LOL.Online battle between Tan Chuan-Jin and Bloggers begun!

[Happily1986]

Thats the problem.

Why should we be following the Fed rate?

Our economy and demands are totally different.

We MUST raise our rates to control inflation soon anc bring market to equilibrium

the problem is MAS is gradually adopting a conservative posture that advocates not rocking the boat at any cost.

 

i feel that central banks should take a more proactive stand and play a greater role in regulating capital creation. How many busts must we go through before someone realise that the boom-bust turnover cycle is becoming short i.e. becoming more frequent?

 

George Cooper's Origin of Financial Crises is an excellent writeup on this. Easy on the layman as well.

[Joseph22]

The basket of goods consumed commonly by households over time, are in fact adjusted and the weightage changed based on the information

collected from the annual survey of expenditures.

 

Why do you expect? Of course, the basket will change.

 

 

In other words, items that were formerly luxury items 10 years ago may be one day be included in the basket, if 10 years later,

such an item is commonly consumed by most of the households.

 

Such adjustements to the basket of goods typically take place on average every 10 years.

 

 

Isnt that the result of improved standard of living? 20 years ago if u tell anyone that in a certain country their citizen have many tv in their home and everyone carry a handphone, u will think its heaven. Why had it change now? Higher expectation like everyone should own a house in a mature estate or can own a car?

[Freestylers09]

actually development also not cheap ,i also used to think it's cheap

 

recently handle a 20million project, juz a very small building few story only.material somemore is cheaper than what use for HDB

 

given a 100+ HDB unit size, about 40-60million i guess

 

btw i checked with my builder,1 temple or church size also easily 10-15million build up cost which they did in past.

 

i used to think it's cheap until i did this project and find out more on costing wise..

[Raymondism]

yes, I think so. You must be an old uncle with curly permed hair. no wonder he laffing at you.

 

 

only three places hv curly hair but none on the head

[Heartlander]

Even if you don't choose high floor, the same ledtover unit would have cost even higher few months down the road. Give u an example, a BTO site i was eyeing few years back was cancelled due to poor take up rate. 3-4 years later, the same site and 4-rm unit costs double the price. I am comparing same location, same unit type (4-rm, premium), only the timing is different (not a decade).

 

HDB's mission is to build affordable housing, so why is it putting the cost at so high? And what us the defination of affordable? Meaning one takes 30 yr loan paying off using CPF and by the time he retires, his CPF is almost empty. So what if he sells the house? He still have to pay back CPF accured interest for the past 30-40 years.

 

This brings to a interesting situation. Supposedly a new flat was launched at 100k when similar unit in same estate was selling at like 400k. After 1.5 year, due to economic upturn, the resale price rises to 600k. So when HDB bring the remaining unsold units to market, what do you think is the logical selling price? Still at 100k? Do you think it will spark a mad run among the citizens to get the unsold flats.? Would it turn into some unhealthy national speculation game with instant gains? Personally, I think it is reasonable to peg the selling price of unsold unit at the price difference since first launch, but of course can only go higher. But that is only my opinion. And there is no right or wrong, just who is the one to make the call.

If the gov wants to term it affordable, then use 15 years loan as a guage so that home owners can have the other 15 years to build up their CPF nest. And how many can actually pay off in 15 years without cash topups in today's pricing?

 

If you want to fix the new flat price to allow people to buy using cpf without topup within 15 years, I really don't know how it can be done. Can you provide more details of what you mean? Do you know that cpf contribution max out at about 4k gross pay, and that is easily achieved nowadays? Do you mean just pay the standard minimum downpayment, and the rest using monthly cpf contribution? So you are selling only one size of HDB flats, since a 2-rm flat will be of different price from a 5-room flat and will not result in same monthly quantum? Or you are proposing the yardstick on the most expensive 5-room flat? In that case, are you asking for the HDB flats prices to plunge to about 300k max for any units in any estate? It will surely bring about many other problems as people will be asked for much higher COV as they vie for the choice units in the choice estates they want, then become LPPL.

 

If they like to keep saying HDB is always selling at a loss, then the gov might as well stop selling land altogether, since today's selling price is always at a loss when the land prices appreciate in future. Might as well hold on to the land infinite and don't sell/build, then no more losses.

 

But too bad provding a roof over the head is the responsibility of the HDB. It isdirty job, but somebody still got to do it right? And it seems there are no lacking of demand right? Are the buyers complaining? Think it is more of bystanders compraining.

Edited April 28, 2012 by Heartlander

[Sabian]

Thats textbook, dude.

Everyone knows why Singapore chooses to use exchange rates to control inflation.

But thats where i am saying that such a policy needs to be complimented with rates management.

 

MAS already controls the exchange rate and money supply. Is it also possible to control interest rate as well?

[Wind30]

MAS already controls the exchange rate and money supply. Is it also possible to control interest rate as well?

 

I think the MAS controls exchange rate and there is free flow of money in Singapore. If government wants to increase interest rate, I think the SGD needs to go up.

 

The thing I don't know is how much will the SGD goes up if interest rates rises lets say 1%?

[Throttle2]

There is another technical or so called textbook reason why central banks

 

do not use both interest and exchange rates at the same time.

 

 

 

It is due to the principle of "uncovered interest rate parity".

 

I would not attempt to explain it here as I barely understood the whole concept.

 

 

 

There is no doubt certain similar impact or overlaps when 2 "tools" are used.

But the depth to how each is used will tackle different components of one single overall result

 

My point is that we should not just stick to what we learn from textbooks.

It doesnt take a professor to tell us that the situation we face in todays world is always changing and many economic theories hv already been proven irrelevant.

Much more so in a country with warped population mix like Singapore

 

Enjoy the weekend folks

[Sabian]

I think the MAS controls exchange rate and there is free flow of money in Singapore. If government wants to increase interest rate, I think the SGD needs to go up.

 

The thing I don't know is how much will the SGD goes up if interest rates rises lets say 1%?

MAS does control money supply. Controlling money supply is not really about free flow of money in SG. It's abt how much liquidity the central bank is adding to/ withdrawing from the banking system. (Teh Hooi Ling wrote a good piece on it. Have a read. http://www.asiaone.com/print/Business/My%2...31-261348.html)

 

Controlling to me means the central bank is able to impose its will as to what the desired level shd be. ie: the exchange rate/ amount of liquidity in the system/ or the desired interest rate level. But it's not possible to target all 3 at the same time.

 

The last 6 years, I watch with amusement at the futile attempts of the VN govt as they attempted to grapple with all 3. You can see the result. Short of issuing an emperor edict, controlling all 3 will not be sustainable.

[Vooth]

Allow me to share my experience... I just booked a 5-room at CCK around 3 weeks ago. Flat cost me 351k for a mid-floor unit.

 

Since me and gf graduated not too long ago (and even while studying, she has been working with prudential for a good 2yrs), our combined income is slightly shy of 4k, we qualify for about 30-35k of additional grant. Therefore, the 10% downpayment has been taken care of.

 

The monthly installment for the flat over 30yrs will be around 1.2k, of which, around 70% will be paid from CPF. The rest is cash topup.

 

What i don't understand is why HDB don't sell flats at cost (or slightly above cost) rather than taking market rate and taking about 50k off the price? Is it purely to prevent buyers to make a handsome profit after the 5yr MOP is up?

 

Sell at cost? When Toa Payoh Blk 79 was first launched, average price for a 5 room flat was about $400k+. Recently I saw the price of one excess flat for sale by hdb at almost $700k! Cost of building the unit the same, priced at market rate reaped handsome gains for them! Sell at cost? You think they will do that?

[Vooth]

I am in the camp which favors increasing interest rates to curb inflation .

Using exchange rates to curb inflation is not effective enough and with globalisation and higher foreign population strength of the SGD, has in fact worked against us.

 

I sincerely hope beanchmark rates can go up 0.25 per quarter back to a healthy level of about 3.5%pa.

 

Incidentally, that might also affect coe prices, talk about killing two birds with a stone.

[Phluvcat]

We can debate and argue till the cow comes home. Different people have different agendas in their point of argument.

 

Whether they are pro ruling party, whether they are comfortable with the system, whether they are benefiting from the system. Look at it from this point of view and we know if changes for the better will happen or what needs to be done to better our country.

 

Take for instance a pile of sand in a container, many are already sitting nicely at the top of the pile, do you think they will let someone come shake the container and level out the sand particles? No way (and to be fair its not that fair either - and who is to blame for piling up the sand like that on the edge of stability). And most have been social engineered to think and work in a certain manner, look after themselves first. I think if things were to happen, it will be started by the new citizens or foreigners.

 

Singapore now is just like the Pirelli tyres with very narrow operating temperature. Out of this band even you got the car with best balance and aerodynamic, the performance is limited by the tyres. Only those who know how to use the tyres could take advantage, they need not be the fastest.

 

Some people like the spectacle provided by the tyres but I personally don't. I felt its a farce and being F1, which is about the pinnacle racing and technology,has become a tyre management show. Even going out of the racing line you will be punished.

 

This is exactly what is Singapore now where people's genuine potential are not realised or is with hold, and those who try something different mostly fall by the wayside.

 

Ten years ago still a land of abundance, now a land of scarcity and we have dug ourselves holes which seriously we do not know how to get out.

 

Unless we change the tyre supplier or compound, nah...at least F1 still can remedy the situation quite easily.

 

Just my worthless 2 cents.

Edited April 28, 2012 by Phluvcat

[Tigerwoods]

for my job, they just need to train a monkey will do [laugh]

Monkey also make mistakes. But that will be the next phase before using machine.

Because they only need to pay peanuts...

[Throttle2]

MAS does control money supply. Controlling money supply is not really about free flow of money in SG. It's abt how much liquidity the central bank is adding to/ withdrawing from the banking system. (Teh Hooi Ling wrote a good piece on it. Have a read. http://www.asiaone.com/print/Business/My%2...31-261348.html)

 

Controlling to me means the central bank is able to impose its will as to what the desired level shd be. ie: the exchange rate/ amount of liquidity in the system/ or the desired interest rate level. But it's not possible to target all 3 at the same time.

 

The last 6 years, I watch with amusement at the futile attempts of the VN govt as they attempted to grapple with all 3. You can see the result. Short of issuing an emperor edict, controlling all 3 will not be sustainable.

 

not disputing anything but it's always the degree to which we employ methods to handle the situation.

there are huge overlaps and connection as mentioned between all the tools.

 

I refrain from using other govts as an example becos Singapore is very unique and quite different from others.

 

anyway for all thats said whether it was understood , agreed or otherwise, i advocate raising rates gradually as a compliment or even replacement to the other policies as required.

 

imagine if govt say" we are committed to raise rates to manage inflationary pressures" , everyone will rethink their purchase decision more carefully...

 

[Sabian]

not disputing anything but it's always the degree to which we employ methods to handle the situation.

there are huge overlaps and connection as mentioned between all the tools.

 

I refrain from using other govts as an example becos Singapore is very unique and quite different from others.

 

anyway for all thats said whether it was understood , agreed or otherwise, i advocate raising rates gradually as a compliment or even replacement to the other policies as required.

 

imagine if govt say" we are committed to raise rates to manage inflationary pressures" , everyone will rethink their purchase decision more carefully...

Yep. I know where you are coming from and I agree fully that rates ought to be higher. A lot of misallocated capital in the last few years.

[Throttle2]

Incidentally, that might also affect coe prices, talk about killing two birds with a stone.

 

actually, it's not incidental, it's meant to!

 

muayhahahah

[Throttle2]

The basket of goods consumed commonly by households over time, are in fact adjusted and the weightage changed based on the information

collected from the annual survey of expenditures.

 

Why do you expect? Of course, the basket will change.

 

 

In other words, items that were formerly luxury items 10 years ago may be one day be included in the basket, if 10 years later,

such an item is commonly consumed by most of the households.

 

Such adjustements to the basket of goods typically take place on average every 10 years.

 

 

 

basket will change, yes BUT"........

 

i just cite simple examples to explain why i think that data is mostly academic.

last time people use soap, now liquid soap.

last time people eat cheapest brandless rice, now got brand got standard

last time army wear bata shoes, now wear what?

last time we take 3 tonner, now got chartered bus?

 

and as you said, some day, MAYBE, one day the items may be replaced to show something more in line to current real situation, and as they are, on average 8-10 yrs.

 

how much has happened in 8 to 10 mths? lets not talk about yrs.

i think once every 5 yrs is just about the max for something like that.

 

we are no longer in the 70s nor 80s nor 90s nor 00s.

times move a hell lot quicker today.

please ,enough of textbook stuff , dude.

Edited April 29, 2012 by Throttle2

[AhJason]

I wonder whether those who reaped lots of profits from re-selling their HDB complaining Imagine first owners who bought their HDB in the '80s @ less than 100k, now they resell it like 400k