Singapore is going to suffer an economic meltdown!

I saw at least half a dozen people posting THE article in Forbes on their Facebook walls and one reader was concerned enough to send the HTML link for the article to me. 

Which article am I talking about?





This: 
Why Singapore's Economy Is Heading For An Iceland-Style Meltdown.

Sensational headlines like this are bound to capture the attention and, perhaps, also the imagination of people.

According to the article, Singapore has a wealth bubble, a population bubble, a credit bubble, a property bubble, a construction bubble and our sovereign wealth funds are at risk. 

Put all these together and we have an epic horror movie that will put "Nightmare on Elm Street" to shame!





AK decided to try his hands at a sensational headline. 

Let's see. What about this?

AKAN DATANG:
"The Killer Bubbles of Singapore!"

Maybe, this will get the attention of the Monetary Authority of Singapore (MAS) too! Too? 

Yup, The MAS has issued a response to the article in Forbes.

This: Singapore is not facing a credit bubble.

First, the property market is now stabilising and new housing loans have also been declining.

Second, household balance sheets are on the whole strong and property asset values are significantly higher than the debts incurred.

Lastly, the MAS said Singapore's financial system is robust.






Read both articles and form you own conclusion. Is Singapore going to melt like Ice, I mean, Iceland? 

Or should the Forbes article be moved from the non-fiction to the fiction section of the bookshop?

Although I am a worrier by nature, I think this is something I will have to pass on worrying. 

The issues are way too big and what good is it going to do if I worry about them?





What is more important for us to do is to work with what we have and to ensure we are prepared. 

Up or down, we want to be OK and we should be OK if we do the right things.

Related posts:
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2. The secret to avoiding financial ruin.
3. Don't think and grow rich.
4. Be cautious even as we accept higher risk.
5. Young working Singaporeans, you are OK!
6. Millionaires emerge from bear markets richer.

Car dealers unhappy with Land Transport Authority.

I read a commentary in The Business Times yesterday and found it amusing for various reasons.

It was a piece on how car dealers are unhappy with the Land Transport Authority (LTA) for what have been perceived as piecemeal announcements.

Honestly, I think they are more unhappy with the fact that the business environment has become very difficult for them, forcing many smaller dealerships to close in recent times.

For those of us who drive, we know that road traffic conditions have worsened remarkably and this is partially due to a motor vehicle population that has burgeoned in recent years.

More people also "seemed" to be "prosperous" as their demand for cars pushed Certificate of Entitlement (COE) prices through the roof just a few months ago.

The operative word here is "seemed" and not "prosperous". Why?

When "cooling measures" were introduced last year, demand fell dramatically. It shows quite obviously that many people were only able to afford cars here in Singapore when they had access to much bigger loans and 100% LTV (loan to value) was also available.

One complaint a car dealer had was about the categorising of cars not just by engine capacity but also by engine output. This caused brands like BMW to be completely pushed out of Category A which is where mass market cars compete for COEs.

Is this a bad thing?

Well, bad for the rich or those who want to appear rich. For most of us average folks, I think it is a good thing. Actually, for the rich, it might not even have mattered.

Imagine a middle income family buying a 1.5 litre Japanese make mass market car competing for a COE with a millionaire who was buying an entry level BMW for his son's 18th birthday. Something feels wrong here. What is it? I wonder.

So, the categorisation criteria are better now. I am not saying that the system is now perfect, of course, but I feel that it is better. More equitable, won't you agree?

Related posts:
1. First time car buyer? Get a Mercedes Benz.
2. Cooling measures for cars: Buying pre-owned.
3. Cooling measures for cars spurned.
4. Cooling measures for cars.
5. If we are not rich, don't act rich.