ya lor...
I can't imaging what will happen to those people who have heavy loans. People is taking these super low interest rate for granted.
When the interest rates goes back to "normal" range, I wonder if the rental yield can even cover the interests.
I am just hoping that these interest rates can stay as long as possible while I clear off my housing loan.
ya lor...
I can't imaging what will happen to those people who have heavy loans. People is taking these super low interest rate for granted.
When the interest rates goes back to "normal" range, I wonder if the rental yield can even cover the interests.
I am just hoping that these interest rates can stay as long as possible while I clear off my housing loan.
ya lor.. up abit nia cannot tong.. if back to normal plus alot of margin calls outside.. need 200k hard cash to pay lor.. even more jia lak.. :doh:
flagship74
22-01-12, 20:08
jiak lat leh..interest up a bit pple start to KPKB..:tsk-tsk:
jiak lat leh..interest up a bit pple start to KPKB..:tsk-tsk:
I clearly remember in channel 8 news few days ago on watertown shui zi du interview with buyers. Got people praise the potential of the development. Got one even shout cheap. Where got kpkb.
flagship74
22-01-12, 20:20
I clearly remember in channel 8 news few days ago on watertown shui zi du interview with buyers. Got people praise the potential of the development. Got one even shout cheap. Where got kpkb.
pple kpkb abt interest rate and not px of the property lah..:D
jiak lat leh..interest up a bit pple start to KPKB..:tsk-tsk:
if goes back to 5% how ah? :beats-me-man:
What is the interest rate if one down 20%,
And what is the rate if one down 10%?
Under the earlier 90% loan, few of colleagues down 10% and loan 90%
if goes back to 5% how ah? :beats-me-man:
Fire sales.
http://1.bp.blogspot.com/-wOfk_9WUyJ0/TZaZW3F-A9I/AAAAAAAAABY/flBQcXru9aw/s400/huat+ah.jpg
Bernanke giving Ang Pow again, this coming Wed 25/01/2012, Huat Ah.
http://globalresearch.ca/coverStoryPictures/17346.jpg
Fed Begins an Effort to Remove All Doubt on What It’s Doing
http://www.nytimes.com/2012/01/23/business/fed-set-to-introduce-communications-policies-this-week.html?ref=business
WASHINGTON — The Federal Reserve, which does not like to surprise financial markets, has worked unusually hard to prepare the public for the changes to its communications policies that it plans to introduce on Wednesday.
Ben Bernanke, the Federal Reserve chairman, is focusing on improving Fed communications with the economy out of crisis mode.
While the changes could make it easier for the Fed to move ahead with another round of asset purchases later this year, by helping to explain why the economy needs additional stimulus, officials have indicated that any such plans remain on the back burner, and may stay there so long as the economy continues to recover.
Indeed, the Fed is able to focus on communication in part because it is no longer devoting all of its energies to crisis management. These are improvements that the Fed’s chairman, Ben S. Bernanke, has waited five years to make, reflecting his vision for how the Fed should operate in periods of calm, too.
The centerpiece of the new policies is a plan to publish the predictions of senior Fed officials about the level at which they intend to set short-term interest rates over the next three years — including when they expect to end their three-year-old commitment to keep rates near zero. The Fed also will describe the expectations of those officials for the management of the central bank’s vast investment portfolio.
The first forecast will be published after a two-day meeting, starting on Tuesday, of the Federal Open Market Committee, which sets policy for the central bank. The committee also is considering the publication of a statement describing the Fed’s goals for the pace of inflation and level of unemployment, which it has never formalized.
“Our moves toward greater openness in recent years have made our policies more effective and helped the public understand the Fed’s actions better,” John C. Williams, president of the Federal Reserve Bank of San Francisco, said in a recent speech.
Any bolder steps, he said, “will depend on how economic conditions develop.”
This is not the first time the Fed has tried to get past crisis management. And after several false starts in which it overestimated the strength of the recovery, officials have been careful to insist that they still stand ready to do more if necessary.
The economy, after all, is merely muddling along. While economists calculate that fourth-quarter growth was relatively strong, most forecasters expect a much slower pace of growth in the new year. The Fed’s own forecast, which will be updated Wednesday, anticipates growth of up to 2.9 percent. Most other guesses are lower.
Unemployment also remains a deep and prevalent affliction. Almost 24 million Americans could not find full-time work in December; the unemployment rate has ticked downward in part because many people have stopped looking for work.
Senior Fed officials have also sought to focus attention in recent months on the depressed condition of the housing market, arguing that other parts of the government can and should do more to help homeowners and revive sales. Some Fed officials have advocated that the Fed buy large quantities of mortgage-backed securities, which could further reduce interest rates on mortgage loans.
But several Fed officials have said in recent speeches that they are hesitant to support new efforts to improve growth, because they think monetary policy has exhausted most of its power, and because they are worried about inflation.
“Steady even if unspectacular growth accompanied by inflation in the neighborhood of 2 percent justifies some reluctance to change, in either direction, the F.O.M.C.’s accommodative policy,” Dennis P. Lockhart, president of the Federal Reserve Bank of Atlanta, said in a speech this month.
Mr. Lockhart added a standard caveat for Fed officials, that the persistence of high unemployment required the Fed to keep thinking about doing more.
“Now is not a time to lock into a rigid position,” he said.
But Fed officials have made clear that high unemployment is an insufficient cause for additional action, at least as long as inflation remains near 2 percent.
Sandra Pianalto, president of the Federal Reserve Bank of Cleveland, said in a recent speech that the economy would not create enough jobs to return unemployment to normal levels for “perhaps even four or five years.”
“Sooner, of course, would be better for everyone,” she said. “But I want to be on a path toward full employment that
doesn’t create an inflation problem down the road.”
The communications changes that the Fed plans to announce Wednesday mark the furthest advance in a 20-year-old campaign to increase the transparency of its decision-making as a means to increase the impact of its policies. As recently as the early 1990s, the Fed still did not regularly announce the decisions reached at its policy meetings. Now it plans to start publishing predictions about the outcomes of future meetings to guide investor expectations.
The Fed disclosed its plans this month when it released a description of the committee’s most recent meeting, in December. On Friday it followed up by releasing the templates that will be used to publish the predictions.
The predictions themselves could have a mild effect on markets. The Fed said this summer that it would maintain short-term rates near zero through middle of 2013, at least. Mr. Bernanke has since underscored the words “at least,” and analysts expect the forecast will show that most members of the committee intend to hold rates near zero into 2014.
Pushing back that timetable will tend to reduce interest rates, but the impact is likely to be minor, as asset prices already reflect an expectation that rates will not rise before 2014.
“In policy terms, this is a historic change,” Paul Ashworth, chief North American economist at Capital Economics, wrote in a note to clients. “In practical terms, however, the change isn’t going to have any major impact.”
A version of this article appeared in print on January 23, 2012, on page B3 of the New York edition with the headline: Fed Begins an Effort to Remove All Doubt on What It’s Doing.
How to stem inflation like this. High land price, high building costs and price to sell to continue.
How to stem inflation like this. High land price, high building costs and price to sell to continue.
High land price, high building costs is due to money printing in the US and Europe, MAS need to print in order for the SGD not to be overvalue.
It is not the land price and building cost increase, it the money depreciate due to excess printing. Those who keep their money in the bank Haut Ah.
There is no bubble yet in the Singapore property market, said Minister Mentor Lee Kuan Yew.
http://www.propertyguru.com.sg/property-management-news/2010/6/27950/no-property-bubble-yet-says-mm
The sharp price increases that have been experienced were "part of the total liquidity in the whole world system", said Mr. Lee, adding that foreigners still see properties as affordable and interest rates are still low.
"Even if we cap our excess, people in Hong Kong, Indonesia, will say, compared to what I have to pay, Singapore is cheap, let’s buy it," he said. "And apart from landed properties, they can buy into any condos."
Mr. Lee said the Singapore government is convinced that there is an underlying demand for residential property. "So it’s probably not a bubble yet."
He stressed that the Singapore government has taken measures to address concerns regarding the market overheating such as releasing more land to property developers and putting in place more stringent policies for homebuyers when borrowing from banks to acquire a property.
"More land is being released, to dampen the enthusiasm of everybody rushing for the latest release, and we’ve told the banks to be more prudent and have a higher downpayment," said Mr. Lee.
"These are the precautions we can take, but it does not stop the Indonesians or the Thais or the Malaysian Chinese or the Filipino Chinese from coming here and saying, ‘Compared to what I have to pay in my country, this is cheap’."
The news is out-dated in Jun 2010. Buy property with care in 2012 due to massive supplies of PCs and ECs. Interest seems to be creeping up too. Not recommending buying for rental or sub-sales.
The news is out-dated in Jun 2010. Buy property with care in 2012 due to massive supplies of PCs and ECs. Interest seems to be creeping up too. Not recommending buying for rental or sub-sales.
June 2010 QE1, QE2. Since then 8 Dec 2011 ECB printing money 468 Billion loan to 500 banks, this Wed Bernanke going to print money again in a different way, low interest for the next 3 years. Put money in the bank less than 1 %, inflation more than 2 % sure Huat ah. The news may be out-dated but the old man can see far, his son after G20 meeting in France came back with ABSD.
The out-dated news is just a reminder to those who think Land price and building cost have went up.
June 2010 QE1, QE2. Since then 8 Dec 2011 ECB printing money 468 Billion loan to 500 banks, this Wed Bernanke going to print money again in a different way, low interest for the next 3 years. Put money in the bank less than 1 %, inflation more than 2 % sure Huat ah. The news may be out-dated but the old man can see far.
Economy is very volatile now. 2010 and 2012 are very different periods to me.
Whether it is bubble or not, you can decide from the comments by other seasoned forumers on rental demand and sub-sales/re-sales activities, and developers' appetite for land.
I believe we are in an early stage of bubble from 2H 2011, but the government is taking care not to prick it or inflate it until it bursts. Hence property investment carries a much bigger risk compared to 2010.
In short, most people cannot escape from this inflation trap. Due to the globally linked monetary system, we are just forced to work harder to help other countries pay off their debts.
There is no bubble yet in the Singapore property market, said Minister Mentor Lee Kuan Yew.
http://www.propertyguru.com.sg/property-management-news/2010/6/27950/no-property-bubble-yet-says-mm
The sharp price increases that have been experienced were "part of the total liquidity in the whole world system", said Mr. Lee, adding that foreigners still see properties as affordable and interest rates are still low.
"Even if we cap our excess, people in Hong Kong, Indonesia, will say, compared to what I have to pay, Singapore is cheap, let’s buy it," he said. "And apart from landed properties, they can buy into any condos."
Mr. Lee said the Singapore government is convinced that there is an underlying demand for residential property. "So it’s probably not a bubble yet."
He stressed that the Singapore government has taken measures to address concerns regarding the market overheating such as releasing more land to property developers and putting in place more stringent policies for homebuyers when borrowing from banks to acquire a property.
"More land is being released, to dampen the enthusiasm of everybody rushing for the latest release, and we’ve told the banks to be more prudent and have a higher downpayment," said Mr. Lee.
"These are the precautions we can take, but it does not stop the Indonesians or the Thais or the Malaysian Chinese or the Filipino Chinese from coming here and saying, ‘Compared to what I have to pay in my country, this is cheap’."
if you keep loaning out at 1% to FTs.. comfirmed bubble is building liao.. imagine banks here loaning out 116 billion of residential loans..
if you keep loaning out at 1% to FTs.. comfirmed bubble is building liao.. imagine banks here loaning out 116 billion of residential loans..
That is why 10% Additional Buyer's Stamp Duty, we want them to loan SGD at the same time tax them 10%.
Do you want loan money and then tax 10%?
Economy is very volatile now. 2010 and 2012 are very different periods to me.
Whether it is bubble or not, you can decide from the comments by other seasoned forumers on rental demand and sub-sales/re-sales activities, and developers' appetite for land.
I believe we are in an early stage of bubble from 2H 2011, but the government is taking care not to prick it or inflate it until it bursts. Hence property investment carries a much bigger risk compared to 2010.
In short, most people cannot escape from this inflation trap. Due to the globally linked monetary system, we are just forced to work harder to help other countries pay off their debts.
Developer appetite for land depend on the demand, bubble or no bubble they will have the appetite if there is demand.
Government is taking care they have a constant stream of income from the property market whether bubble or no bubble.
We don't need to work harder, we need work smarter and make our money work harder.
That is why 10% Additional Buyer's Stamp Duty, we want them to loan SGD at the same time tax them 10%.
Do you want loan money and then tax 10%?
i also dunno how many ppl actually know about the risk when loaning money for properties.. asked around and alot of ppl never heard of margin call.. thought that 1% to 5% is only abit and not many times more.. :scared-4:
i also dunno how many ppl actually know about the risk when loaning money for properties.. asked around and alot of ppl never heard of margin call.. thought that 1% to 5% is only abit and not many times more.. :scared-4:
Bank interest depends on a lot of factors.
May be someone can share the factors that affect the interest rate?
http://www.investopedia.com/articles/06/interestaffectsmarket.asp#axzz1kINcxTlU
The interest rate that applies to investors is the U.S. Federal Reserve's federal funds rate. This is the cost that banks are charged for borrowing money from Federal Reserve banks. Why is this number so important? It is the way the Federal Reserve (the "Fed") attempts to control inflation. Inflation is caused by too much money chasing too few goods (or too much demand for too little supply), which causes prices to increase. By influencing the amount of money available for purchasing goods, the Fed can control inflation. Other countries' central banks do the same thing for the same reason.
Read more: http://www.investopedia.com/articles/06/interestaffectsmarket.asp#ixzz1kIOSjE00
Bank interest depends on a lot of factors.
May be someone can share the factors that affect the interest rate?
no lah bro.. interest rates everyone knows but a number of ppl do not know how to calculate and over commit..
not everyone so savvy like us dunno can go online and ask around for opinions.. some ppl see their savings eaten up by inflation and used up the money to hoot properties..
interest rates can even be increase by banks themselves without mas approval.. this is because mas is only involved in currency exchange and not interest rates.. that is why we keep on hearing strenghten SGD to fight inflation..
US even with zero interest rates also loan out housing loans at 3-8-4.5% :2cents:
http://www.mas.gov.sg/resource/eco_research/lectures_seminars/EDALevelESS.pdf
Page 7 item fourth..
http://www.investopedia.com/articles/03/111203.asp#axzz1kINcxTlU
Forces Behind Interest Rates
1.Supply and Demand
2.Inflation
3.Government
http://www.mas.gov.sg/resource/eco_research/lectures_seminars/EDALevelESS.pdf
Page 7 item fourth..
the choice of the exchange rate as the intermediate target of monetary policy implies that the MAS gives up control over domestic interest rates (and money supply). In the context of free movement of capital, interest rates in Singapore are largely determined by foreign interest rates and investor expectations of the future movements in Singapore dollar.
1. SGD exchange rate up or down to USD?
2. Interest rates determine by foreign interest rates, Bernanke reduce interest rate will Singapore interest rate go up or down?
3. What do the investor expectation of SGD, up or down?
Interest rate going up ?
When the economy is growing -- companies are profitable, unemployment is low, and consumers are spending money -- short-term rates are raised to keep the economy from building too fast and risking inflation. Inflation is when too much money chases too few goods and services, driving prices upward. Raising interest rates slows the economy.
http://www.bankrate.com/finance/cd/how-interest-rates-are-determined.aspx
How to increase Bank interest rate. Will US raise interest rates to head off inflation in the next 3 year and Asia repeat history again.
1997 Asian financial crisis
As the U.S. economy recovered from a recession in the early 1990s, the U.S. Federal Reserve Bank under Alan Greenspan began to raise U.S. interest rates to head off inflation. This made the U.S. a more attractive investment destination relative to Southeast Asia, which had been attracting hot money flows through high short-term interest rates, and raised the value of the U.S. dollar.
http://en.wikipedia.org/wiki/1997_Asian_financial_crisis
I thought interest rate would increase significantly this year, about 2 years ago. It is increasing but too slowly. This stokes inflation, which creates (1) creates hardship for lower income groups, (2) turns middle-income savers into speculators, and (3) benefits property developers*, banks and exporters.
In summary, MAS policy of not managing the interest rates directly is screwing common folks, while the big companies' bosses are partying. Now group (1) is suffering badly. It will be interesting in 2016 election if group (2) suffers due to retrenchments and property price correction because this is a very vocal group.
* It seems that until very recently in CM5, this member in group (3) was not consulted and voiced out its unhappiness.
Actually sibor is not increasing.... It's the spread that the banks charges that are increasing.... Anywaynnow they banks seem to have moved from offering SOR to board rates
my guess is SOR rather than SIBOR linked loan? Can't remember exactly the details. Been a while since taken loan, can't remember the variable rate is based on SOR/SIBOR :beats-me-man: Letter from bank didn't mention any specific, only state rate is revised upwards :scared-3:
Will look around and refinance. BTW, which bank offer best rate these days?
Sorry typo... Ocbc not bad
Fed not to raise US interest rates until late 2014
Continue reading the main story (http://www.bbc.co.uk/news/business-16733461#story_continues_1) The Federal Reserve has said it does not now expect to raise interest rates in the US until late 2014.
The surprise move sent the dollar sharply lower in markets, and caused US government borrowing costs to fall.
In its regular policy statement (http://www.federalreserve.gov/newsevents/press/monetary/20120125a.htm), the central bank said it saw "significant downside risks" to the economy, and said inflation had fallen back to a level in line with its mandate.
Rates remain in a target range of zero to 0.25%.
However, some members of the Fed's policy-setting committee, which has just finished a regular two-day meeting, think rates should rise more quickly.
Along with its usual economic forecasts, the Fed decided to publish the interest rate forecasts of individual committee members (http://www.federalreserve.gov/newsevents/press/monetary/fomcprojtabl20120125.pdf) for the first time.
It revealed that three of the committee's 17 members think rates should rise by the end of this year already, and six members foresee this by the end of 2013.
By the end of 2014, six members expect rates to still be at their historic low, while one member expects them to have risen to 2.75%.
Inflation target The Fed did not announce any new quantitative easing measures - pumping newly created money into the financial system by buying up US government debt and other assets.
However, it repeated a concern expressed in previous statements that the US economy faced "significant downside risks" and that it "expects to maintain a highly accommodative stance for monetary policy".
The Fed cut its growth forecast for the current year slightly, to a range of 2.2-2.7%, from 2.5-2.9% previously.
However, it forecast unemployment would fall to 8.2% - an improvement on its previous 8.5% forecast.
Unlike in previous statements, the Fed also no longer said it was monitoring inflation closely, reinforcing the impression that price rises were no longer a major concern.
The Fed also formalised its inflation target at 2% (http://www.federalreserve.gov/newsevents/press/monetary/20120125c.htm) - similar to the Bank of England's. Previously the central bank did not set itself a formal target, but pointed to a range of 1.7% to 2% as an informal target.
Core inflation - a measure of long-term inflation trends - has fallen back towards 2% in recent months. Consumer prices inflation hit a high of 3.9% last September.
However, the Fed's new inflation target is based on the broader personal consumption expenditure (PCE) index.
Dollar falls The interest rate announcement caught markets by surprise. They had been expecting rates to start rising from mid-2014, instead of the late 2014 forecast by the Fed.
The dollar fell, as the lower expected interest rates made the currency a slightly less attractive place to keep cash.
The euro rose one-and a-quarter cents to $1.31 following the release of the statement, which came at the end of a regular two-day meeting of the Fed's policy-setting committee. The pound rose just under a cent to $1.564.
Meanwhile, the US government's implied cost of borrowing in markets for 10 years fell froma 2.06% to 1.94%, as traders priced in the lower medium-term interest rate expectations.
Shares also rallied on the news, with the Dow Jones Industrial Average, which had been down for the day, rallying about 0.8% following the announcement.
The Fed first began stating its expectations about how long it expected interest rates to remain at their historic low back in August last year, as a way of lowering longer-term interest rates and thereby stimulating the economy.
Until now, it had been promising to hold rates down until mid-2013.
Perhaps tharman already know it
Looks like property price may not correct due to cm5
It is developers' play now.
staying interest rate low - gd?
japan went thru zero interest rate. worked well?
staying interest rate low - gd?
japan went thru zero interest rate. worked well?
Do they have a choice?
MAS policy of using exchange rate to control inflation instead of interest rate, was laid down by Dr Goh Keng Swee, who has a PhD in Economics from London School of Economics. The Policy has enabled Singapore's economy to go from 3rd World to 1st World, time & tested, over the past >40 years! So you are saying that he is wrong and you are right, and you are a smarter and better economic genius than him? :doh:
I thought interest rate would increase significantly this year, about 2 years ago. It is increasing but too slowly. This stokes inflation, which creates (1) creates hardship for lower income groups, (2) turns middle-income savers into speculators, and (3) benefits property developers*, banks and exporters.
In summary, MAS policy of not managing the interest rates directly is screwing common folks, while the big companies' bosses are partying. Now group (1) is suffering badly. It will be interesting in 2016 election if group (2) suffers due to retrenchments and property price correction because this is a very vocal group.
* It seems that until very recently in CM5, this member in group (3) was not consulted and voiced out its unhappiness.
tis policy made minority very wealthy?
instd of bite bullet, every1 in US/europe is going agst Darwin's theory "Survival of d Fittest"
use more resources 2 save d badly injured. great efficiency?
if it/crisis happens in east instd of west...i think west will tell - Use Darwin theory
You have proof to justify your statement? :p
Don't any how blemish the name of Goh Keng Swee ok? :doh:
tis policy made minority very wealthy?
instd of bite bullet, every1 in US/europe is going agst Darwin's theory "Survival of d Fittest"
use more resources 2 save d badly injured. great efficiency?
if it/crisis happens in east instd of west...i think west will tell - Use Darwin theory
MAS policy of using exchange rate to control inflation instead of interest rate, was laid down by Dr Goh Keng Swee, who has a PhD in Economics from London School of Economics. The Policy has enabled Singapore's economy to go from 3rd World to 1st World, time & tested, over the past >40 years! So you are saying that he is wrong and you are right, and you are a smarter and better economic genius than him? :doh:
Policies have to be updated from time to time. What worked 30-40 years ago may not be as effective now. Very obviously the failure to control interest rate is fueling property bubble for the past few years.
You are attributing our economic success to the control of exchange rate. This is belittling the hardwork of our parents and grandparents.
It doesn't take a PhD to see what is causing inflation and bubble.
Goh Keng Swee just passed away in 2010 and until he die he still very alert. Didn't hear that he think his policy need to change?
Ok Ok, you smarter than him. Please take over the MAS Chairman position if you so good as they are still following his policy. :p
Policies have to be updated from time to time. What worked 30-40 years ago may not be as effective now. Very obviously the failure to control interest rate is fueling property bubble for the past few years.
You are attributing our economic success to the control of exchange rate. This is belittling the hardwork of our parents and grandparents.
It doesn't take a PhD to see what is causing inflation and bubble.
Policies have to be updated from time to time. What worked 30-40 years ago may not be as effective now. Very obviously the failure to control interest rate is fueling property bubble for the past few years.
You are attributing our economic success to the control of exchange rate. This is belittling the hardwork of our parents and grandparents.
It doesn't take a PhD to see what is causing inflation and bubble.
Sometimes I am impressed with things people can say to justify their wants. If you want interest rates to go up and property prices to come down to the level you can buy, then say that la!
No point going one big round and slam those who have contributed to our country like that.
Anyway, interest rates WILL BE low till 2014. I think everyone should take that as a given (for investment purposes) AND see how we can profit from this low interest rate environment. Instead of arguing how the marcro econimics should be managed (unless u got the power to make it happen la!).
So at the end of the day, the main theme of the discussion is : Got Money, we all make!!
DKSG
Stay Calm and Cool
phantom_opera
26-01-12, 12:50
monetary policy very hard to change one ... cannot suka suka one system tomorrow another system ... we use exchange rate to control inflation has worked for many years
what you should be asking is why your CPF OA is 2.5% yet inflation is 5.5%
Very obviously the failure to control interest rate is fueling property bubble for the past few years.
Really ? Or is it just your opinion ?
The high price in OCR is directly caused by high HDB resale prices. And high HDB price is directly caused by severe under supply in the past, plus significant "oversupply" of immigrants.
monetary policy very hard to change one ... cannot suka suka one system tomorrow another system ... we use exchange rate to control inflation has worked for many years
what you should be asking is why your CPF OA is 2.5% yet inflation is 5.5%
Dear Mr Phantom Of The Opera (I watched your show in London recently!)
We gotta be thankful that it is still 2.5% OA and 4% SA.
Remember they are supposed to "liberalised" the rate and let market decide based on some government bonds thing ?
These few years they have intervened and continue to pay this rate. If they start to "liberalise" us, I think we only get like 1.x% ... haha!
DKSG
Stay Calm and Cool
phantom_opera
26-01-12, 13:17
Dear Mr Phantom Of The Opera (I watched your show in London recently!)
We gotta be thankful that it is still 2.5% OA and 4% SA.
Remember they are supposed to "liberalised" the rate and let market decide based on some government bonds thing ?
These few years they have intervened and continue to pay this rate. If they start to "liberalise" us, I think we only get like 1.x% ... haha!
DKSG
Stay Calm and Cool
In that case, after "liberalize" us, they should allow using CPF SA/RA to buy properties, huat ah !!! As of today, 10y SGS bond is 1.67%, +1% comes up to 2.67% .... how is that rate for your CPF SA/RA when inflation is 5.5% ??
hello any1 home..u c d ? end of sentence
question 2 all. otherwise why we debate on whether rate/currency 2 control inflation?
bottom line things r more ex
You have proof to justify your statement? :p
Don't any how blemish the name of Goh Keng Swee ok? :doh:
hello any1 home..u c d ? end of sentence
question 2 all. otherwise why we debate on whether rate/currency 2 control inflation?
bottom line things r more ex
The Hard Truth is interest rates will remain low in the next 2 years and that is conducive for property investment. Doesnt mean price will spike tremendously, it only means that if u own a property, the cost of holding will be low. U can afford to lower rental and still make money every month.
Unknown to many, landlords now are earning big bucks. Rental less interest is very profitable now!
DKSG
Say Calm and Cool
Not only enjoying rental income but someone is paying for the mortgage of your home.
The Hard Truth is interest rates will remain low in the next 2 years and that is conducive for property investment. Doesnt mean price will spike tremendously, it only means that if u own a property, the cost of holding will be low. U can afford to lower rental and still make money every month.
Unknown to many, landlords now are earning big bucks. Rental less interest is very profitable now!
DKSG
Say Calm and Cool
Goh Keng Swee just passed away in 2010 and until he die he still very alert. Didn't hear that he think his policy need to change?
Ok Ok, you smarter than him. Please take over the MAS Chairman position if you so good as they are still following his policy. :p
Thanks for your 'compliment'. Perhaps you might wish to discuss/ rationalise your stand instead of quoting GKS.
Really ? Or is it just your opinion ?
The high price in OCR is directly caused by high HDB resale prices. And high HDB price is directly caused by severe under supply in the past, plus significant "oversupply" of immigrants.
You are right from 2005-2009 due to undersupply of public housing. I'm referring to the more recent 2009-2011 period of price increase for private housing - this is my view and you can agree/disagree. I'm here for exchanging of views.
Indirectly the higher price of private housing has a contributory factor in raising the prices/COVs of public housing when people downgrade. The latter is commented by KBW recently.
monetary policy very hard to change one ... cannot suka suka one system tomorrow another system ... we use exchange rate to control inflation has worked for many years
what you should be asking is why your CPF OA is 2.5% yet inflation is 5.5%
I agree it is hard to change the policy, as there are many unknown effects. MAS is still using exchange rate to control inflation, but it seems to have partially lost control in 2011. It even lost money due to stronger SGD in Q1 2011. A lot blamed had been levied at higher COE premium but most of us don't really own cars, or if we do, we did not buy them at current prices. In reality, IN MY VIEW the core inflation figure is much higher as the same price buys you a smaller portion or lower quality substitute.
http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1142148/1/.html
http://www.mas.gov.sg/news_room/press_releases/2011/Comment_by_MAS_Spokesperson_on_Inflation.html
http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1142147/1/.html
No more further comment from me in this thread in case it gets over-heated.
I agree it is hard to change the policy, as there are many unknown effects. MAS is still using exchange rate to control inflation, but it seems to have partially lost control in 2011. It even lost money due to stronger SGD in Q1 2011. A lot blamed had been levied at higher COE premium but most of us don't really own cars, or if we do, we did not buy them at current prices. In reality, IN MY VIEW the core inflation figure is much higher as the same price buys you a smaller portion or lower quality substitute.
http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1142148/1/.html
http://www.mas.gov.sg/news_room/press_releases/2011/Comment_by_MAS_Spokesperson_on_Inflation.html
http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1142147/1/.html
No more further comment from me in this thread in case it gets over-heated.
Still remember my statistic lecturer once explain, "statistic don't lie, it the once who use it lie."
You read what people what you to know, to know the truth you need to read behind the words.
http://www.ires.nus.edu.sg/workingpapers/IRES2011-005.pdf
I agree it is hard to change the policy, as there are many unknown effects. MAS is still using exchange rate to control inflation, but it seems to have partially lost control in 2011. It even lost money due to stronger SGD in Q1 2011. A lot blamed had been levied at higher COE premium but most of us don't really own cars, or if we do, we did not buy them at current prices. In reality, IN MY VIEW the core inflation figure is much higher as the same price buys you a smaller portion or lower quality substitute.
http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1142148/1/.html
http://www.mas.gov.sg/news_room/press_releases/2011/Comment_by_MAS_Spokesperson_on_Inflation.html
http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1142147/1/.html
No more further comment from me in this thread in case it gets over-heated.
read more here if you are keen..
MAS’ attempt at currency control is mission impossible: DBS
DBS says the central bank’s US$17bn intervention in currency markets in October is part of its attempt to do the impossible— to control the currency and interest rates at the same time that capital is free to come and go.
In a statement, the bank said Singapore is “butting heads with the impossible trinity” Nobel Prize-winning economist Robert Mundell theorised — that currency and interest rates cannot be controlled at the same time as capital.
For DBS, it seems as if Singapore, wants all three.
“As capital flowed into the country in October more than at any other time in history (save for Mar08), 3m Sibor remained almost rock-steady, dropping by a nearly nonexistent 6bps to 0.44%. If that’s not having your cake and eating it too, nothing is,” the bank said.
Massive capital inflows forced the central bank to intervene in foreign exchange markets to the tune of US$17bn in October, equivalent to 90% of October GDP. The amount was split about equally into $8.2bn of spot market intervention and $8.6bn of forward market intervention .
The bank said that inflows are likely to continue as a consequence of the currency regime in place that is forcing Singapore’s interest rates skyward.
According to DBS, the management of the Singapore dollar against a basket of 20 or more trading partner currencies should mean that as the currency appreciates by 3%, the interest rates should now be 3% below the basket interest rate, which is not the case.
“Sing rates, [however], are not negative. The point is that’s where Sibor needs to be, given the 3% currency appreciation, if capital flows are to stabilize,” the bank said.
DBS said that for the inflows to stop and for the rate to bounce back positively, Singapore must do a combination-- but not all-- of the following:
lower interest rates
a large currency overshoot
implement wider currency bands
undertake an ever greater intervention in the forward market
put controls on inflows or
[launch an] event which “frightens investors away.”DBS said that as Singapore is likely to fail defying the “impossible trinity,” it should just settle for control of any two variables-- not all.
" Something, it seems, has to give," the bank said.
http://www.valuebuddies.com/thread-508.html
https://www.dbsvresearch.com/research/DBS/research.nsf/(vwAllDocs)/89D3CE24024F549A482577F1001ABC1A/%24FILE/Singapore%20attempts%20the%20impossible%20101206.pdf
You are right from 2005-2009 due to undersupply of public housing. I'm referring to the more recent 2009-2011 period of price increase for private housing
For 2009 to 2011, the direct cause is US QEs. this causes asset inflation worldwide, not just SG. When you have massive liquidity in the system, every asset class becomes a bubble. Oil, gold, property, commodities. You cannot fight this liquidity while being a free open market. Only capital control can shield us from this liquidity, but you should know better to agree that this is not doable.
The correct way to counter this, is to raise LTV. Force people to put up more equity. The side effect is, only the rich will profit from this policy not the upgraders.
In addition, normally massive printing of money should result in high interest rates. However US is a special case. With all this printing, US 10 y note is 2%. we imported FED rate too.
Low interest rate does not always result in pty bubbles. Japan had 20yrs of low rates already. But Japanese pty prices had been on a downhill for as long.
High property prices in SG today is a result of multiple factors. Undersupply in the past few years plays a far bigger factor. I have the view that private "down graders" are not the main reason of high HDB prices. The number of such down graders should be very small, not enough to cause a whole segment to shift so much. The root reason of OCR bubble is still HDB prices, not the othway round. The idea that, to bring down HDB COVs you must bring down private prices, is simply a fallacy. Gov probably knew it, but it's stuck in its policy stigma because th gov himself encouraged and even helped to push up HDB prices. It cannot do a U turn and tell Sporeans now HDB price should stay low.
For 2009 to 2011, the direct cause is US QEs. this causes asset inflation worldwide, not just SG. When you have massive liquidity in the system, every asset class becomes a bubble. Oil, gold, property, commodities. You cannot fight this liquidity while being a free open market. Only capital control can shield us from this liquidity, but you should know better to agree that this is not doable.
The correct way to counter this, is to raise LTV. Force people to put up more equity. The side effect is, only the rich will profit from this policy not the upgraders.
In addition, normally massive printing of money should result in high interest rates. However US is a special case. With all this printing, US 10 y note is 2%. we imported FED rate too.
Low interest rate does not always result in pty bubbles. Japan had 20yrs of low rates already. But Japanese pty prices had been on a downhill for as long.
High property prices in SG today is a result of multiple factors. Undersupply in the past few years plays a far bigger factor. I have the view that private "down graders" are not the main reason of high HDB prices. The number of such down graders should be very small, not enough to cause a whole segment to shift so much. The root reason of OCR bubble is still HDB prices, not the othway round. The idea that, to bring down HDB COVs you must bring down private prices, is simply a fallacy. Gov probably knew it, but it's stuck in its policy stigma because th gov himself encouraged and even helped to push up HDB prices. It cannot do a U turn and tell Sporeans now HDB price should stay low.
I must say that this is a very insightful post. :cheers1:
I fully agree with GKS's policies as I am not expert and has no better idea! :p
People who doesn't agree with GKS probably are better economists and can give robust white-paper on why the change is necessary to convince MAS to change? :D
Thanks for your 'compliment'. Perhaps you might wish to discuss/ rationalise your stand instead of quoting GKS.
I fully agree with GKS's policies as I am not expert and has no better idea! :p
People who doesn't agree with GKS probably are better economists and can give robust white-paper on why the change is necessary to convince MAS to change? :D
The Hard Truth is : Low interest rates are here to stay for a while. It just renewed its tenancy agreement for 2 years!
DKSG
Stay Calm and Cool
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