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论老子

道,领导也。领导必需要不断呼唤,教导下属以及以身作则。下属的过和错皆因领导懒惰。

 
 
 

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Singapore economy 2014-2015: First of Triple Whammy  

2014-11-01 12:35:00|  分类: Economics (Unto |  标签: |举报 |字号 订阅

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Early August 2014, I paid Zhu a visit and he asked me: “Eric, Since Chinese New Year 2013, you have been telling me the property market is going to collapse. Last week, I checked the statistics published by URA. It shows the price trend going up and up. You are wrong.”

I asked, “Please show me the statistics.”

Zhu picked up his iPad and in two minutes he showed me the following webpage [1] from URA. He pointed out to me the price of a particular private property that he is interested. He said, “Eric, the price is clearly on the upward trend.”

I took a close look and I said, “Zhu, the reporting stopped at Dec 2013. Today is August. Where are the data for Jan 2014 to July 2014?”

Zhu was taken by a surprise. He said: “Let me check some other sites.” Five minutes later, he commented: “It is quite startling to me. Why URA stopped reporting after the last piece of data for Dec 2013.”

I explained: “This is called, “The veil of misinformation” [2]. By cutting off the last seven months data, you were cheated into believing the property price has not made a U-turn, down.”

Zhu recalled and explained: “I read the Business Times a few days ago. The property price is certainly still going up-trend. I believe in my own eyes. I belief in what I see, Eric.”

I asked: “May I asked, what kind of data you read. Is it a Moving Average trend indicator?”

Zhu promptly replied: “Yes, it is a Moving Average chart.”

I explained: “the Moving Average chart that monitors Singapore property price trend uses a 24-month moving average. Do you understand, what is moving average?”

Zhu replied: “Yes, the data point that is plotted now is the average of the data collected over the past 24 months.”

I commented: “When the property price start sliding down, its moving average data will still go up. This will happen for the next 11 months. On the average, the moving average of the 13 month data will begin to show a U-turn in the property price as it is being reported using a 24-month moving average.”

Zhu finally realized and softly commented: “This is misleading the public. No wonder, I was tricked into almost buying a second private property.”

A month later, September 9, 2014 CNN report [3]. Here is a short extract from this news report. “Home prices in Singapore will decline at a steeper pace, falling by 20 per cent between this year and 2016, as economic restructuring as well as property and loan curbs continue to weigh on the housing market, Bank of America Merrill Lynch (BAML) said in its research report released Tuesday (Sep 9).

Private home prices fell for a third straight quarter in the three months ended June as cooling measures such as the Additional Buyer’s Stamp Duty and loan restrictions such as the Total Debt Servicing Ratio (TDSR) framework curbed demand.”

The text in red clearly tells the Singapore Property price has been going downhill since the beginning of the 4th quarter 2013. Yet, during early August 2014, Zhu did not realize he was being nicely misled by a few tricks of information manipulation.”  

 Perhaps, you may question why I have a better understanding about how the Singapore government has been hideously misleading the people. Let me share with you an important blog article that most of you ignored or want to ignore as absolutely trivial reading. However, none of you ever imagine the implementation of the whole slew of property curb policies or cooling measures were triggered by this blog article,  

http://ericwoonct.blog.163.com/blog/static/181911362201276104246641/ published on Aug 6, 2012.

Here is a short gist of the theme of this blog article.

The blog author blasted Khaw Boon Wan of hideously pushing for 50-year mortgage loan for property purchase in Singapore. Khaw Boon Wan read this piece of article on the same day and the entire Singapore Cabinet were shell-shocked [4].

Singapore economy 2014-2015: First of Triple Whammy - 行天之道 - 论老子

 Figure 1: Singapore economy 2014 - 2015

Singapore Finance Minister Tharman Shanmugaratnam said in a Feb. 28, 2013 interview the property market is still “in a wrong part of the cycle.” By the way, the property market has been in the wrong part of the cycle ever since the launched of the Great HDB Upgrading program. Tharman nicely omitted the whole truth by presenting half the information with ONLY one intention – applying the veil of misinformation to mislead the public. Please read Appendix B for the slew of property cooling measures implemented immediately after the Parliamentary budget debate closed.

The author of the above blog article patiently waited for six solid months before the brainiest pool of these smart alecs came out with the above slew of property cooling measures. These cooling measures were followed on with nicely strung together pieces of information manipulation so much so that Zhu (and a whole bunches of Zhu’s) was misled right up to Aug 2014, a month before Sep 9, 2014 CNN news report.

 Let me pick up an interesting phrase from this report once again: Home prices in Singapore will decline at a steeper pace, falling by 20 per cent between this year and 2016.

Is the prediction made by this Bank of America Merrill Lynch research report going to be accurate?

In fact, I am seeing a much worse scenario.

Well, there is no better way for me to put my point across than the most beautifully written message of Laozi, some 2,500 years ago. Please read Appendix A, which is modern translation of Chapter 20 of his book, “DaoDejing”.  

In summary, economics is a complicated subject. Henceforth, the author chose to break it down into five separate articles, each focusing on a single topic. Please read these articles in the following sequence.

Singapore economy 2014-2015: First of Triple Whammy

Singapore economy 2014-2015: Second of Triple Whammy

Singapore economy 2014-2015: Third of Triple Whammy (Prelude)

Singapore economy 2014-2015: Third of Triple Whammy - Part 1

Singapore economy 2014-2015: Third of Triple Whammy - Part 2


[1] https://www.ura.gov.sg/realEstateIIWeb/transaction/search.action Today, the data is reported with due diligence.   

[2] http://ericwoonct.blog.163.com/blog/static/1819113622012520030290/

[3] http://www.channelnewsasia.com/news/business/singapore/home-prices-to-fall-20-by/1354620.html

[4] Aug 7, 2012, rumors spread like wild fire that Lee Kuan Yew is death. Aug 8, 2012, counter-rumors went on like this. “LKY was warming up his body in the hospital. He is fine.” On the third day evening, Aug 9, 2012, LKY appeared at the National stadium, celebrating Singapore 47th National Day. However, he was too weak and left the stadium early into the celebration.  

 

Appendix A: Chapter 20 of 《道德经》 by Laozi (老子).

Extracted from http://ericwoonct.blog.163.com/blog/static/181911362201251022523780/

There are two approaches to solving a problem. One, to pursue a comprehensive study or be proficient in or had mastered the body of knowledge in a subject, you will not be worried. Two, be submissive or blindly follow the instructions laid down by the others. After a deep thought, is there any significant difference between these two approaches? If you were to praise the former is good and discriminate the later as not good, how much can you make out of the differences between these two different approaches?

When the majority of the people fears something or accepts a conclusion, I do not think I can reject their fear or conclusion. Even though I am bent on ignoring their conclusions and want to abandon them totally, they still exist in their minds.

All of them seem to be living in tranquility, quite close to their nature, being comfortable, fully at ease and moderately joyful. Thinking they have arrived at a solution and much akin to a situation in welcoming the arrival of the spring festival, they slaughter cattle, sheep and pigs and celebrate in great joy. Meanwhile, I keep close to my heart that the problem is not solved yet. Despite of my dedication in trying to find out the root cause of the problem, there is no sign yet of the root cause as if the issue is right in the fetus stage and the complete picture of the problem has not developed into a full-blown infant yet.

Everyone says that he has sufficient confidence and ability or knowledge to grasp the root cause of the problem, in the interim I feel like there is something amiss. I sigh and right from the bottom of my heart, I do not want to deceive them that the problem is not solved yet. However, they continue to plead ignorance!

When the ordinary folks claim they have a very clear idea of the problem, I remained quiet though I am calm and in peace with myself.

When the ordinary folks start debating about their respective solutions in solving the problem, I keep quiet, partly confused and pretty unsettled.

I personally open up my chest as wide as the vast open sea to accommodate all their ideas and proposed solutions. However, they are like the swirling winds and ferociously wanted to implement their solutions immediately.

In the meantime, I look stupid and in my humble opinion, I am the only one who is totally different from all of them. I care more for first finding out the root cause of what had happened.

      

Appendix B: Singapore’s February Home Sales Decline to 14-Month Low on Curbs

By Pooja Thakur and Klaus Wille Mar 15, 2013 1:23 PM GMT+0800

http://www.bloomberg.com/news/2013-03-15/singapore-february-home-sales-drop-65-after-government-measures.html

Singapore home prices reached a record in the fourth quarter amid low interest rates, raising concerns of a housing bubble and prompting the government to widen a four-year campaign to curb speculation prices in Asia’s second-most expensive housing market. Knight Frank Pte cut its estimates for new home sales for 2013 by 20 percent and expects annual sales to range between 12,000 and 14,000 units.

“The government’s measures are starting to take effect,” said Vijay Natarajan, a Singapore-based analyst at UOB-Kay Hian Pte. “In addition, fewer units were offered because of the Chinese New Year. Over the coming months, I expect volumes to decline further.”

The city’s businesses were shut on Feb. 11 and Feb. 12 for the Chinese New Year holiday, limiting sales opportunities over an extended weekend.

Singapore economy 2014-2015: First of Triple Whammy - 行天之道 - 论老子

 Photographer: Sam Kang Li/Bloomberg

A jogger runs past people with dogs in Telok Kurau district in Singapore.

Home sales reached 22,699 units in 2012, according to calculation by Bloomberg News based on the government data, which dates back to 1996.

Q Bay Residences in the city’s northeast, developed by Far East Organization and Fraser & Neave Ltd.’s property unit, sold 74 homes last month, while buyers bought 84 units at Topiary in north-central Singapore, according to the data.

Property Measures

The latest measures included an increase in the stamp duty for homebuyers by between 5 percentage points and 7 percentage points, with permanent residents paying taxes when they buy their first home. Singaporeans will also have the levy starting with their second purchase.

Singapore also plans to raise taxes for luxury homeowners and investment properties. The higher tax will apply to the top 1 percent of homeowners who live in their own residences, or 12,000 properties, Singapore Finance Minister Tharman Shanmugaratnam said in his budget speech on Feb. 25. He said in a Feb. 28 interview the property market is still “in a wrong part of the cycle.”

Loan Limits

The government also tightened loan-to-value limits for buyers seeking a second mortgage, referring to the amount they are allowed to borrow relative to the value of their properties. The cash down payment will also rise to 25 percent from 10 percent starting from the second loan, it said.

Singapore has been attempting to rein in prices since 2009, when the government barred interest-only loans for some housing projects and stopped allowing developers to absorb interest payments for apartments still being built.

Earlier steps taken by Singapore to ease the property market included imposing additional taxes on foreigners and companies buying properties, and moving to curb the trend of so- called shoebox apartments. In October, it restricted home-loan maturities to 35 years and required tighter loan-to-value limits for loans exceeding 30 years.

To contact the reporter on this story: Pooja Thakur in Singapore at pthakur@bloomberg.net

 

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